Seven Billion Dollars from ANWR in President's Budget
The President today released figures for a national 2007 budget including an estimated 7 billion dollars in new revenues from federal lease sales in the 10-02 Area of ANWR. This is an increase of nearly 3 fold from the original $2.4 billion estimate in 2004-5 budget years by the Office of Management and Budget. It is thought that the jump reflects the dramatic increase in the price of oil over the last 3 years.
Once the President signs ANWR legislation into law, the Department of Interior would conduct leases sales of the 10-02 Area 21 months after signature. The tax royalties from the oil lease sales of the 10-02 Area would be split 50-50 with the State of Alaska and the Federal Government.
The President’s budget is based on an assumption of a 2008 lease year. The leases would be offered by the Department of Interior on subsurface acreage of the 10-02 Area of ANWR which was specifically set aside by Congress for oil and gas exploration. The President and a majority of the House and Senate are in favor of opening the 10-02 Area of ANWR to environmentally responsible oil and gas exploration, with a limited surface footprint of 2,000 acres.
The Department of Interior’s USGS estimated in 1998 that the 10-02 Area could hold between 5.7 and 16 billion barrels was yet furthered report last year to say modern exploration techniques would increase their previous estimates.
ANWR legislation was blocked on Dec 21 last year by obstructionists in the Senate striking ANWR language from the 2006 Defense Appropriations Bill. Senator Dominici, the Chair of the Senate Resources Committee, is keen to re-engage ANWR language in Congress this Spring.
ANWR revenues are hugely important to the US federal budget as they are one of the very few items that brings money into the government without coming from taxes of ordinary citizens. This estimate increase of $7 billion makes ANWR oil even more vital to the nation. This is an immediate cash injection into America that does not rely on building infrastructure or delays in construction of an oil field, estimated at roughly 6 years.
The Federal Government and State of Alaska would win, not just from these immediate royalties, but also from billions of dollars in yearly taxes on oil once it started to flow down the Trans-Alaska Pipeline. Almost no other sources in our nation can provide such a long term income for the government, nor at such great amounts with no cost to the public or government. It is thought the President’s new $7 billion lease sale estimates will greatly increase the chance of successful ANWR legislation this year.