Republicans Want to Pay for Tax Cuts by Drilling in the Arctic National Wildlife Refuge

The fact that Alaska Sen. Lisa Murkowski wants to open up the Arctic National Wildlife Refuge in her home state to oil and gas companies is news to no one in Congress.

Murkowski’s father fought to open the refuge to drilling for years when he served in Congress during the 1980s and 1990s. Alaska’s state budget depends on oil revenues and has suffered as fuel prices dropped in recent years. Geologists say billions of barrels could be found under the refuge if only oil companies were allowed to look.

The fact that environmentalists and most Democrats loathe the idea of setting up oil platforms and pipelines in a sanctuary for caribou and polar bears is also no surprise. The prospect of drilling in the “crown jewel” of the nation’s wildlife refuge system has been a hot debate item in Congress for decades, and it flared up again at an Energy and Natural Resources Committee hearing on Wednesday, as Chairwoman Murkowski and ranking member Sen. Maria Cantwell (D-Washington) faced off over Murkowski’s latest attempt to open the refuge to drilling.

“The fact that oil prices have fallen and a state is over-reliant on oil does not mean we should destroy a wildlife refuge today,” said Cantwell, who added that the purpose of the refuge is to protect wildlife, not oil interests.

Unfortunately for Cantwell and environmentalists, Democrats are in the minority and a fossil fuel fiend lives in the White House. Murkowski was able to pass a resolution to open the refuge for drilling through her committee on Wednesday by a 13-10 vote, largely along party lines. The resolution is attached to the tax overhaul bill, which the GOP is attempting to pass under the budget reconciliation process to avoid a Democratic filibuster.

Whether Republicans are able to pass Murkowski’s resolution along with their massive tax cut package — and whether oil companies are willing to get on board — may now determine the fate of the Arctic National Wildlife Refuge’s northern coastal plain, an area known as Section 1002.

Republicans have a slim majority in the Senate, and Murkowski already foiled the party’s last legislative push by voting against the attempted repeal of the Affordable Care Act. Senate Republicans now want to use the tax overhaul as a vehicle through which to repeal the ACA’s individual health insurance mandate, a move that would leave 13 million people uninsured and raise premiums for millions more, including Alaskans.

With Republican Sen. Ron Johnson already coming out against the current tax plan and asking for deep revisions, the GOP cannot afford any additional defectors. Incorporating permission for oil drilling in the Arctic National Wildlife Refuge into the tax bill could ensure that Murkowski remains a “yes” vote, regardless of what the bill looks like after the House and Senate agree on a final version.

The GOP’s recent budget resolution tasked Murkowski’s committee with finding $1 billion in revenue to help pay for the tax cuts. The Congressional Budget Office (CBO) estimates that the two oilfield lease sales Murkowski has proposed for Section 1002 could provide the federal government with $1 billion over 10 years after proceeds are split with the Alaska state government.

However, the CBO warns that it cannot predict the whims of oil speculators. Analysts say oil companies may not be interested in drilling at such a remote and controversial location, especially with oil prices so low. Fracking has unlocked large oil and gas reserves in Texas and other states, and much of the land already available for drilling in Alaska remains undeveloped. A recent analysis by Bloomberg Business called the $1 billion figure into question, finding instead that federal revenues would probably top out at about $145 million.

The deal could still be a boon for Alaska, where the state’s $2.8 billion budget deficit is looming large over its relatively small population. Anything helps in a fiscal crisis, and geologists estimate that there is enough oil under the refuge’s coastal plain to fuel an oil rush like Alaska enjoyed at Prudhoe Bay from the mid-1970s until recently.

“Alaska has a big budget crisis and is reliant on oil to fund state government, and it’s looking for ways to continue that reliance,” said Erik Grafe, an attorney in Anchorage with the environmental group Earthjustice, in an interview. “And ultimately, it’s not sustainable, but I think there is certain desperation about what to do in a low oil-price future.”

On the national level, however, a hopeful $1 billion would hardly make a dent in the $1.5 trillion the Republican tax cuts would add to the national deficit, and lawmakers in Washington are not trying to balance Alaska’s budget anyway. Republicans will be able to count the $1 billion as hypothetical income in their quest to offset the tax deficit, but Murkowski has something they may want more than oil revenues: the “yea” vote needed to secure their first big legislative victory.