Oil & Gas Legislative Update: Favorable legislation bodes well for Alaska's future.

• Author: Strieker, Julie
• Position: OIL & GAS

For the past several months things have been looking up in Alaska's oil patch. Oil prices are edging up, announcements of big discoveries keep coming, and favorable state and federal legislation bode well for the immediate and long-term future of Alaska's oil and gas industry.

Perhaps the biggest news came with the passage of the federal tax overhaul bill in December, which includes a provision to open a portion of the Arctic National Wildlife Refuge (ANWR) to oil and gas leasing, a goal Alaska's congressional delegation has been attempting to reach for decades.

ANWR was created under the Alaska National Interest Lands Conservation Act (ANILCA) in 1980. ANILCA took about 8.9 million acres of land in northeast Alaska previously designated as wilderness and added another 9 million acres of public land to create the refuge. Approximately 1.5 million acres of land along the coastal plain was not designated as wilderness, but Section 1002 of the act mandated studies to assess its wildlife and potential petroleum resources. That strip of land became known as the 1002 Area, and USGS estimates show it may contain 10.4 billion barrels of technically recoverable oil.

However, ANILCA's Section 1003 states "production of oil and gas from the Arctic National Wildlife Refuge is prohibited and no leasing or other development leading to production of oil and gas from the [Refuge] shall be undertaken until authorized by an act of Congress."

Since the 1980s, Alaska's congressional delegation has attempted to open the 1002 Area to leasing but fell short in administration after administration until this past December.

As chairman of the Committee on Energy and Natural Resources, Senator Lisa Murkowski wrote the section of the bill that calls for an environmentally protective oil and gas development plan in the 1002 Area of the refuge. The plan requires two lease sales over the next ten years.

"This is a watershed moment for Alaska and all of America," Murkowski said after the bill passed. "We have fought to open the 1002 Area for a very long time, and now our day has finally arrived. I thank all who kept this effort alive over the decades, especially Ted Stevens and Frank Murkowski, and all who supported this bill. Alaskans can now look forward to our best opportunity to refill the Trans Alaska Pipeline System, thousands of jobs that will pay better wages, and potentially $60 billion in royalties for our state alone. This is a major victory for Alaska that will help us fulfill the promises of our statehood and give us renewed hope for growth and prosperity."

Alaska Governor Bill Walker says the move is a "historic opportunity for Alaska."

"This is an important...