Deficit Reduction Omnibus Reconciliation Act of 2005

DEFICIT REDUCTION OMNIBUS RECONCILIATION ACT OF 2005

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Ms. MURKOWSKI. Thank you, Mr. President.

I am pleased to be standing on the floor today about 8 months after the last opportunity that we had to debate the issue of development of a very small portion of the Arctic National Wildlife Refuge. During that time--during that 8-month intervening time--we have seen the price of a barrel of oil rise to as high as $73--now about $63. The chairman of the Energy Committee indicates that this morning it is about $59.

That rise has come because of a number of factors--continuing strong oil demand in China and India and other developing nations. It has come because of the effects of weather. We have seen the consequences of the hurricanes in the gulf. It comes also because the world fundamentally needs more oil.

Goldman Sachs, in August, predicted that oil will average $68 again next year.

Also, since the last time we debated the subject of ANWR, we passed an Energy bill. In that Energy bill, we addressed not only production, but we addressed conservation. We addressed renewable energy sources, alternative energy sources. But in terms of doing anything significant to directly increase domestic oil and gas production, we didn't do much in that Energy bill. We delayed that action until now.

I would like to take some time this morning to talk about why development of the Coastal Plain is not just necessary in light of the current events in the past few months, not just the price of energy but in light of what has happened up north in view of the technological change, the new data that has been developed in the past decade to prove, to establish, that we can develop ANWR oil without harm to the environment and to the wildlife that live there.

My colleague from Washington, who has proffered this motion to strike the ANWR provision, has said her amendment is really about national priority. I would suggest that the national priorities which are at stake with ANWR are priorities that relate to energy security, a priority that relates to environmental security, and a priority that relates to National and economic security.

These are what the priorities are about and this is what ANWR can do for us as a nation. It can help us with our reliance on foreign sources of oil, it can help us with jobs, it can help us build a stronger economy, and it can help us in terms of meeting our environmental obligation to our land.

Let me talk about some of these issues. First, national security. When we talk about the reliance we have as a nation on foreign sources of oil, it is not just talk. The reality is, this hits us, it impacts us in an incredibly significant way. Right now we are about 58 percent dependent on foreign oil. This dependency is expected to pass the two-thirds mark within the next 20 years. It threatens our national security. It threatens our economy.

When we see statements coming from Venezuela, for instance, one of our leading sources of imported oil, suggesting maybe they do not need to do business with the United States, and we recognize the competition for oil on the global market, competition from China, from India, we recognize we must do more domestically to meet our needs, to strike this balance between our need and what we are able to supply.

Chairman Domenici spoke to the jobs factor, the economic side, as well as what this means to our balance of payments. ANWR oil will help stabilize not only our national energy prices, but it will generate more than $30 billion in Federal revenues within 15 years.

We talk about reducing our balance of payments deficit all the time. People need to appreciate one-quarter of this Nation's trade deficit relates to what we pay other countries for our oil. Last year we paid $166 billion to buy oil overseas. We will pay even more than that this year. We have to do something to address that balance of trade issue.

The jobs will be created. People associate jobs as drilling and exploration jobs. What they need to keep in mind is, when we have development of this size that we believe we can have on the Coastal Plain, this means jobs all over the country in terms of making the nuts and bolts, the pipes, the hauling, the shipping. This means increased commerce, increased job activity all over the country.

We throw around a lot of numbers, but look what it could mean to individual States: To my colleague from Washington, 12,000 jobs in Washington State; 80,000 jobs in California; 48,000 jobs in New York State; Pennsylvania gets 34,000; Florida, 34,000; Arkansas, 5,500. These are jobs associated with the activity that will go on up north. This is one of the reasons we have support across the country for opening ANWR, a small portion of the Coastal Plain, to oil exploration and development. People see the economic opportunity for them even in States that are thousands of miles away.

Farmers recognize this will help them with stabilizing what they need to do when they are planting the crops in the spring. Think of those products made from oil. We get so fixated on the transportation sector, but the reality is we derive much from petroleum. There are those that will say if we park every car in this country today, we would not have this incredible dependency on foreign sources of oil, we would not have this dependency.

However, I suggest we are a nation that is dependent on petroleum for many things. Transportation is incredibly important, but we have toothpaste, footballs, ink, life jackets, antiseptic, dentures, glue, clothing, food preservatives. So much of what we consume as a nation comes from petroleum products. We should not say, if we conserve a little bit more, we do not need to open ANWR. We need to face, as a nation, that we have a reliance on petroleum.

When we talk about the amount of oil available up north, again, we hear numbers floating all around. Some people say it is 6 months' supply; it is an insignificant supply. The fact of the matter is, and this is according to USGS estimates, ANWR's Coastal Plain has a 50-50 chance of containing the second largest oilfield in North America. As was stated before, what we anticipate to get out of ANWR would be the equivalent of the Texas oilfields. To those suggesting Texas is insignificant in terms of its contribution, we would say that is crazy.

Another example regarding what we anticipate to get from the reserves up North: the equivalent of what we have been receiving from Saudi Arabia for the past 25 years. Again, these are not insignificant amounts of oil.

What we anticipate we would receive from ANWR on a daily basis would have offset the oil we lost when the Gulf of Mexico was hit by the hurricane damage and we had all of the oil shut in.

If we are to discount the potential of ANWR, it is as shortsighted a viewpoint or perspective as we could ever have when it comes to our energy sources. This is akin to saying we should not open up Prudhoe Bay because, based on the reserves we know or expect to see there, we think it will only provide this country 3 years' worth of oil. That is what the estimates were. Prudhoe Bay has provided this Nation with up to a quarter of its domestic oil supply for the past 28 years.

We want to be given a chance on the Coastal Plain to demonstrate we can do something actively to reduce this country's reliance on foreign sources of oil.

Again, back to the national priorities. Care for the environment: We take that very personally in Alaska. I take it very personally. I was born and raised there. I am raising my kids there. I want my grandkids to be raised there. I want them to have the quality of life we as Alaskans enjoy. We take the obligation to not only create jobs and revenues for Alaskans, but we take the obligation to care for our land as one of our highest priorities. This is why it is significant. When Alaskans speak on this, 70 percent of Alaskans support developing ANWR. The residents who live on the Coastal Plain, the people of Kaktovik support opening ANWR because they can see the benefits to them, but they can also see they can have the benefits of jobs and revenues that can help them with their schools and their health clinics, that they can do that in balance with the environment, so their hunting, their subsistence, their whaling, is not sacrificed.

We like to talk up North about the gains in technology that have been made over the past 30 years. They are stunning. We are proud to speak of them. Earlier, Senator Domenici spoke to the trip we took up North with several Members and the Secretary of Interior and Secretary of Energy. We went to an exploration pad built up on an ice pad. They make an ice pad, and the ice pad is connected by an ice road. This road is almost a Zamboni-type machine. They roll it out over the very frozen tundra and they create this road of ice. The ice buildup is probably a foot or so thick, maybe higher in certain areas as you approach stream crossings. The exploration pad is a pretty compact unit and very impressive in terms of the size and scope of the equipment used. They have Rollagons with tires that are 15 feet high. They are huge, immense pieces of equipment. They go in, haul in the exploration equipment over the ice roads in the middle of the winter. Keep in mind, the State, in consultation with other agencies at the Federal and local level, make a determination for exploration. You cannot come in and explore at any time. You have to do it during the season that is allowed. They make measurements as to the thickness of the freeze before they will allow any activity to begin construction of the ice roads or any activity on the tundra.

This is an example. This is not the exploration unit we went to, this is in the National Petroleum Reserve. It is very similar in size. We have the exploration rig standing taller in this photograph with a few outbuildings that allow those working out there to stay warm, get a little bit to eat. You can see the ice road going out there on the tundra. That is what it looks like in the winter. This rig probably is out there for 2 to 3 weeks. Then they pack up and move it to the next exploration area the company might be looking to. This is what it looks like in the summer.

This photograph is the exact same area we saw, Rendezvous 2 well, National Petroleum Reserve. This is exactly what it looks like during the summer. The ice pad has melted. All of the equipment was removed during the winter when the ice roads were there. What is left is this stub of that exploration well. It is tough to tell from this picture because it actually looks pretty tall, but that stub is only about as tall as I am. It might be about 6 feet, a little taller. That is what is left.

This is what we do up North. We do it for a couple of reasons. First, because we know it is the right thing to do. We need to make sure we are caring for the environment. Second, we have the toughest, the strictest environmental standards for oil exploration and drilling anywhere in the country, and I would say probably anywhere in the world. We are proud of it. We are proud of the results that come out of this. We can do the exploration. We do it in a safe and sound manner. We try to leave as little footprint as possible. We are doing that because it is the right thing to do, but we are doing it because we are working with the Native people who live up there, who have lived up there for generations, who want to be able to continue to hunt and fish and whale.

The caribou are free to room. The central caribou herd near Prudhoe Bay in the 30 years since we have had oil development has grown 10 times. Some say we scare away the caribou and the Native communities will not have the subsistence source. The fact of the matter is, the reality proves otherwise. We are doing what we should be doing when it comes to care for the environment.

Polar bears have not been mentioned today, but they might later in debate so I will address them. There are some who are concerned that man's activity there will be driving the polar bear from the Coastal Plain. The fact of the matter is we have very healthy polar bear stocks up North in the Coastal Plain area where we are talking about the potential for ANWR development.
We have about 29 identified dens. We use infrared detection to determine where the polar bear are actually denning so we do not go near them. We are taking the steps needed and necessary to care for the animals and the environment.

Other things we are doing to recognize we need to work with the environment, with the animals, with those who would live there, include drilling restrictions during the summer months to prevent noise activity. There are prohibitions on any kind of seismic activity when the whales are migrating through. We are using directional drilling so we go into the ground and under the surface, and we are able to drill out 3 or 4 miles in every direction so there is no disturbance to the surface.

We are talking about a 2,000-acre limitation. I will go back to the map of the Coastal Plain to again put it in perspective. We are talking about 2,000 acres. That is about the size of an average size ranch in South Dakota, according to what the Senator from South Dakota tells me--2,000 acres in an area. The Coastal Plain on this map is the green area. The Coastal Plain is 1.5 million acres. We are asking to drill and explore in an area the size of 2,000 acres out of 1.5 million. The other colored areas on the map indicate the wilderness area and the Refuge itself.

The orange shown on the map is the Refuge. The wilderness area is the yellow part of it. The whole Arctic National Wildlife Refuge itself is an area the size of South Carolina. It is 19.6 million acres. Of that 19.6 million acres, we have 8 million that are dedicated wilderness. We cannot, will not, have no intention of going in and doing anything. That is entirely protected.

The balance in the orange is all Refuge. We are not talking about any exploration activity or development in that area. The only area we are looking at exploring is the green area, the 1.5 million acres. And within that we are talking about 2,000 acres.

For those of you who live and work in the Washington, DC, area, that is about the size of Dulles Airport. Actually Dulles Airport is a little bit bigger than that. So that kind of helps put in context what we are talking about.

Now, the Senator from Washington mentioned this legislation would also open up and allow the natives of Kaktovik to open up and be able to explore on their lands that are contained in the Refuge. The 2,000-acre limitation applies to the natives of Kaktovik, the Arctic Slope. It applies to all lands within the Coastal Plain--all lands within the Coastal Plain.

If there is oil that is discovered and explored and produced on native land, that part is part of the 2,000-acre limitation. So we are not expanding this from 2,000, plus whatever might be found on the native land itself.

Let me speak a minute to some of the other issues that were raised by some of my colleagues. The point was made there is nothing in this legislation that would prohibit Alaska oil from being exported. In fact, that is the case. But I should remind my colleagues that very little--very little--Alaskan North Slope crude has ever been exported. We do not anticipate that it would be exported, given the demand on the west coast, given the demand in this country. None is regularly exported now, and it has not been exported regularly in the past 6 years.

Now, it is true that back in 1995 we had a glut of oil on the American west coast, and Congress did, in fact, vote to permit the export of Alaskan oil. So from 1996 to 1999 there was about 5.5 percent of Alaska production that was being exported over to the Asian countries to relieve that glut.

We are now in a different time, a different place. There is no excess oil on the west coast. At this point, even though we are allowed to do so, there is no oil that is being exported. So where is it going? Fifty percent of all of Alaska's gas, coming from Prudhoe Bay, goes to the California refineries. This is near San Francisco and LA. We have 42 percent going to Puget Sound up in Washington State, and 8 percent goes to the State of Hawaii. There is a very fractional amount that stays in Alaska for in-State refinery needs.

But what you also need to keep in mind is that it is cheaper for us to ship the oil to the lower 48 than to the Far East. It is a matter of pure logistics. It is 2,056 miles to LA versus 3,401 miles to Yokohama, Japan. So the economics of it suggests that it does not make sense to ship any oil from Alaska overseas at this point.

Now, another issue that was raised was the issue of oil spills. This is something that when you hear the debate, these issues raised, you kind of have to take a deep breath and say the statistics on a piece of paper do not tell the whole story, unless you have the facts, the footnote, and the background that goes with it.

It has been suggested there have been all of these spills up North, and these spoil the Arctic tundra. But what they do not mention is, the companies that are operating up there have to report every spill--every spill--of any nonnaturally occurring substance. So if there is a spill of saltwater, it has to be reported--anything more than a gallon of oil or chemicals, such as lubricating oils, hydraulic fuels.

So when you go up North, you will see in the wintertime--and will in the summertime because the vehicles during the cold winter months are kept running for a good portion of the time--each and every one of the vehicles has what they call a ``diaper'' underneath the transmission to collect any leaking transmission fluid. Because if that were to get on the road, if that would get on the surface, that could be a reportable incident.

The vast majority of the spills at Prudhoe Bay have been of saltwater, saltwater used in water flooding to enhance oil recovery. They have not been oil spills.

Now, the other thing you do not hear is that the average oil spill was 89 gallons. This is the equivalent of about two barrels of oil, and that of that, those two barrels of oil, 94 percent of that oil was absolutely, totally cleaned up. According to DEC, which is the State Department of Environmental Conservation, 93 percent of all oil spills were of less than 100 gallons in volume, two-thirds were of less than 10 gallons, and less than a quarter barrel of oil.

So over the past decade, for the past 10 years, up North, there have only been 11 crude oil spills of more than 1,000 gallons, and 97 percent of that oil was fully recovered.

We can talk about the spills and reportable spills, but if you look at a number, it is important to know: A, what was it that was spilled; B, how much; and, C, how the cleanup was handled.

Prudhoe Bay is actually one of America's cleanest areas. ANWR development, given the technology we have, we know is going to be even better.

Now, I have to address the issue of too little oil to even bother exploring. I mentioned it very briefly at the beginning.

The USGS has recently updated its estimates. In fact, it was just within the past week or 10 days or so that USGS released its updated estimates for the amount of economically recoverable oil that will be found in ANWR. What they are now saying is that at the prices we are looking at--they peg it as $55 a barrel--93 percent of all the technically recoverable oil will be economically worth producing. That is up from a previous estimate of 83 percent. It means we have a 50-50 chance the Coastal Plain is going to contain 9.7 billion barrels of oil. Again, this would be the second largest oil field in North America.

When we talk about the amount that is available to us, I think it is important to put that in perspective. We are talking about the second largest field in North America. Currently, Prudhoe has been operating and supplying 20 percent of this country's domestic energy needs. It has for 30 years. We want to be able to supplement that with ANWR.

There is one other point I do feel is important to address. Several of my colleagues on the other side have suggested that because ANWR is contained in this budget reconciliation package, it is not the appropriate place, and that for a major policy decision such as this, it has not been given the time and the consideration and cannot be in this process.

As the senior Senator from Alaska, the occupant of the Chair, knows, this is something that has been debated and discussed for decades. ANWR has been the subject of dozens of bills, literally many dozens of congressional hearings. Legislation to open ANWR passed the Congress in the 1996 Budget Reconciliation Act. It was vetoed by President Clinton. But we have had several bills that have been introduced since then.

In the 106th Congress, we had legislation. Six bills were introduced in the 107th Congress. Legislation to open ANWR was approved by the House in the 108th Congress. In the 109th, also, the House introduced legislation. There have been countless tours of the Coastal Plain, where many Members of this body have had the opportunity to go up and see it for themselves. ANWR has probably been one of the most thoroughly researched, debated, and discussed issues pending before the Congress for the past 18 years.

I do not think any of us can stand here with a straight face and say that Congress is acting too quickly on this issue. It is something that has been aired very publicly, and over a great deal of time, with a great deal of public input.

I would like to conclude my remarks by speaking very briefly about those people who live in the Coastal Plain, the residents of Kaktovik. These are a very hardy people who have lived there for generations and generations, and who want to remain. But they are in a community where energy costs are extremely high. It is very difficult to find any kind of economic activity in the area. They are primarily a subsistence-based village. But they want to make sure, like all the rest of us, their kids get a decent education. They want to make sure they have some access to health care within their community. They want to have certain protections, if you will--whether it be a fire truck to help them when they have a house fire, as they had a couple years ago and had no way to provide for the protection of the property in that home.

They view the opening of ANWR as an opportunity for them to be participants. But they are also looking at this from the very critical perspective of being the only Alaskans who live in this area who would be affected by the development. They want a seat at the table. They want to be consulted. They want to be heard. They want to make sure that, in fact, the development that does take place is done in concert with their needs as the residents of this area for generations and their needs as people who live off the land.

We are working with the people of Kaktovik. I have introduced stand-alone legislation, along with my colleague from Alaska, and along with my colleagues from Hawaii, that would provide not only for environmental protections to be written into how we develop ANWR, but basically we codify all of those items we have discussed over the years, whether they are the environmental concerns, whether it is the 2,000-acre limitation on development, but also a provision to provide for economic impact aid to the residents of Kaktovik and any other Alaskans who may be impacted, to provide for a method of consultation with the natives of Kaktovik and the region.

What we are trying to do through the stand-alone legislation is provide for, I think it is fair to say, safeguards. For all those who may be concerned that, well, this budget reconciliation says ``open up ANWR, the only limitation is a 2,000-acre limitation,'' be aware that what we are providing for in the freestanding legislation, I think, is a very comprehensive set of guidelines for how we move forward positively, as we look to achieve that balance between development and care and concern for our environment up North.

With that, Mr. President, I yield the floor.

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