January 30, 2006 | WebMemo on Energy and Environment
Nobody outside of the Administration knows for certain the contents of Tuesday's State of the Union address, but President George W. Bush will likely devote several minutes to energy issues. Many predict he will announce a big boost in funding for federal energy research, with plenty of optimistic rhetoric about future breakthroughs in alternative energy sources and the like. However, the best energy measure the President could put forward is to call for legislation allowing oil drilling in Alaska's Arctic National Wildlife Refuge (ANWR).
Common sense almost won out on ANWR in 2005, but provisions to open it to drilling were narrowly defeated. At a time of high oil prices and political turmoil in so many oil-producing nations, Americans must make maximum use of domestic oil reserves. ANWR, which is currently off-limits to energy production, represents the single largest untapped source of onshore oil in the country. Its estimated 10.4 billion barrels are concentrated in a very small part of this 19 million acre piece of Northern Alaska. This is an area with a long track record of environmentally-responsible drilling, and the oil is conveniently located near the Alaska pipeline, which can bring it south to West Coast refineries.
Not only would the extra oil help bring down prices and add stability to the oil market, but ANWR drilling would also be an economic boon in other ways. The project would create thousands of private sector jobs, and assuming the current price of $65 per barrel, ANWR's estimated 10.4 billion barrels would create over $650 billion in wealth over the next few decades.
Both the House of Representatives and the Senate passed ANWR provisions in 2005, but they could not manage to do so in the same bill. First, the House placed drilling provisions in its version of the energy bill. However, the Senate, unable to muster the 60 votes necessary to overcome a filibuster, left ANWR out its version, and the Energy Policy Act of 2005 was finalized without it. Then pro-drilling Senators placed ANWR in the budget reconciliation bill, which is not subject to a filibuster, but the House was unable to support it in that vehicle. At the end of the year, the House successfully added ANWR to the defense appropriations bill, but the Senate could not overcome a filibuster against it.
As frustrating as this turn of events was, 2005 nonetheless was the first year in which both Houses of Congress expressed majority support for ANWR. Congressional supporters have vowed to try again in 2006, and it will likely be a close vote again. Support from the President in the State of the Union, highlighting the benefits of ANWR drilling and reiterating his longstanding support for it, could very well make the difference.
Whether or not he mentions ANWR, the President will probably announce new efforts to fund energy research, as he has in previous State of the Union addresses. However, it would be a mistake to see our energy future as an either/or proposition between current fuels like oil and potential new ones like hydrogen or cellulosic ethanol. Whatever new energy research programs the President announces, it will be at least a decade or two (if ever) before anything useful results from them. Meanwhile, Americans will continue to be dependent on current fuels and technologies, and for transportation, that means petroleum. The age of oil will be with us for at least a while longer, and Washington has an obligation to the American people to ensure that it is as affordable as market forces will allow. For this reason, drilling in ANWR should be a part of the State of the Union address and a part of Congress's legislative agenda for 2006.
Ben Lieberman is Senior Policy Analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.