SHOWDOWN NEAR FOR ANWR LEASING ISSUE

Congress is drawing near a showdown with President Clinton over exploration in the Arctic National Wildlife Refuge of northern Alaska.

Both houses have passed budget bills that permit leasing of the ANWR Coastal Plain, the House by a 227-203 vote and the Senate 52-47. The Senate held a specific vote on the ANWR issue, voting 51-48 to table a motion by Sen. Max Baucus (D-Mont.) to delete ANWR drilling.

Next in the process, a House-Senate conference committee is due to merge the two bills by Nov. 16 and then, if both houses pass the compromise version, send it to the White House.

The House bill also contains a provision to sell the Elk Hills Naval Petroleum Reserve in California. That sale, estimated to raise $1.55 billion, may be challenged in the conference committee because the government would lose expected revenues from its share of the field's production.

The Senate version of the budget bill contains a provision by Sen. Bennett Johnston (D-La.) to grant royalty relief to marginally economic oil and gas fields in the deepwater Gulf of Mexico.

Clinton has pledged to veto the budget reconciliation bill because of ANWR and other issues. A veto will force congressional leaders to negotiate a new bill because they lack the votes to override a veto.

BARGAINING CHIP?

Some observers believe congressional leaders may use the ANWR issue as a bargaining chip when a second reconciliation bill is drafted.

But Alaska Sens. Frank Murkowski and Ted Stephens, both Republicans, said last week they will vote against any reconciliation bill that does not include ANWR leasing. The Senate vote was so close their support may be needed.

Murkowski said Clinton should support ANWR leasing to give a boost to the U.S. economy. He said development of oil fields on the Coastal Plain would be the largest construction project in North America, producing 735,000 jobs nationwide.

He said, "This was a difficult vote for some (congressmen) because Americans are hearing only one side of this issue, the side championed by Interior Sec. Bruce Babbitt and the Gwitch'in Indians.

"They are not hearing from the majority of Alaska natives and the Inupiat residents of the Coastal Plain who understand the Arctic and know that production can occur safely without damage to the environment.

"Bruce Babbitt is ignoring the native support for ANWR development in favor of playing footsie with the national environmental lobby. His antics have been highly irresponsible and contrary to the national interest."

REVENUES QUESTIONED

Although the Congressional Budget Office predicted ANWR leasing would raise $1.3 billion for the federal government, the U.S. Geological Survey recently estimated it would net only $850 million.

Alice Rivlin, director of the Office of Management & Budget, sent a letter to Congress containing the new estimates shortly before the votes.

Murkowski countered that Rivlin was relying on "a politicized, back of the envelope USGS study that has been thoroughly discredited.

"Interior cooked the books. I have letters from federal employees who say science and the integrity of their work have been sacrificed to help Bruce Babbitt make a political point."

Murkowski, who chairs the Senate energy and natural resources committee, scheduled a Nov. 8 hearing on the USGS estimates issue.

Rivlin also questioned whether Alaska would sue to get 90% of the ANWR revenues, which is permitted by the Alaska statehood act, rather than the 50-50 split stipulated in ANWR leasing legislation.

Murkowski said Alaska's Gov. Tony Knowles, Senate President Drue Pearce, and House Speaker Gail Phillips have pledged in letters to seek state legislation accepting a 50-50 split.

Rep. Don Young (R-Alaska), resources committee chairman, charged that Rivlin has a conflict of interest because she recently was a director of the Wilderness Society.

He said, "The Wilderness Society has used the ANWR issue as its 'cash cow' for several years as a means to raise funds and membership nationally. In order to meet its $16 million annual budget, this organization has repeatedly used ANWR in its fund raising efforts.

"For Ms. Rivlin to now push the Wilderness Society's agenda as the director of OMB raises serious questions of impropriety. Can you imagine the public outcry if a former board director of a major oil company was actively supporting ANWR development while serving as the OMB director?"

ENVIRONMENTAL QUESTIONS

In a press conference the day of the Senate vote, Interior's Babbitt called ANWR one of the most important environmental issues that will be decided this year.

"This is the reason the administration has expressed itself so strongly on the issue," Babbitt said.

"It is the only conservation area in the nation that protects a complete range of arctic ecosystems, functioning in balance to maintain an incredible diversity of wildlife from polar bears to caribou, snow geese, and peregrine falcons.

"To drill the Coastal Plain of the Arctic National Wildlife Refuge for oil is the national equivalent of selling our birthright for a mess of pottage. We might as well dam the Grand Canyon for hydroelectric power."

Alaska's Young said environmental safeguards in the ANWR leasing measure would be more than adequate.

In the bill, Interior would set exploration and production rules to protect wildlife and the habitat. It could close portions of the Coastal Plain to drilling to protect caribou calving areas.