Currents - Energy Industry Insights - October 2017 #5

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Drive for ANWR Oil Bonanza Could Prove to be a Bust for the Republicans' Budget -

"Congressional Republicans counting on a $1 billion windfall from selling oil-drilling rights in the Arctic National Wildlife Refuge to help pay for tax cuts may be in for a disappointment."

Why this is important: Since the inception of the 19 million acre ANWR in 1980, a 1.5 million acre portion along Alaska's northeastern coast known as the 1002 Area has been identified as a major potential source of domestic oil and gas. But, it has never been open to active drilling despite periodic political wrangling over the issue in the last three decades. The budget pending in Congress would open the 1002 Area and projects related leasing revenues of $1 billion as a means of offsetting (in part) proposed tax cuts. The reality may be revenues generated by opening ANWR may be far less than Congressional budget assumptions given the cost and regulatory uncertainty associated with Arctic drilling investment and operation, which would result in a greater federal deficit. The proposal, however, even if inaccurate, reflects the current trend to push energy production and development on all fronts.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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