October 24, 2001

Senate Likely to OK Alaska Refuge Drilling - Official

By REUTERS

Filed at 4:20 a.m. ET

ANCHORAGE, Alaska (Reuters) - Congressional approval of oil drilling in Alaska's

Arctic National Wildlife Refuge is imminent, a Bush administration official predicted

to an industry-friendly audience on Tuesday.

Andrew Lundquist, executive director of the administration's National Energy Policy

Development Group, said he believed the Senate this year or next year would pass

legislation allowing drilling in the wildlife refuge, an important goal of the president.

The House already has approved an energy bill that includes oil development in the

refuge, the most controversial part of Bush's national energy strategy.

Lundquist said Senate Majority Leader Tom Daschle, a Democrat, had temporarily

blocked action on the measure by the Energy and Natural Resources Committee

because he knew that Alaska Republican Frank Murkowski, the panel's ranking

minority member, ``had the votes to move it out of committee.''

``But guess what. I believe we have the votes on the floor of the Senate. And the will

of the Senate should be allowed to prevail,'' Lundquist told the Alaska Support

Industry Alliance, an Anchorage-based organization of oil field service companies.

The National Energy Policy Development Group was created by the president and is

chaired by Vice President Dick Cheney.

Lundquist, the keynote speaker at the Alaska Support Industry Alliance's annual

meeting, said strong backing from Alaskans for development in the refuge had

helped sway some members of Congress.

Congress voted to open the refuge to drilling in 1995, when Lundquist was an aide

to Murkowski, but then-President Bill Clinton vetoed the measure. Events will be

different with Bush in office, Lundquist said.

Alaskans have historically supported drilling in the refuge by a margin of about

2-to-1. The state, which has no personal income tax or statewide sales tax, depends

heavily on oil taxes, royalties and fees for its state government operations.

About two-thirds of general government revenues come from oil production on the

North Slope, where the state owns the mineral rights on land drilled by the oil

companies.

Oil revenues also have created a $24 billion state-owned trust fund that pays

residents annual dividends. This year's dividend from the Alaska Permanent Fund

was $1,850.28.

Environmentalists and some Alaska Natives oppose the idea of drilling in the refuge

because of potential harm to the

area's caribou population and other wildlife. They argue that because most of

Alaska's Arctic coastline is already open to development, the wildlife refuge should

be protected.