Nov. 2001 Vol. 222 No. 11  International Politics

William Garland,  Contributing Editor,  Washington

September attacks alter U.S. energy debate only slightly

WASHINGTON – Maybe it’s just as well the new war on terror, unlike the Persian Gulf War, hasn’t been linked closely with oil in the public mind. But the terrorists’ mad reasoning has left no doubt about the connection, tying one of the alleged U.S. wrongs to the ongoing military presence in Saudi Arabia, and the Gulf, that is rooted in the earlier war and petroleum.

In the weeks following the New York and Washington attacks, analysts speculated that the tragic events might encourage a new emphasis on domestic supply. They thought the situation might enhance chances for access to Alaska’s Arctic National Wildlife Refuge and other public lands, as well as the general outlook for President Bush’s energy plan. But they also speculated that it would spike oil prices, which rose briefly before heading lower on expectations of reduced demand.

Outlook blurred by attacks. Energy industry officials scrambled for weeks afterward to get a handle on prospective energy legislation in a capital consumed with responding to terror. Before the attacks, the House had passed its version of the energy bill that included ANWR leasing provisions, as well as a broad array of tax incentives favored by industry. The Senate’s energy provisions, including some tax measures, were included in a pending measure by Sen. Jeff Bingaman (Democrat-New Mexico), chairman of the Energy and Natural Resources Committee. White House endorsement of the full plate of House incentives remained an open question, as well as whether a final Senate bill would expand on the tax front. Bingaman’s bill did include a system of tax credits for producers during periods when prices sag for oil and gas.

After the attacks, House Majority Whip Tom DeLay (Republican-Texas) was among the first congressional leaders to say anything publicly, insisting in a press briefing that the Senate should catch up with the House by passing its own version of the bill. "One important step would be opening the Arctic National Wildlife Refuge" and passing other provisions in the House bill, labeled the Securing America’s Future Energy Act of 2001 or the "SAFE Act."

Environmental groups and opponents in Congress have continued to spout the mantra that ANWR’s supplies would amount to little more than a blip in U.S. production. DeLay countered such claims at the briefing, noting that "opening ANWR could meet the daily energy requirements of our armed forces for an entire year." More accurately, he then pointed out that "it could replace all the oil imported from Iraq for the next 50 years," more in line with the real impact over a period of decades of backing out hundreds of thousands of barrels per day that otherwise would come from foreign sources.

Even The New Republic magazine, long a bastion of liberal opinion, had heard enough plaintive cries from the enviros. In a lead editorial in late August, the magazine’s editors endorsed ANWR drilling, so long as it could be linked with higher SUV fuel standards: "What’s so bad about drilling in the Arctic National Wildlife Refuge anyway? From the wailing and rending of garments . . . you’d think the environmentalists had good evidence that drilling for oil and gas would ecologically devastate the 20-million-acre Arctic tundra. They don’t. Last year, the Trustees for Alaska – the state’s main anti-drilling group – released an exhaustive report on the impact of 25 years of oil production along Alaska’s North Slope, adjacent to ANWR. The report found plenty of small environmental mishaps that affected tiny pockets of land . . . but the overall damage was minor. . . . Passing both ANWR exploration and strict SUV regulations would mean Washington had finally decided to tell the country the truth about energy policy. And it probably wouldn’t hurt the caribou a bit."

A Bingaman spokesman said the senator’s bill, which he expected to become the Senate’s version of energy legislation prior to floor debate, was highly unlikely to include ANWR provisions, given the chairman’s longstanding opposition. He said Bingaman would push, instead, for legislation authorizing a gas pipeline from Prudhoe Bay to Alberta, Canada, where it would meet existing pipelines to the U.S. In floor remarks in early September, Bingaman described the pipeline as "an enormous construction project . . . requiring perhaps 2,000 mi of steel pipe and costing $20 billion." The Bush administration has backed the pipeline, which has run into criticism for its high price tag relative to lower gas prices.

Teamsters on the case. During House debate and prior to the attacks, the debate took an unlikely turn when labor union leaders, particularly Teamsters President James Hoffa, came out in favor of opening ANWR, highlighting the prospect for a significant bump in employment. The union’s blessing came with a price. To encourage their backing, the House bill included a provision, inserted by House Resources Committee Chairman Don Young (Republican-Alaska), requiring the hiring of union workers for ANWR projects.

API has projected that labor rolls could grow by up to 735,000 jobs nationwide and 25,000 in Alaska with ANWR development. Labor backing roiled environmentalists, who said the support was pivotal in a 223 – 206 House vote in favor of drilling. Sierra Club President Carl Pope told The New York Times, "There’s clearly been a rupture between the Teamsters and the environmental movement. . . . Some labor unions outmaneuvered us in the House. But we still think we can win this thing in the Senate."

Soon after the vote, Sierra Club and other groups circulated a new study by the Center of Economic and Policy Research, attempting to discredit the 1990 report pegging the number of likely new jobs at 750,000. The center’s study, based on what it termed lowered projections for ANWR resources and ultimate production, said only 46,300 jobs would be created. In response, a special Hoffa assistant told the Times, "We are comfortable with the jobs number developed" in the earlier calculation.

William Garland has covered energy for 20 years in Washington as a reporter and bureau chief for Texas newspapers, and also as editor of The Energy Wire. He is a regular contributor to this column.