Generating $1 billion dollars in federal revenue from lease sales in the Arctic National Wildlife Reserve (ANWR) was never anything but a pipe dream, and now that official revenue estimate could be put to the test. Language in the House’s Interior and Environment appropriations bill released this week would force the Department of the Interior to cough up the cash before drilling can begin. Oil and gas leasing in ANWR was ostensibly authorized as an offset for the Tax Cuts and Jobs Act of 2017, which carried a $1.4 trillion price tag. At the time, the Congressional Budget Office projected $1 billion dollars in federal revenue from the lease of lands in ANWR for oil and gas exploration and development. But our own analysis shows that total potential revenue is much smaller. Taxpayers can only expect between $9 million and $14 million from the leasing of ANWR lands.
The appropriations bill, which provides funding to numerous federal agencies, contains language that would require that plots of land leased in ANWR must first generate at least half the amount of federal revenue projected before any lease contracts can be honored by the federal government. That is, if the amount of federal revenue generated from the lease sales falls short of $500 million, no oil and gas exploration will take place.
The bill must still overcome several hurdles, namely passing the House and Senate before making its way to the president’s desk. The bill now moves to the full House Appropriations Committee for consideration, which is currently scheduled for Friday, July 10. If passed, this provision would be a huge win for taxpayers. ANWR is home to a rich, diverse, and sensitive ecosystem, and development of these lands for pennies on the dollar would expose federal taxpayers to huge liabilities with little to show for it.