Tax cuts could make ANWR production more attractive to Big Oil

Houston Chronicle:
More than a decade after former president George W. Bush tried but failed to open up drilling in the Arctic National Wildlife Refuge, oil companies are now poised to gain access to what is one of the country's largest and most remote wilderness areas.

Under legislation designed to help pay for an historic corporate tax cut, the U.S. government would begin leasing a 1.5 million acre section of ANWR, where one of the largest oil fields is believed to lie. But with oil prices below $60 a barrel, and environmental groups poised to go to court to block any development within the refuge, the question remains whether enough oil companies would be interested in drilling in one of the harshest and most remote corners of the world to produce the kind of revenues Republicans in Congress are promising to offset the costs of the tax cuts and their impact on the deficit.

The Senate is expected to vote on its version of the tax plan next week.

"Any discoveries in ANWR would face significant obstacles before reaching first oil," said Alison Wolters, an analyst at the energy research firm Wood Mackenzie. "Oil companies would have to decide if they think the opportunity is worth the potential delays and a lot of legal wrangling and back and forth with regulators."

The opening up of ANWR would be a bonus for an oil industry expected to profit mightily from the Republicans tax reform plan, which would cut the corporate tax rate to 20 percent while preserving key tax breaks, such as the deduction for drilling costs on future production, that the industry has long fought to preserve.

Among those expected to take a close look at ANWR are oil giants Exxon Mobil and BP, along with Conoco Phillips and Houston-based Hilcorp, all of which already have operations on Alaska's North Slope.
There is more.

The biggest beneficiaries of Big Green's opposition to drilling in ANWR have been the Russians and OPEC.   It created an artificial scarcity of oil that allowed the oil exporting countries to pump up the price.  Big Green was also trying to push up the price to make their inefficient alternative energy projects look more competitive.


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