This article first appeared in The Hill.
Is one really conservative if conservatism only applies to financial resources? It’s our belief that conservativism should apply to natural resources as well - especially when the math doesn't add up in the use of things long protected.
Such is the case with Alaska’s Arctic National Wildlife Refuge. As a part of the contemplated tax bill, the Senate Energy Committee has been instructed to find $1 billion in revenue as a part of tax overhaul. Some would see it code for “let’s drill here,” but regardless of your perspective, the Senate’s version of the tax bill claims there’s a billion dollars to be had by drilling in one of the jewels of America’s wilderness refuge system.
Many Republicans who will support this tax plan don’t actually want to “drill, baby, drill.” But conservative principles ought to at least demand that the math adds up. An independent analysis done in partnership with the National Audubon Society shows that opening up the Refuge to drilling will raise less than $100 million of the promised $1 billion.
Consider that fact, just for a minute. For the cost of what it takes to put together one season of a TV series like “House of Cards,” Congress is endorsing breaking an agreement that has held through Democratic and Republican Congresses and presidencies over the last 60 years.
Here’s why the math doesn’t add up:
- The government actually needs to raise twice as much as we’ve been told: Federal law directs 50 percent of oil revenues from drilling in Alaska to the state because Alaska doesn’t have an income tax or a sales tax. So, right off the bat, we know that the actual revenue needed is $2 billion.
- The state would have to sell out every single acre to raise that amount: To reach that goal, all 1.5 million acres on the coastal plain within the Arctic National Wildlife Refuge would need to be leased. Maybe you can expect to sell 100 percent of iPhoneX’s made in the first month, but the most successful sale in Alaska’s history over the past 17 years was the sale of 42 percent of available leases in 2016.
- And, even if you could sell out (literally and figuratively) every one of those acres, you’d have to get a fantasy price, somewhere around $1300 an acre. Between 1999 and 2016, leases in the neighboring National Petroleum Reserve (NPR) generated an average of just $50 an acre. If that’s the going price, which is a high estimate, that means these new Arctic leases would generate $75 million in revenue even if they sold out. And here’s a breaking news proof point — just this week, the lease sales in the NPR drew just seven bids for just $15 per acre. Concerns from the Congressional Budget Office about meeting the $1 billion target led Senate leaders to add provisions to sell oil from the Strategic Petroleum Reserve – a clear admission that drilling in the Arctic Refuge doesn’t begin to fulfill the sales pitches.
- This isn’t even oil that will make America energy independent. There’s a reason why you haven’t heard the voices of big oil companies in this debate. The cost of drilling in the Arctic, given how cheap oil is from America’s vast shale and offshore reserves, simply makes this uneconomical to companies that would profit most from it.
- And even if they extract it, it’s likely to be exported.
So, let’s take that step back: we’re proposing ending 60 years of Republican and Democratic protection in one of the most prolific wildlife nurseries on the planet to make 5 percent -10 percent of the revenue that we’re promising the American people — all so we can export it to Asia? It’s math that doesn't add up. But it’s not too late to turn back - especially when it doesn’t pay to go forward.
Sanford represents South Carolina's 1st District. Yarnold is president and CEO of the National Audubon Society.