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Split on potential ANWR revenues still in question

Posted: Sunday, March 04, 2001

FAIRBANKS (AP) -- Bills filed by Alaska's congressional delegation to drill for oil in the Arctic National Wildlife Refuge differ on one big question: Who should get the lease money?

The answer to the question has huge implications for Alaska's treasury.

The bill filed by Rep. Don Young leaves the matter to existing law, giving 90 percent of the money to the state and 10 percent to the federal government as set out in the Alaska Statehood Act.

The bill filed by Sen. Frank Murkowski also leaves the matter to existing law -- but a different one.

That one says the revenue should be split 50-50, based on a formula in law that, so far, has been applied in Alaska's only to the National Petroleum Reserve-Alaska.

In past years, various opinions on the revenue split have prompted bitter disputes within the pro-drilling camp in the state.

Some say they want ANWR developed, but only if the state receives 90 percent of the ''bonuses, royalties and rentals,'' as Congress wrote in the Alaska Statehood Act of 1959.

Others say the important thing is to develop the oil, and that Alaska should accept some lesser share to advance that goal. Other states receive 50 percent.

The decision will mean, literally, billions of dollars to Alaska.

President Bush's budget projects that the federal government would receive $1.2 billion in bid bonuses from ANWR leasing in 2004, if Congress opens the area to drilling.

That would be the federal government's expected half from ANWR, according to Stephanie Hanna, spokeswoman for the Interior Department, which manages the land.

The other half would go to Alaska.

But is that enough?

''I'm sure that it's going to be debated,'' said Amy Inaba, Young's spokeswoman. Young, in his bill, chose to simply leave out mention of the revenue split, she said.

''It doesn't have to be in there. It follows existing law, and, as it is now, existing law is the Alaska Statehood Act,'' Inaba said. ''That's where we're going to start from.''

Murkowski, though, decided on an approach more in line with previous ANWR-opening bills.

''Every opportunity we have here to maximize the benefits of opening ANWR to Alaska -- which go far beyond the royalties and bonus bids, which go to jobs and the resulting increase in quality of life issues -- we're going to try to do,'' said Brian Malnak, chief of staff for the Senate Energy and Natural Resources Committee that Murkowski heads.

Alaska's delegation started warning in the early 1990s that Alaskans would likely have to compromise on the revenue issue if they wanted to open ANWR.

''I predict that we're going to have to come back and tell you that Congress will approve ANWR only on the basis of 50-50,'' Sen. Ted Stevens told a joint session of the Alaska Legislature in 1991.

The legislation didn't become law that year, but then-Gov. Walter Hickel nevertheless sued the federal government to enforce the 90 percent rule.

That case was still in the courts in 1995 when the issue got hot in Congress again. Hickel's successor, Gov. Tony Knowles came to Washington and promised that he wouldn't sue the federal government if ANWR were opened with a 50-50 split.

But it wasn't opened that year, and Knowles continued Hickel's suit. The U.S. Court of Claims dismissed it in 1996, the Court of Appeals in Washington did the same a year later, and the U.S. Supreme Court declined to review the decision in 1998.

Joanne Grace, an assistant state attorney general in Anchorage, says current U.S. code is clear on the subject. Following the Statehood Act's direction, it says that, of money received from ''sales, bonuses and royalties'' on federal land, ''90 per centum thereof shall be paid to the state of Alaska for disposition by the Legislature.''

In his lawsuit, Hickel argued this arrangement couldn't be changed because the Statehood Act was an inviolable compact between Alaska's people and Congress.

The courts didn't agree, Grace said.

Judges have found that some agreements in statehood acts are not subject to unilateral change by Congress, Grace said. But the Court of Claims said the revenue-splitting formula in Alaska's Statehood Act was not that sort of agreement, she said.



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