The Fuse

Senator Murkowski on Alaska Production, Arctic Drilling, and Crude Oil Exports

by Matt Piotrowski | July 27, 2015

Lisa Murkowski is a Senator from Alaska and the chairman of the Senate Committee on Energy and Natural Resources. She speaks with The Fuse about oil production in her home state, as well as energy policy at the state and national level.

You hail from a proud energy producing state, but Alaska’s oil production has been on the decline in recent years. What would you recommend to bolster the state’s energy production?

It’s a frustrating and needless decline, because Alaska has plenty of resources and overwhelming local support for their production. The main problem is that we need access to our federal lands and waters. Alaska has an estimated 46.1 billion barrels of oil and natural gas liquids in its federal areas, but nearly all of it is locked down right now. Beyond that, we need greater certainty in federal regulations. Whether offshore, in NPR-A, or elsewhere, we constantly face new bureaucratic hurdles that prohibit projects in Alaska from reaching production in a timely manner.

Alaska has an estimated 46.1 billion barrels of oil and natural gas liquids in its federal areas, but nearly all of it is locked down right now.

What does the rest of the country not understand about being a major energy producer?

The flexibility and opportunity it provides to us. Too many still have a 1970s-era mindset, and worry that truly opening up our energy markets will bring about dire consequences. But those days have passed. The reality, as nearly all experts have concluded, is that our nation stands to gain a range of benefits if we begin to act like an energy superpower. We can create jobs, strengthen our security, and deepen our diplomatic ties. Instead of competing with our allies and trading partners for energy, we can provide it to them, and magnify those positive effects around the world. And we can do it all while maintaining the highest environmental standards in the world.

This summer, Alaska will be home to Shell’s Polar Pioneer Arctic drilling rig, which you visited in the Port of Seattle. The rig’s deployment was met with protests from “kayaktivists” who oppose the controversial drilling program. What can oil producers do to change public opinion on frontier oil production?

I traveled to Seattle to tour the rig, and to speak at the Seattle Chamber about the folly of the activists’ position. We’re seeing a mistaken belief that if the U.S. does not develop its portion of the Arctic, no one else will, either. Look at Russia, look at Canada, look at others—that’s simply wrong. The good news is that a strong majority of the public supports production in the U.S. Arctic, and more will be convinced of its merits as it proceeds safely. Even President Obama and members of his administration have said that energy production in the Arctic can occur safely. We also need to ask ourselves a legitimate question: Would we rather have a barrel of oil from Alaska, or from Venezuela or the Middle East? I know what my answer is.

Would we rather have a barrel of oil from Alaska, or from Venezuela or the Middle East?

Which regulatory hurdles do you view as being the most burdensome and unnecessary in terms of oil and gas production?

In Alaska, it is both access and the never-ending permitting process. Federal agencies never seem to run across a condition or mitigation requirement that they aren’t willing to impose, regardless of what that means for a project’s economics. From what we hear from Lower 48 producers, it’s much the same: too many regulations that slow development without doing anything to protect the environment, a permitting process that takes far longer than anything at the State or local level, and restrictions on access to our most potentially productive lands.

What are your top three energy policy priorities for this legislative session?

Alaska is always at the top of my list, so let’s start there. I’m working to ensure that my home state and other coastal states finally receive a fair share of the revenues from offshore production. Opening new lands to development is also a key goal, as is reducing the cost of energy for our rural residents. Among my other priorities are protecting the reliability of our electrical grid, and passing a broad energy bill to modernize our nation’s energy policies. It’s been eight years since our last major bill, and members of the Energy Committee have brought forward dozens of good ideas.    

Working closely with Senator Cantwell (D-WA) as the Ranking Member on ENR, what do you think could serve as a viable political grand bargain on energy policy for this legislative session?

I’m not focused on a grand bargain, so much as writing a good bill. Senator Cantwell and I don’t agree on everything, but we’ve committed to working together where possible. And that’s going well so far. Our Committee considered 114 bills during four legislative hearings held between late April and early June. Our agenda now is to sift through them, and determine what can serve as the foundation for a broader bill that the Senate can take up in the fall.

Please discuss your position on lifting the ban on crude oil exports, and the status of the legislation you recently introduced. How are you getting more Democrats on board?

I’m proud to be leading the fight to end the oil export ban, and I have introduced bipartisan legislation in the Senate to accomplish that purpose. We are being quite methodical in our efforts to recruit additional cosponsors—basing our appeals in legitimate analysis, and trying to avoid letting this become a needlessly partisan issue. At 15 total sponsors and counting, we are headed in the right direction.

While your legislation is being reviewed in the Senate, you have asked President Obama to waive the export ban for crude to be sent to American allies. Who would be the biggest buyers of American light oil, since the U.S. has already backed out most light oil imports from producers like Nigeria and Angola?

Our most likely export markets are Europe and Asia, and there may be opportunities closer to home in the Western Hemisphere. The market may surprise us.

The President has clear legal authority to authorize exports to our allies and trading partners. When one applies, I hope he will use that authority. Our most likely export markets are Europe and Asia, and there may be opportunities closer to home in the Western Hemisphere. The market may surprise us.