Senate OK's oil drilling in Arctic refuge

WASHINGTON -- The Senate yesterday narrowly approved a plan to allow oil and gas drilling in the Arctic National Wildlife Refuge, paving the way for energy exploration in an environmentally sensitive region that has been closed to developers for more than four decades.

''We're stepping down the road to energy independence," a jubilant Senator Ted Stevens, Republican of Alaska, said after the 48-to-51 vote, which killed a last-ditch effort to strip the measure from a sweeping budget bill.

Proponents said oil exploration in the region could alleviate escalating gas prices and reduce the nation's dependence on imported oil. But opponents, outnumbered this year because of Republican Senate wins in last year's elections, said the region would suffer irreparable damage for relatively little energy production.

ANWR is not expected to produce oil for at least 10 years; even then, environmentalists note, the known resources there would not have much impact on gas prices or overall energy demand.

Senator Maria Cantwell, the Washington Democrat who sponsored the failed measure to kill the drilling provision, said oil production from the region would reduce gas prices by a mere penny per gallon while further swelling the profits of an industry currently enjoying record profits.

''This is a sweetheart deal for oil companies," Cantwell said. ''Let's not pollute one of the last great refuges of America."

The measure was part of a broader fiscal package that would reduce the federal budget by more than $39 billion over the next five years by cutting such programs as Medicaid, student loans, and farm subsidies.

Opening up the Arctic refuge to oil and gas drilling would bring the federal government an estimated $2.5 billion in leasing fees from energy companies.

But as the Senate handed oil and gas companies a huge win, it also delivered them a mild slap, voting 86 to 13 yesterday to ban energy companies from exporting any oil or gas they find in ANWR. Without the restriction, ''there is no assurance that even one drop of Alaskan oil will get to hurting Americans," said Senator Ron Wyden, an Oregon Democrat and ANWR drilling opponent.

Republican leaders have also begun taking on oil companies, at least in their rhetoric. Just a few months after pushing though an energy package that granted the industry tens of billions of dollars in tax benefits, GOP lawmakers have joined the chorus of protests about high gas prices and record industry profits.

Senator majority leader Bill Frist, Republican of Tennessee, has called for hearings to determine whether oil companies are engaged in price gouging at the gas pump. Senator Judd Gregg, Republican of New Hampshire, has proposed a tax on excess oil profits to fund a federal heating assistance fund for low-income people.

House Speaker J. Dennis Hastert, Republican of Illinois, wants oil companies to invest their wealth in new refineries, which he said would bring down gas prices by increasing the supply.

''I think they realize that the American people are angry about the high gas prices. They don't want to be giving away their public lands just for the profits of oil companies when they're not going to benefit as consumers," said Drew McConville, a spokesman for The Wilderness Society, an environmental advocacy group that opposes ANWR drilling.

But Stevens defended the oil industry's record profits, which he said could be used to find more energy for consumers.

''They have a lot of profits, but they're going to have to spend a lot of money to get oil when the prices go up," he said.

The Senate had long been the final barrier to oil exploration in the arctic refuge; some moderate, environmentalist Republicans had joined Democrats to stop the idea. But the measure, scheduled for a vote next week, now appears unusually imperiled in the House.

The House has repeatedly approved proposals to drill in the Arctic refuge. But this year, the proposal has been attached to a broader budget package that is drawing protests from moderate Republicans as well as Democrats reluctant to cut popular domestic programs. And some Republicans also don't want to allow drilling in the Alaskan wildlife refuge.

If the discontented Republicans join what is expected to be a united Democratic opposition to the overall budget bill, the budget package could be defeated, House members in both parties said. House Budget Committee chairman Jim Nussle, Republican of Iowa, said earlier this week that he was concerned that the ANWR item might peel off critical votes for the budget package.

Representative Jeb Bradley, a New Hampshire Republican who opposes ANWR drilling, said he has not decided how he will vote on the budget bill. ''I'm hopeful it will be taken out," he said of the ANWR provision.

Stevens said the Wyden language, which prohibits the export of oil found in the refuge, might tip some votes in the House and save the package from defeat.