Opening up federal lands to more oil and gas exploration would boost the federal treasury through new royalty payments, but would make almost no dent in the federal deficit, according to figures released Thursday by the Congressional Budget Office.
The nonpartisan budget office said opening up the Arctic National Wildlife Refuge to exploration — which is banned under current law — would bring in about $5 billion over the next decade, and about $2 to $4 billion a year in the decade after that.
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Meanwhile, pushing the Obama administration to open up other areas such as the outer continental shelf, which are legal but which the administration has opposed, would bring in about $2 billion over the next decade, the CBO said. The years beyond that were too uncertain for CBO to make a prediction.
The $7 billion total for the next decade — the standard budget window — is less than one-tenth of a percent of the $6.4 trillion in cumulative deficits President Obama is projecting over that same period.
CBO analysts said one issue for revenue is the long lead time it takes between when leases are sold and oil or natural gas is actually extracted.
But in future years, production in ANWR could boost the royalties the government receives by as much as 33 percent, from about $12 billion a year up to $16 billion, if the CBO’s top-line prediction comes to pass.
Republicans on Capitol Hill have called for expanding energy exploration in the U.S. both as a way of increasing the country’s own supplies, making it less dependent on unstable foreign sources, but also as a boon to the government’s bottom line.
Many Democrats oppose expanded drilling, arguing the fiscal benefits are canceled out by potential environmental costs and by continuing to delay what they say is a necessary transition away from fossil fuels.
