Sen. Murkowski Introduces Combined Bill Increasing Alaska’s Share of Offshore Oil and Natural Gas Revenues, Lifting Crude Oil Export Ban

U.S. Sen. Lisa Murkowski, R-Alaska, took an aggressive step today to ensure that Alaska receives its fair share of revenue from oil and natural gas production on Alaska’s outer continental shelf (OCS) by introducing the Offshore Production and Energizing National Security Act (OPENS Act). The legislation is a combination of four bills already reviewed by the committee, including Murkowski’s S.1278, the Alaska Offshore Lease Sale Act, and S.1312, the Energy Supply and Distribution Act.

“Alaska’s natural resources are vital to our prosperity,” Murkowski said. “With exploration proceeding in the Chukchi Sea, and the Alaska offshore emerging as a key part of our national energy security, it is critical that we ensure revenue sharing for the state and coastal communities. This is a matter of fairness that will create opportunities for Alaska tribal entities and allow us to invest in the workforce development, science, and infrastructure necessary to bring these vast resources to market.”

Alaska’s OCS in the Beaufort and Chukchi seas contain an estimated 23.6 billion barrels of oil and 104.4 trillion cubic feet of natural gas. Additionally, Cook Inlet, which provides the natural gas supply for southcentral and interior Alaska, contains an estimated 19 trillion cubic feet of natural gas.

Alaska currently receives 27 percent of revenues from oil and gas leasing and production in the 8(g) zone, the area between three and six miles from shore, but does not receive revenue sharing beyond the six mile limit. This is in contrast to the Gulf of Mexico states, which beginning in 2017 will share 37.5 percent up to a cap of $500 million annually from certain offshore production. Of the remaining funds, 50 percent is directed to the U.S. Treasury and 12.5 percent is directed to the Land and Water Conservation Fund (LWCF).

“LWCF funding may be an appropriate use of production revenues from the Gulf, but that Fund has primarily been used to put more land in federal hands in recent years, and I oppose that in Alaska,” Murkowski said. “Alaska has unique energy and infrastructure challenges that demand a different policy that aligns with our most pressing needs.”

Murkowski’s bill would provide additional long-term benefits to Alaskans by directing 12.5 percent of the revenues from offshore development to a newly established Tribal Resilience Program.

“In the near term, providing energy and revenues to Alaskans will require us to increase access in the areas where we already receive revenue sharing, most notably within the six-mile limit,” Murkowski said. “But in the longer term, my legislation will ensure that the State of Alaska and coastal communities supporting development will receive a substantial share of the revenues from production to compensate for the impacts of development. My bill will also provide a source of funds for tribes to build resilient communities by investing in energy systems and critical infrastructure.”

The OPENS Act would:

  • Provide for revenue sharing in the Alaska OCS region for the state and coastal communities.
  • Increase access to additional resources by requiring a minimum of three lease sales in each of the Beaufort, Chukchi, and Cook Inlet planning areas during any five-year period, and annual lease sales in the 8(g) zone of the Beaufort and Cook Inlet planning areas in future five year plans.
  • Establish the Tribal Resilience Program, creating a fund for tribal entities to promote resilient communities through investments in energy systems and critical infrastructure to combat erosion, improve health and safety, and foster resilient communities.
  • In the near term, direct funds for workforce development, investments in science, and permitting to ensure OCS oil has a pathway to the trans-Alaska oil pipeline.

The OPENS Act also provides revenue sharing and key protections for OCS development in the Gulf of Mexico and the Southern Atlantic, improves permitting for OCS development, and lifts the ban on crude oil exports. Allowing more exports from the Lower 48 will increase demand for North Slope crude oil at West Coast refineries by creating an outlet for crude oil produced in the midcontinent.