(Archived Nov 8, 2005)
CBO Explains Its Arctic Refuge Lease Bonus Bid Estimates
June 16, 2005
On Feb. 4, 2005, eleven members of the U.S. Senate (including nine Democrats and two Republicans) asked the Congressional Budget Office to explain how it crafted its estimate of lease bonus revenues from the Arctic National Wildlife Refuge Coastal Plain. The senators' letter, which cited and attached a copy of this writer's Jan. 15, 2005 report on lease bonus revenues, noted that "oil companies have been willing to bid, on average, little more than $50 per acre for petroleum leasing rights on Alaska's North Slope," compared to an averages between $2,667 and $10,000 per leased acre necessary to generate CBO's then-current revenue estimate of $4.0 billion. Approximately two weeks later, CBO increased its Arctic Refuge lease bonus bid estimate to $5.0 billion. (See: "The Arctic Refuge Numbers Game: Update.")
On March 14 (two days before the Senate voted 51-49 to include Arctic Refuge drilling in the current congressional budget resolution) CBO responded to the senators' inquiry. Click here for the CBO response and this writer's rejoinder.
[The Oil Patch]
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