JUNEAU -- Gov. Bill Walker says his decision to veto the state grant given to the group that's been lobbying in vain to open the Arctic National Wildlife Refuge to oil drilling doesn't mean he's opposed to oil development there — only that it's time to find a new way.
Over the years, millions of dollars in state funds have been spent subsidizing the private lobbying effort of Arctic Power to open the ANWR coastal plain to oil drilling, but more than two decades later the state appears no closer to success.
Now Walker says he is changing directions with that effort and making an entirely different push to open what may be the state's last, best hope for a big new oil discovery.
Since 1992, the ANWR drilling campaign has been led by Arctic Power, a business-led, state-funded, Washington, D.C., lobbying effort.
But when the new fiscal year began this week, it did so without state money for Arctic Power, following Gov. Bill Walker's veto of its $175,000 funding in this year's budget. That was already a decrease from $250,000 in the just-ended fiscal year.
"Our not funding of Arctic Power should not be interpreted as a lack of interest in ANWR, it's just an acknowledgment of the fiscal situation we're in," Walker said.
Walker praised the group at a press conference following the veto, but said that state would look for other, more efficient and less costly ways to keep pushing for drilling on the coastal plain, a small portion of the South Carolina-sized refuge known as the "10-02" area for the section of federal law that put off indefinitely whether it would be wilderness or open to development.
But the budget Walker signed includes documentation of an additional reason for vetoing the Arctic Power funding. It said he wants to address the issues on which the Arctic Power group focuses through a "more effective method."
The Arctic Power budget has fluctuated dramatically over the years, topping $1 million in some years and getting significant business help along with the public money. But that was when prospects of success seemed higher, including when the late U.S. Sen. Ted Stevens had been in a position of power and able to add ANWR provisions into other must-pass legislation.
In recent years the vast majority of its funding has been from the state.
What the loss of the $175,000 will mean for Arctic Power is not yet clear, but the group's head, Adrian Herrera, said it will keep going.
"We're going to keep the doors open and do as best we can to make up the shortfall," Herrera said.
"Our goal is to work as many of our contacts in D.C. as possible to try and make that up," he said.
But federal nonprofit tax records for Arctic Power show that may be difficult. In 2013, the last year available, $291,000 of a $297,000 operating budget came from government grants, while $6,300 came from a gaming permit managed by Northern Lights Bingo.
House Majority Leader Charisse Millett, R-Anchorage, who has pushed for ANWR drilling in the Legislature, said she was surprised by Walker's veto but understood why it happened.
"It's unfortunate, but it's going to happen to everybody's favorite project, and tightening our belts is not going to be easy," she said.
While in the nation's capital, Millett said she's participated in Arctic Power lobbying, visiting members of Congress, their staffs and federal agency personnel in visits coordinated by the group.
Those efforts focus on members of key committees, as well as giving basic briefings on Alaska issues to new members and staffers, hoping to counter environmental opposition, Herrera said.
"Maybe they can up their fundraising capacity and make up that $175,000," Millett said.
Also supporting Walker's action, but less supportive of Arctic Power, was Rep. David Guttenberg, D-Fairbanks.
"I've always been cynical of the role Arctic Power played in D.C.," he said.
"We've put a lot of money in lobbying in D.C. for Arctic Power, and we've gotten nowhere and it's done nothing to put more oil in the pipeline," he said.
Further, he said, Alaska already has an office of the governor there responsible for advocating for ANWR and other Alaska priorities, along with the two senators, one representative and their staffs.
Walker's Washington, D.C., office, headed by Kip Knudson, a former oil company official, lobbies on behalf of Alaska issues.
Even with the state's difficult financial situation, Knudson said, he knows how tough the veto decision was for Walker.
"He's a huge fan of responsible resource development, in the 10-02 area in particular, and this has got to be just killing him," Knudson said.
Knudson said his efforts were coordinated with Arctic Power, which was funded through the Office of the Governor as well.
"I think it's a good division of duties, quite frankly, because we have to stay focused on a broader set of issues, while they get to stay burrowed in on this one thing," he said.
It is difficult to objectively determine how good a job Arctic Power has been doing, said Larry Persily, who formerly served as federal coordinator for Alaska natural gas transportation projects and has spent a good part of his time in the nation's capital.
"There's no real way to judge the effectiveness," he said. "They didn't succeed, but you can't judge by that because that's not their fault," he said.
National public opinion doesn't support oil drilling now, and that's not likely to change soon, he said.
"Oil prices, or gasoline prices at the pump, are relatively cheap for most Americans, and the domestic supply of oil is not at risk at the moment," he said. Those factors make it difficult to open ANWR.
"If you are an Alaskan and want ANWR, your best bet is when the country needs it," Persily said.
With Alaska's efforts at opening ANWR continually stymied, several years ago Arctic Power expanded its lobbying efforts to also support development of the National Petroleum Reserve-Alaska and the outer continental shelf, as well as seeking a share of federal offshore drilling revenues for the state.
Persily said the decision to lobby for other issues, such as getting a share of offshore oil royalties for Alaska, as states in the Gulf of Mexico already get, was probably a good idea.
"ANWR isn't going anywhere -- there's not enough votes to open it, and there's not enough votes to make it a wilderness, so it's probably going to be dormant for a while," he said.
Herrera disputes that, but acknowledged that more activity on other issues will be likely in the next year.
He called it a "near positive certainty that we're going to get an OCS revenue sharing bill of some sort moving across the Senate and into the House."
That's probably a better place for a lobbying effort, Persily said.
"OCS revenue sharing is probably a more doable issue, and you'd like to focus on something you can win once in a while," he said.
Walker hasn't yet said publicly what his new direction on ANWR will be, just that "we're going to fund that a little bit differently."
Millett said she discussed the veto with Walker but he didn't say anything privately either.
Walker said he'll do some lobbying himself.
"I have sort of taken up that challenge a bit," he said. "I've had half a dozen meetings with the secretary of the Interior (Sally Jewell) and three meetings with the president, and I'll continue to have more."