Drilling in the ANWR
10/16/02
By: Ryan O’Neill
Oil in Perspective
In 2001, the U.S. consumption of oil was at a rate of 19 million barrels per
day, which annually adds up to over 7 billion barrels
This 7 billion barrel annual consumption rate makes up over 25% of the
yearly world consumption rate of 24 barrels, despite the domestic oil
reserves of the U.S. accounting for only 3% of the world’s total oil reserves.
With such a lack of domestic production, the U.S. is forced to import over
half of all the oil it consumes, with half of these imports coming from OPEC
countries
In midsummer 2001, with oil prices at $24 per barrel, the U.S. was spending
$210 million per day on imported oil, which would add to nearly $80 billion
per year if the price per barrel consistently stayed at $24 per barrel
This reliance on imported oil makes up 1/3 of the annual U.S. trade deficit
The U.S. has exploited its oil reserves longer than any
other nation, resulting in the cost of producing a barrel
of oil in the existing U.S. reserves being more than
anywhere else
Domestic oil production is expected to fall dramatically
over the next decade as existing fields are exhausted
and relatively few new reserves are discovered
This puts the U.S. in a position to have an even larger
reliance on imported oil, furthering the already high
security risks which are related to oil dependence
One near-sighted proposal to help reduce our foreign
dependence on oil has been to drill for oil in the Arctic
National Wildlife Refuge, located on the western half of
the oil rich North Slope of Alaska
History of Drilling on the North
Slope
Interest in the oil resources of northern Alaska began with reports in the
early 1900s of surface oil seeps along the arctic coast east of Point Barrow
During World War II, the entire North Slope of Alaska - 48.8 million acres was withdrawn from entry under the public land laws and thus held for
exclusive use by the U.S. government for military purposes. Extensive
government-sponsored exploration for oil and gas occurred in the NPR-A
during the 1940-1950s
In the 1950s, post-war construction and accelerating resource development
across Alaska raised concerns about the potential loss of this region's
special natural values
In 1952-53, government scientists conducted a comprehensive survey of
potential conservation areas in Alaska. Their report, "The Last Great
Wilderness," identified the undisturbed northeast corner of Alaska as the
best opportunity for protection, which eventually led to the establishment of
ANWR
In 1923, the 23-million acre Naval Petroleum Reserve No. 4 was established in
northwestern Alaska to secure a supply of oil for future national security needs.
That area was later renamed the National Petroleum Reserve-Alaska (NPR-A)
In 1960, 8.9 million acres of coastal plain and mountains of northeast Alaska
were designated as the Arctic National Wildlife Range to protect its "unique
wildlife, wilderness and recreation values”
The largest oil field in North
America was discovered on state
land in the Prudhoe Bay area in
1968, and additional petroleum
discoveries have more recently
been made on Alaska's North
Slope
For 2-1/2 decades, Alaska oil has
supplied 20% of America’s
domestic production, a $260
billion offset to the annual trade
deficit
Oil is transported from the North
Slope by the 800-mile Trans-Alaska
Pipeline System, from Prudhoe Bay
to Valdez in south-central Alaska,
where it is then transferred to oil
tankers
Emergence of the ANWR
In 1980, the Alaska National Interest
Lands Conservation Act (ANILCA) was
passed which doubled the size of
ANWR and designated most of the
original range as wilderness
Part of the range that was not
designated as protected wilderness is
known as the “1002 Area,” which
would be either designated as
Wilderness or be permitted to be used
for oil development based on studies
conducted
The studies showed that oil
development in the 1002 area would
have major effects on habitats and
species, and legislative approval for oil
exploration has not been approved
since
Potential Usage for ANWR
1998- United States Geological Survey released a report
regarding the oil and gas potential for the 1002 area of
the ANWR
Estimated between 11.6 and 31.5 billion barrels of oil
within the 1002 area (95% and 5% probabilities) Mean=
20.7 (These numbers didn’t take into consideration the
recoverability of the resources)
Estimated between 4.3 and 11.8 billion barrels of
technically recoverable oil reserves (Again 95% and 5%
probabilities) Mean=7.7 (These numbers were estimated
using the current state of technology of oil extraction, so
as techniques get more advanced, mean could increase)
Assuming a $22 per barrel price, annual Alaska revenues from ANWR oil
production could peak at over $800 million during heavy extraction after
taking into account a 50% federal royalty (Assuming 10 billion barrels were
recovered)
Over 25,000 jobs would be created in Alaska alone during the peak of
extraction (17 yrs after the first barrel is pumped)
74% of the technically recoverable oil lies on federally owned 1002 land
(instead of state and private lands)
Use of field presumed to be 50 yrs based on the 7.7 billion mean, however
many other sources estimate only 3 billion barrels of technically extractable
oil from 1002
Would bring large advances in technology along the Northern Slope along
with improvements in infrastructure
Potential Downsides to ANWR
Drilling
First barrel of oil wouldn’t be
produced for most likely a
decade, thus not doing
anything about short-term
reliance on imported oil
Even if the first barrel could be
produced tomorrow, pumping
out more oil is not the answer
to ridding of oil dependence
ANWR is the last corner of
North America untouched by
human activity, with the most
pristine environment around
On Wildlife
Drilling could have adverse effects on the abundant caribou,
muskoxen, and polar bear populations
reduction in the amount and quality of preferred forage available
restricted access to important coastal habitats
exposure to higher predation
alteration of ancient migratory patterns, the effects on nature which
we can not predict
the current rate of reportable spills on Alaska’s North Slope is about
one per every 18 hours, severely endangering wildlife
Whether the oil technically available in the Arctic
National Wildlife Refuge is 3 billion barrels or 12
billion barrels, the drilling will do practically
nothing to alleviate U.S. dependence on oil
imports, in both the current and long terms
Has the potential to severely damage a pristine
environmental habitats along with wildlife
There is a much better means to rid ourselves of
import dependency……….
Efficiency, Efficiency (Short Term)
Requiring replacement tires on cars and light trucks that roll as
smoothly as original equipment tires – 100 million barrels/yr
Ensuring optimal tire pressure – 60 million barrels/yr
Commuting cars carry just ONE more person ONCE a week – 60
million barrels/yr
Ensuring correct fuel octane is used – 24 million barrels/yr
Stopping the U.S.’s part in the annual dumping of over 700 million
gallons of oil into the ocean
These simple efficiency measures would completely displace Iraqi oil
imports
Efficiency (Long Term)
Energy Conservation!!
More fuel efficient cars- Congress should raise fuel economy standards,
starting with closing the sport utility vehicle loophole by holding SUVs and
minivans to the same fuel economy standards as cars
Congress should then boost fuel economy standards for the combined car
and light truck fleet in regular steps every few years
A 40-mpg standard would save more than 50 billion barrels over the next 50
years, more than 15 times the likely yield of economically recoverable oil
from the Arctic Refuge
Raising fuel economy standards to 40 mpg would save car owners $3,000
to $5,000 at the gas pump over the life of their cars, more than offsetting
increased vehicle costs
Increasing the fuel efficiency of cars has proven to be the key in
reducing not only the dependence on imported oil, but oil in general
1975-CAFE standards mandated pushed cars from 13 mpg to 27.5
mpg in 1986, saving 5 million barrels of oil per day
During this period, overall oil imports dropped by 42%, with an 87%
decrease in imports from the Persian Gulf, while GDP rose 27%
CAFE standards were rolled back by President Reagan, which
doubled the amount of imports from the Persian Gulf
If the U.S. continued enforcing the CAFE standards of 1975-1985,
the U.S. would no longer have a need for Persian Gulf oil
Other means
Faster deployment of hybrid and fuel cell technologies
Increasing use of insulation within homes to reduce
thermostat usage
promote public transportation and "smart growth"
development patterns that reduce driving, cut gasoline
use, and offer a better quality of life
But the ultimate answer to reducing U.S. dependence on
foreign oil, along with other societal problems such as
poverty, hunger, crime, lack of quality education, lack of
sleep, sexual infertility and every other problem is the….
GAS
TAX!
Conclusion
Drilling in ANWR would increase reserves by an almost insignificant
amount
The proposal is extremely near-sighted, and does nothing to
decrease U.S. dependence on oil, including imported
The amount of oil that is technically recoverable isn’t worth the risk
that such a pristine habitat and the wildlife within it are put at from oil
drilling
Oil is not going to be around forever, sooner or later conservation
and higher efficiency will have to be undertaken in response to
reduced supply, and measures to increase efficiency in all aspects
of energy consumption have been long overdue