Arctic Wildlife Refuge

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Drilling in the ANWR

By Ryan ONeill
10/16/02
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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 worlds 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

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• 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

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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  Alaska - 48.8 million acres - was withdrawn from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

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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
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• 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
  Americas 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
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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

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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 didnt
  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) Mean7.7 (These numbers
  were estimated using the current state of
  technology of oil extraction, so as techniques
  get more advanced, mean could increase)

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• 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

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Potential Downsides to ANWR Drilling

• First barrel of oil wouldnt 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

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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 Alaskas
  North Slope is about one per every 18 hours,
  severely endangering wildlife

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• 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.

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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

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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

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• 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

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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.

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• GAS TAX!

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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
  isnt 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

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