Green Car Congress
About GCC Contact  RSS Subscribe Twitter headlines

« Concept Engine: Intermeshing Differential Rotors | Main | Petrobras Announces Another Deep-Water Oil Find »

Print this post

EIA: ANWR Oil Production Would Peak at 780K Barrels per Day

23 May 2008

Anwr1
ANWR production would peak in 2028 (ten years after the start of production). Click to enlarge. Source: EIA

The opening of the Arctic National Wildlife Refuge (ANWR 1002 Area) to oil and natural gas development would result in additional oil production of a peak 780,000 barrels per day in 2027, according to the mean case developed by the Energy Information Administration in a revised assessment of ANWR potential. That would result in trimming $0.75 (in 2006 dollars) off the projected cost of a barrel of oil, according to the EIA.

In an assessment of ANWR four years ago, the EIA concluded that ANWR production would peak, in the mean case scenario, in 2024 at 870,000 barrels of oil per day. (Earlier post.) EIA revised its earlier assessment in response to a request from Alaska Senator Ted Stevens.

Anwr2
Opening ANWR would drop US dependence on imported oil in 2030 by 3 percentage points in the mean case—from 54% to 51%. The high and low resource cases project a 2030 oil import dependency of 48% and 52%, respectively. Click to enlarge. Source: EIA

The new analysis—like the earlier one—assumes production begins 10 years after the opening of the area to development via enabling legislation. The primary constraints to a more rapid development of the ANWR oil resources are the limited weather “windows” for collecting seismic data and drilling wells (a 3-to-4 month winter window) and for ocean barging of heavy infrastructure equipment to the well site (a 2-to-3 month summer window).

The assumed timeline is as follows:

  • 2 to 3 years to obtain leases, including the development of a US Bureau of Land Management (BLM) leasing program, which includes approval of an Environmental Impact Statement, the collection and analysis of seismic data, and the auction and award of leases.

  • 2 to 3 years to drill a single exploratory well. Exploratory wells are slower to drill because geophysical data are collected during drilling, e.g., rock cores and well logs. Typically, Alaska North Slope exploration wells take two full winter seasons to reach the desired depth.

  • 1 to 2 years to develop a production development plan and obtain BLM approval for that plan, if a commercial oil reservoir is discovered. Considerably more time could be required if the discovered oil reservoir is very deep, is filled with heavy oil, or is highly faulted. The petroleum company might have to collect more seismic data or drill delineation wells to confirm that the deposit is commercial.

  • 3 to 4 years to construct the feeder pipelines; to fabricate oil separation and treatment plants, and transport them up from the lower-48 States to the North Slope by ocean barge; construct drilling pads; drill to depth; and complete the wells.

The analysis also assumes sequential development of fields, with new fields in ANWR beginning development 2 years after a prior ANWR field begins oil production. The decision to use a 2-year time lag in bringing ANWR fields into production is driven by four factors, according to the EIA:

  1. The large expected size of the ANWR fields, which complicates the logistical problems associated with their development.

  2. The required considerable investment infrastructure to begin production in these fields and to link these fields to the TransAlaska Pipeline System (TAPS).

  3. Competition in investment and drilling resources from other domestic and foreign projects, which potentially limits the resources available for ANWR development.

  4. Increasing the rate of ANWR development might also require an expansion of TAPS throughput capacity.

In the new low and high ANWR oil resource cases, additional oil production resulting from the opening of ANWR peaks in 2028 (10 years after the beginning of production) at 510,000 and 1.45 million barrels per day, respectively. Between 2018 and 2030, cumulative additional oil production is 2.6 billion barrels for the mean oil resource case, while the low and high resource cases project a cumulative additional oil production of 1.9 and 4.3 billion barrels, respectively.

Crude oil imports are projected to decline by about one barrel for every barrel of ANWR oil production. Opening ANWR results in the lowest oil import dependency levels during the 2022 through 2026 time frame, when oil import dependency falls to the minimum values of 46 and 49% for the high and low oil resource cases, respectively. During that timeframe, the mean resource case and AEO2008 reference case project an average oil import dependency of 48 and 51%, respectively.

Because ANWR oil production is declining after 2028, US oil dependency rises to 51% in 2030 in the mean resource case, compared to 54% in the AEO2008 reference case. The high and low resource cases project a 2030 oil import dependency of 48% and 52%, respectively.

Additional oil production resulting from the opening of ANWR would be only a small portion of total world oil production, and would likely be offset in part by somewhat lower production outside the United States. The opening of ANWR is projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, light crude oil prices of $0.41 per barrel (2006 dollars) in 2026 for the low oil resource case, $0.75 per barrel in 2025 for the mean oil resource case, and $1.44 per barrel in 2027 for the high oil resource case, relative to the reference case.

The EIA projects world oil consumption will be 117.6 millions barrels per day in 2030.

The steady rise in oil prices has re-energized efforts in Congress to open domestic oil and gas resources for exploration and production. Among the legislation proposed is a bill co-sponsored by Representative Roscoe Bartlett (R-MD), who had formerly opposed opening ANWR for exploration.

The American Energy Independence and Price Reduction Act (H.R. 6107), introduced by Rep. Bartlett and Rep. Don Young (R-Alaska), would use revenues from the ANWR leases to fund a variety of alternative and renewable energy programs. The bill assumes production will come online in 5 years.

I have resisted drilling in ANWR because I believe that these oil reserves are like money in the bank that is yielding huge interest rates. I don’t think you ought to rush to the bank and pull it out and spend it. Today, with oil at $134 per barrel, there is obviously no surplus energy or capital to invest in alternatives. I am joining as an original cosponsor of this new bill because it dedicates the entire federal share of revenues from ANWR to increase federal investments in the research, development and production of cleaner domestic, alternative and renewable sources of energy, energy efficiency and conservation.

Of course, it is impossible to drill without some environmental impact. However, I have been to ANWR. I am convinced that the environmental impact will be minimal.

—Rep. Bartlett

Bartlett has been a consistent voice in the House about the issue of Peak Oil.

Resources

May 23, 2008 in Oil, Policy | Permalink | Comments (56) | TrackBack (0)

Comments

And this from Canada -

http://www.petrobank.com/can-bakken.html

Posted by: al bertagor | May 23, 2008 at 11:18 PM

Honda Fit
Toyota Yaris
...
Volkswagen Jetta TD
...
Prius

Bike }
Bus } when appropriate

There are loads of solutions available right now, if people would just use them.

You do not need to wait for PHEVs or EVs to solve the problem.
Just get a smaller car and/or drive less.
As people have said $4 gas will bring this on (as it has in Europe and Japan).

If people really want to look down on other road users, I'm sure you could create a roof mounted sight like a gunship helicopter and mount it on your Fit.

It would be easier on the environment than buying a SUV.

And if you really need a SUV for a job - borrow your neighbor's, which he probably won't be using very much.

Posted by: mahonj | May 24, 2008 at 12:08 AM

All this talk of openning ANWR and other site for drilling is just plain silly. There is little oil there compared to our usage. The only group this helps is the oil industry. We will still have high oil prices. If we open these site up, then the US will have no oil reserves at all in fifty years.

Posted by: VaPrius | May 24, 2008 at 05:19 AM

It doesn't matter if ANWR peaks out at 780,000 bpd. That's about all we have room for in the Alaska pipeline anyway. Right now the pipeline is about 60% utilized. We couldn't transport more than this anyway.

We really need to start producing more oil from our coastlines. The oil companies are only allowed to drill off the coast of Texas and Louisiana. Who knows how much oil we have on the Continental Shelf. China is drilling for oil off the coast of Florida but we aren't. Does this make any sense? We are the only country in the world that doesn't develope its own resources.

We need to make a strong commitment to stop using oil. But in the meantime we need to produce all the oil we can from our own country. We need leadership from Congress and the President. We need compromise. New technology is coming but in the meantime we need oil!

Posted by: d burgdorff | May 24, 2008 at 07:17 AM

Here is the meager action your Congress makes:

"“NOPEC” — is a meaningless gesture whose symbolism is intended to mollify angry motorists as gasoline prices approach $4 per gallon. Even though Democrats are intentionally keeping those prices high for environmentalist reasons, they have passed this bill as their way of shaking a stick at the Organization of Petroleum Exporting Countries (OPEC), the international cartel whose supply decisions have enormous and dangerous influence on the price of oil.

The NOPEC bill’s relevant language reads as follows:

"It shall be illegal and a violation of this Act . . . to limit the production or distribution of oil, natural gas, or any other petroleum product . . . or to otherwise take any action in restraint of trade for oil, natural gas, or any petroleum product when such action, combination, or collective action has a direct, substantial, and reasonably foreseeable effect on the market, supply, price, or distribution of oil, natural gas, or other petroleum product in the United States."

This is designed to make OPEC’s activities illegal. But here’s the problem: All that talk about “limiting the production of oil” could apply to Congress just as much it does to OPEC. Thomas Pyle, president of the Institute for Energy Research, comments:

"The Congress itself is guilty of committing the crimes outlined in this legislation. In fact, it is a repeat offender. The only difference between the Congress and OPEC in this regard is that OPEC is willing to produce oil for its citizens and its economies. The U.S. Congress, unfortunately, is not."

Posted by: oleshiek | May 24, 2008 at 09:18 AM

Now the firestorm has begun and the little people are gonna pay.

"For many years, the prospect of ANWR has been considered and investigated by countless government agencies in preparation for the "thumbs up" from Washington. Though it has never been fully given, Congress and the White House have constantly been pushing the possibility for action. It is only a matter of time before permission is granted to tap this valuable resource."
University of Minnesota, Minnesota Daily

http://www.mndaily.com/articles/2008/05/05/72167068

Posted by: tanksarot | May 24, 2008 at 09:37 AM

Came across some interesting data today:

The FHWA’s “Traffic Volume Trends” report, produced monthly since 1942, shows that estimated vehicle miles traveled (VMT) on all U.S. public roads for March 2008 fell 4.3 percent as compared with March 2007 travel. This is the first time estimated March travel on public roads fell since 1979. At 11 billion miles less in March 2008 than in the previous March, this is the sharpest yearly drop for any month in FHWA history.

So, we are responding to high gas prices, and this is before the current price spike. Heard on Bloomberg last week Mastercard said the demand drop was 7%.

Posted by: Cervus | May 24, 2008 at 10:05 PM

If most of us buy the most fuel efficient car or truck available then we wouldn't need to drill for oil in ANWR or depend on foreign oil for that matter. It doesn't have to be a hybrid, just any car capable of doing over 35MPG would help decrease our dependence on foreign oil.

Posted by: Gerald Shields | May 24, 2008 at 11:10 PM

In order to do our share we need to both try hard to invest in better cars and trucks AND get our remaining oil reposits online so as to cushion the blow for the developing world. Our arse is not enough we need that oil more for total world supply then just our own as either way we will consume about the same amount and thus without anwr we will take all that oil from someone else who cant outbid anyone else. It may be little to you but its the total oil needs of ALOT of people and it will decide when the iuk runs our over there.

Posted by: wintermane | May 25, 2008 at 02:19 AM

Sure. Go out and BUY a new car. With what money? I'm a carpenter trying to make ends meet in a construction meltdown. I got two kids to feed, a wife and now my transportation costs have doubled in 18 months! I can't sell the Ram because 1) I need it for work, 2) can't get more than a couple thousand for it. Can't buy a new truck because my credit is already stretched, and these fancy new trucks you guys want me to buy cost a fortune. And why? So you all can have less pollution?

You're making enemies of the working man with your smug "ride a bus" advice and it's going to bite you in the as*!

Posted by: broke | May 25, 2008 at 07:00 AM

Has anybody mentioned the four-ten-hour-work-day? Adapting rail lines with high density residential areas and relaxation of zoning laws to permit mixed busines and residential areas-anybody remember when grocers and bakers would live in apartments above their businesses?"

Posted by: ken | May 25, 2008 at 07:27 AM

"and these fancy new trucks you guys want me to buy cost a fortune. And why? So you all can have less pollution?"

No, so that people such as yourself will use less oil and we'll all have less of a gas cost problem. I agree though that many people such as yourself are now between a rock and a hard place. Still there are a lot of people that have seen this coming for a long time and gotten a pretty raw deal from trying to convince others that gas guzzlers are a bad thing. For instance were you for or against raising gas taxes a few years back or raising CAFE standards? Doing these things 5-10 years ago would have meant a lot less pain now. The majority of Americans are experiencing the fruits of their aversion to government regulation and perhaps it may be a worthwhile although painful lesson.

Posted by: | May 25, 2008 at 09:42 AM

broke: I know the stress of trying to support a family in hard times. I also know a carpenter that works out of a used civic hatchback with three of the seats ripped out and a roof rack on the top. It's amazing how much he can stuff into that car. The only problem he has is the number of sheets of plywood he can get on top at any one time. If it's more than he can handle then he has it delivered or makes a couple of trips.

Posted by: Neil | May 25, 2008 at 09:56 AM

I would like to take back the comment "worthwhile although painful lesson". I wouldn't wish this lesson on anybody. It just irks me that many of the people complaining now I bet would never have voted for energy taxes or other conservation measures when it mattered.

Posted by: | May 25, 2008 at 10:07 AM

“I was privileged to fly, in a bush plane,into ANWR”

“2 person 3-6000sq foot homes,and other wasteful habits!”

One of the universal traits of environmental crackpots is that the are people of privilege telling people of privilege how to live.

Broke, I noticed when I was building my 3000sq foot home that my subcontractor all drove 2wd trucks. When you went down into the city where it did not snow the number of 4wd increased. So the privileged could go skiing.

We can afford bigger houses than the GI-bill Cape Cods our parents built because carpenters are more productive using power tools and modern houses use much less energy. The apartment that I lived when I was in the navy starting a family used more energy than any of the houses that I have been fortunate to live in since.

The way we produce energy has much lower environment impact too. While I am pretty sure Richard Burton can not figure out how to produce the things that our society needs and protect the environment at the same time, us greedy doers can figure it out.

Good luck surviving the housing down turns, broke. At least you have a skill that is needed in the long term. Maybe building energy infrastructure.

Posted by: Kit P | May 25, 2008 at 10:21 AM

Ta a whole slew of house flippers and such got nailed here and blew the housing market to bits.. Still a ton of money around but people are bunkering up now and finding safe places to weather the storm.

Posted by: wintermane | May 25, 2008 at 11:16 AM

@ joseph

well said, and that also explains very well why common sense kills

Posted by: socrates | May 25, 2008 at 11:33 AM

Broke,

I hear Houston is booming. You may try down that way for summer contract work. All my friends in any kind of construction, often had to travel to hot spots. Sometimes the family went, sometimes not. Depended upon time of year. And you may get a good trade in for another truck there as well. Big ranches still need big trucks. Don't forget large companies need people with your skills as well if you want a more stable environment. Someone they can trust to keep outside contractors honest.

I hope the best for you and your family.

Posted by: Michael | May 25, 2008 at 09:12 PM

Some oil facts... transport considerations,

This problem is multi-faceted and shared by all. No one side is to blame. There are over 200 million cars in America. China and India are the the fastest developing transport sector today. This is the cause of price increase. As these countries of a billion each come online to modern world standards so to does energy cost increase for oil. Russia itself has seen double-digit increase as women never drove in the past are now buying cars. Places like St. Pete are a mess daily with massive traffic jams on roads never intended for so many cars. This is the cause. Three countries representing 1/3 of world population coming online to live as modern as the West.

Russia has no incentive to decrease the price of oil as this is their only true industry of any notable size besides other mineral based commodities. Putin used it as a tool cutting off supplies at one time which threatened Europe. It is still one of the most corrupt societies in the world. It renationalized all oil property which is now run by Putin's old friends, many from KGB days. He's loving all of this and has now situated himself as the defacto leader, with a figure head as President.

Fortunately, China and India have great incentive. These nations have many companies already involved in free market working with the West. Large deals are online for battery and solar power. With many more factories scheduled.

Oil drilling is restricted in this nation since the 70s. It forces American oil companies abroad into other countries, many hostile or dangerous that adds to the chaotic atmosphere of futures prices.

Our largest company, Exxon-Mobil is only 14th in the world. It must import 90% of its oil from countries like Nigeria, Saudi, Russia. It has no choice. The largest companies are nationalized and mainly Middle East nations, with Russia and Venezuela in the mix. China and India subsidize gas prices so there is no incentive for drivers in those nations to save. Russia does as well.

List of Top 15 oil/gas companies in the world:

Iran (NIOC)
Saudi (Arammco)
Russia (Gazprom)
Qatar
UAE
Iraq
Kuwait
Venezuela(falling fast)
Nigeria
Libya
Algeria
Russia (Roseneft)
Malaysia
Exxon Mobil 14th
PetroChina

94% of the worlds current oil supply is locked up by foreign governments.

Source of oil/gas: Credit Suisse Bank
report by powerline
graph: http://www.powerlineblog.com/OilChart9.php

If you look at the size of Exxon-Mobil in comparison for reserves on hand, it is easy to see our problem of supply and demand is easily influenced by foreign hands.

Hope this helps to see some of the reasons we suffer supply and high price problems today. As someone said, China drills not more than 75 miles off our coast. Who will we trust to keep our oceans safe? China? Or an American company with oversight from EPA and ENV orgs like Sierra Club?

Posted by: | May 25, 2008 at 09:32 PM

An interesting exercise. The effect of manipulated rise in oil singles out the population that gets hurt the most - small business. Since U.S. economy continues to support a large base of sole proprietorships and small business - there will be many families like broke's. A vast number of workers live from paycheck to paycheck without cash to buy new, pricey vehicles.

In the meantime the government, reluctant to put domestic energy policy in place years ago, will now be forced to approve new drilling. Clearly it is a knee jerk reaction which will have marginal effect outside of allowing government to claim they are reacting. But the ANWR habitat will suffer because of it. And resources best left in the ground will be exploited. And renewable investment will decline as speculators defer to oil again.

Had the oil sheiks and manipulators not forced prices so high so fast, our transition to alternative energy would have continued on a reasonable time line. But the manipulators are impatient to get what they want - the last oil dollars before the collapse. Over-action begets the same. Unfortunately not only does small business get hurt - the environment does too.

Posted by: gr | May 26, 2008 at 06:33 AM

Oil independance is at least three/four decades away, if at all, so lets drill and stop the madness.

Posted by: shigley | May 26, 2008 at 03:29 PM

The sooner we drill the safer the drilling will be. I do not wana even think how it would go if we had a total econ meltdown and it became a national defense matter.

That is what will happen sooner or later folks.

Posted by: wintermane | May 26, 2008 at 06:45 PM

broke: you're in a tight spot, all right. Part of the problem was that 20 years ago, you and folks with 8 dogs and 12 kids were the only people driving trucks and suburbans. That was before the car companies realized they could make huge profits if they could get around CAFE and build cheap low-tech trucks if only they could get everybody to buy them. Hence the marketing campaign that convinced people that huge SUVs (that were cheap to make) were somehow more valuable and safer (they never were, only more dangerous for everyone else) and that that is what the public really wanted. And people somehow bought that load of BS. NOW we are no closer to using less oil and there's a glut of big trucks and SUVs on the market that far exceeds demand for the people that actually always did need them.
The truth is we are not going to drill our way to lower prices. Didn't happen in the 70's. The prices of everything else just went up to match. Took awhile, too. Going to happen again, as well. Only way off the oil dependency roller coaster is with electric drivetrains. Hopefully we won't forget that once the inflation of everything else has washed out the memory of the oil price jump that started it.

Posted by: DaveP | May 27, 2008 at 05:09 PM

Things can change in a hurry in the oil business. Iraq was only allowed to produce 2.5 million barrels per day under the United Nations "oil for food" program. Despite overthrowing Saddom Husein and having the sanctions lifted, the continuing violence has prevented any increase in production. With Iraq's known reserves they could easily produce enough oil to take care of world demand for many years to come. Is it any wonder that oil rich countries like Iran and Saudi Arabia fund insurgents?

Posted by: d burgdorff | May 27, 2008 at 07:03 PM

SUVs were never cheaper to make, all cars pretty much cost the same to make within a few hundred $$ of each other.. but they could be sold at a much higher profit since people expected larger cars to be worth more.. of course gas was $1 a gallon back in 1990. Ford and GM desperately need the high profit items to pay union wages and benefits..

Posted by: Herm | May 28, 2008 at 07:14 AM

Post a comment
[Please keep comments on topic. Disagreement is fine; insults, abuse or wild diversions are not. Comments not meeting those standards will be deleted. Abuse of another commenter’s email address will result in the banning of the offender from this site. In an attempt to prevent the posting of insulting and abusive comments, this site maintains a list of prohibited words and phrases, which, unfortunately, grows with time. Including one of the prohibited words or phrases will flag the comment as “spam”, and it will be blocked.]

Green Car Congress only allows comments from registered users. To comment, please Sign In.

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c4fbe53ef00e55291a2c58834

Listed below are links to weblogs that reference EIA: ANWR Oil Production Would Peak at 780K Barrels per Day:

Green Car Congress © 2009 BioAge Group, LLC. All Rights Reserved. | Home | BioAge Group