The push is on from the Administration to open up the Arctic National Wildlife Refuge (ANWR) to drilling for oil and gas. The current approach is to embed drilling provisions as part of the Federal Budget Resolution.
In a speech in Columbus, Ohio earlier this week, the President briefly laid out his positioning.
To produce more energy at home, we need to open up new areas to environmentally responsible exploration for oil and natural gas, including the Arctic National Wildlife Refuge—that’s called ANWR. The Department of Interior estimates that we could recover more than 10 billion barrels of oil from a small corner of ANWR that was reserved specifically for energy development. That’s the same amount of new oil we could get from 41 states combined. Thanks to advances in technology—and Sam [Bodman, new Sec’y Energy] was briefing me on what he saw, he just went up there to look at the technology that would be used—we can now reach all of ANWR’s oil by drilling on just 2,000 acres. Two thousand acres is the size of the Columbus airport. By applying the most innovative environmental practices, we can carry out the project with almost no impact on land or local wildlife. And that’s important for you all to know.You see, developing a small section of ANWR would not only create thousands of new jobs, but it would eventually reduce our dependence on foreign oil by up to a million barrels of oil a day. And that’s important.
In March of 2004, the Energy Information Administration, at the request of Representative Richard W. Pombo, Chairman of the U.S. House Committee on Resources, published a report using government figures and analyzing—to the extent that anyone can without sinking a well shaft down through the coastal plain—the effect of drilling in ANWR.
Given the uncertainty over the exact amount of oil in place, the report lays out three scenarios: one for low-oil resources, one the mean case, the other for high oil resources.
Some of the report’s findings:
The mean-case estimate is that there are 10.4 billion technically recoverable barrels of oil in ANWR, divided into many discrete fields. This estimate includes oil resources in Native lands and State waters out to a 3-mile boundary within the coastal plain area. The mean estimated size of oil resources in the Federal portion of the ANWR coastal plain is 7.7 billion barrels.
It will take approximately 10 years to bring the first field on-line (comparable to other Arctic drilling).
Assuming sequential development of the fields, rank ordered by size, ANWR production would peak, in the mean case scenario, in 2024 at 870,000 barrels of oil per day.
Assuming that every barrel of ANWR oil is consumed domestically, it would reduce imports on a barrel-for-barrel basis.
Now for the President’s numbers.
Ten billion barrels is indeed the mean case estimate of recoverable oil—for all ANWR. Federal lands represent 7.7 billion barrels.
With respect to the acreage, in 1980 Congress set aside 1.5 million acres along a strip of the 19-million acre ANWR’s northern Arctic Ocean coast for possible oil exploration.
In 2001 (pre-9-11), hoping to forge a compromise that would get the drilling proposal passed back, Republicans limited drilling to just 2,000 acres along the coastal plain. However, those 2,000 acres don’t need to be contiguous, and only the equipment that touches the ground (i.e., the pipeline stanchions, not the pipelines, which are in the air) count toward the figure. Since a drilling platform can occupy as little as 10 acres, there’s still the possibility of having several hundred platforms, with a maze of interconnecting roads and pipelines, spread throughout the 1.5 million acre reserve.
That’s a bit different than the picture of a neat, airport-sized package of land dedicated to serving the petroleum needs of the nation.
The million barrels a day figure is 15% above the EIA’s mean case of 870,000 by 2024 but, given the imprecision of oil forecasting, let’s be generous and round up.
However, using the EIA’s projections of declines in domestic oil production and increases in oil consumption (mostly from the transportation sector), by 2025 ANWR would reduce US reliance on imported oil by four percentage points—from 70% to 66%.
Today the US imports some 10.5 million barrels per day. In 2025, the EIA estimates that almost to double to some 20 million barrels imported per day.
In other words, ANWR oil would make a small difference, but not a substantive, strategic difference. It doesn’t come close to solving the problem. The US would still be exposed by reliance on oil imports. Even if peak ANWR oil were available today, the US would still be importing more than 9 million barrels per day, and climbing.
The best way to reduce dependence on foreign oil is to make fuel efficiency (how about 40 mpg as a minimum) and alternate and renewable sources of energy immediate strategic national priorities.
Drilling in ANWR is not. Bad math, bad policy.