Making the Case for ANWR

Making the Case for ANWR

Imported Oil Too Costly

 

The U.S. currently imports 50% of its oil.  We consume 18 million barrels of oil a day and the Energy Information Administration projects this to increase to over 25 million barrels a day in the next 20 years.   Meanwhile our domestic production, for which Alaska counts for 6%, is in steady decline.  Our current oil imports cost us $336 billion dollars a year, $922,072,320 per day, or $38 million dollars an hour.  Every barrel of oil produced at home replaces one that needs to be bought from abroad decreasing our debt and the outflow of money from our treasury.  Beneath the 1.5 million acres of the ANWR Coastal Plain are believed to be over 10 billion barrels of oil (mean average estimate).  In today’s $50-60 price range that oil is worth over 520 billion dollars.  At last years +100 dollar prices ANWR oil was worth over 1.3 Trillion dollars!  At maximum production the USGS predicts ANWR oil could add 1,500,000 barrels a day saving us hundreds of millions of dollars each day in imports.  There is little doubt America will consume oil for the next 50 years in ever increasing amounts.  This will mean an ever greater drain on our economy.  Oil imports are already the single largest source of our national debt.  ANWR oil will save us billions of dollars over decades of production and bring jobs and steady economic prosperity to the nation.  No other single source natural resource or industry could bring so much from so little effort and with absolutely no public expenditure.

 

North Slope Production in Decline

 

Prudhoe Bay is the largest oil field in North America and is located just 50 miles from ANWR’s 10-02 border.  Satellite fields of Prudhoe Bay lay just 2 -3 miles from the 10-02 Area itself and are currently being developed for gas and oil.  All the fields at Prudhoe Bay have been feeding the Trans-Alaska Pipeline System (TAPS) for over 30 years now, transporting nearly 17 billion barrels of oil to American markets.  Those fields however, are running low and TAPS is only 1/4rd full at just over 500,000 barrels per day.  Despite tapping into smaller marginal fields around Prudhoe Bay this decline in production has not been stemmed.  Without new sources of oil, the pipeline will eventually reach a “minimum threw-put” and its pumps will be unable to function.  When this happens TAPS, by law, must be disassembled and removed, thus stranding all other Arctic oil supplies.  The 10-02 represents the biggest and easiest fields to access to keep the oil flowing.  Feeder pipelines already exist to within 2 miles of ANWR and all the gas and water separation facilities already exist at Prudhoe Bay so little infrastructure would be required.  Because it is onshore, ANWR 10-02 oil is also far safer and less expensive to access than off shore oil.  ANWR’s 10-02 Area also contains natural gas for which access to it has been factored into the Alaska Natural Gas Pipeline’s (ANGP) economic feasibility study.  Thus for both the TAPS and the up and coming ANGP, ANWR’s 10-02 is vital.

 

Positive Economic Impact

 

The goods and services used to explore for oil and produce oil in Alaska’s Arctic all come from outside Alaska.  Almost 100% come from the Lower 48 states.  Since production began in the late 1970s oil companies have spent well over $50 billion buying goods and services and infrastructure from all 50 states.  This has benefited every state with long term, high paying, jobs in hundreds of different fields.  From the construction of oil tankers in Louisiana to the supply of food from farm states to the steel used to build pipelines from Pennsylvania, Alaska’s oil production has resulted in massive supply contracts across our nation.  ANWR production would further that business.

 

ANWR oil production could mean 10s of thousands of jobs nation wide.  These jobs would be in a myriad of fields such as engineers, shipbuilding, catering, medical supply, machinery contracting, construction, architecture, and others.  Over 30 years of production at neighboring Prudhoe Bay has proven without question the employment benefit for Arctic oil production.  Many of the 10,000 plus people working in Alaska’s Arctic oil fields come from outside Alaska and many return to homes outside Alaska during their R&R times.

Federal revenues from ANWR oil are estimated to be between $48-$142 billion @$60per barrel, and $85-$237 billion @ $100 per barrel.  This money would be a massive cash injection into our national coffers would reduce national debt dramatically.  Even before any oil is even found lease sale royalties alone would equal $4-6 billion.  This money is tax free to the American public, requiring no subsidies, and no diversion of any Federal Funds.  It is money entirely generated from the industry and its use of the land.

The raw cost of the oil (vs. having to import oil); the hundreds of billions in production tax royalties, and the long term economic jobs and business boost would be and economic stimulus like no other for this nation.

Arctic Technology

Constantly advancing technology has dramatically affected the feasibility of oil exploration and development in the Alaskan Arctic.  Alaskan oil exploration is the most expensive in the world, and from the beginning cost has been a factor in retrieving Alaskan oil.  In the 70s and 80s only 30-35% of oil underground could be technically recoverable.  Today with water and gas reinjection and directional drilling technologies the industry has boosted that recovery rate to over 60%.  The latest multilateral wells, combined with horizontal drilling has allowed the footprint of well pads to shrink by over 60% thus minimizing impact on the environment.  Similarly “wired” electronic drilling nodes combined with 3D seismic study has allowed for a huge increase in accuracy in drilling wells.  Fewer dry wells mean fewer wells and again a smaller environmental impact.  The trend for technological advancement in the oil industry will continually be driven by a quest for cheaper production costs and federal requirements for minimizing environmental impact.

Caribou

In the 30 years of oil and gas exploration the Arctic caribou have thrived.  Early concerns by native and state officials toward negative impact on the caribou caused by the constructing of the Trans-Alaska Pipeline and Prudhoe Bay led to many laws and regulations being enacted to ensure wildlife would not be harmed.  These regulations lead to yearly caribou studies and hiring of 24/7 Wildlife Monitors who would watch all wildlife around facilities and mitigate any impacts.  Three decades later the caribou numbers of the Central Arctic Caribou Herd which migrates directly across the Tran-Alaska Pipeline and through Prudhoe Bay has increased 5 fold from 5000 in the early 1970 to over 51,000 today.  Clearly the caribou have not been harmed, and clearly the industry and the wildlife can co-exist.  The Porcupine Caribou Herd is large than their cousins the Central Arctic Herd but both follow the same migration time lines and patterns.  The Porcupine herd though, despite having NO contact with the industry has declined and rebound from 179,000 animals to about 100,000 animals and returned to 180,000 today.  Their only contact with man is with Gwich’in Indian and native hunters who take about 6000 animals a year in the US and Canada.  Caribou thus clearly live on a “boom & bust” pattern affected by weather and forage both completely naturally.  Environmental mitigation efforts by the industry such as raised pipelines, no harassment policies, and 24/7 wildlife monitors have amounted to a healthy herd and ZERO caribou deaths caused by any industrial factor.  Caribou and oil, definitely can co-exist.

Alaskan Support

Throughout the 30 year history of this debate the democratically elected Alaska State Legislature has consistently passed resolution after resolution supporting the opening of the 10-02 Area to oil and gas exploration.  The Alaskan congressional members have also all supported development of the 10-02 for over 30 years.  Every Governor of the state has also supported 10-02 exploration.  Indeed 78% of all Alaskans support oil and gas exploration of ANWR.  The Alaska North Slope Borough which is the regional government for the entire Arctic along with the mayor and majority of villagers from Kaktovik, ANWR’s only residence, support development of the 10-02 Area.  And lastly the Alaska Federation of Natives, which is the governing body for all Alaskan Natives supports the opening of the 10-02

Historically the Congress and Administration of America have supported development.  The House of Representatives has voted 12 times to open the 10-02 to oil and gas development.  The question must be asked, how many more times does it take?  The trend and desire, without question, is there.  The US Senate has voted three times successfully to open the 10-02 Area to exploration.  The same question must be asked, how many more times must we vote?  Only once have both bodies passed the same bill in 1995.  So asking has Congress approved the issue?  The answer is yes, 15 times individually and once collectively.  Thus making the 10-02 the single most voted energy issue in US history. Many people ask why doesn’t it pass when clearly even today a majority of both bodies strongly support development?  The only reason the 10-02 question still remains is the procedural filibuster rule in the Senate allows opposition minority senators to talk a bill to death and disallow a vote which can only be overturned by 60 votes, a near political impossibility to achieve.

Given the political majority support, the majority local support in the state, the near unanimous Alaska governmental support and the arctic native support most Americans would tend to lean towards agreement that the 10-02 should be opened. In many polls most negative responders do indeed change their mind once informed of the basics facts of Alaskan and Congressional support.  It is very frustrating to all Alaskans that this has gone on so long.  Alaskans ask all Americans to listen to their cause and understand their reason in wanting to responsibly access the 10-02.  For all the reasons above and for the simple reason that Alaskans live in Alaska because they love Alaska and do not wish to despoil the very reason they live and endure life in the far north in the first place.  ANWR’s 10-02 can be accessed responsibly and the resources brought to use for our nation without destroying the place we call home.