Why then do we spend hundreds of millions of dollars a day importing oil we already have?  The answer lies in American national energy policy, which has, over the past 40 years, moved to lock up oil bearing land and thus exclude the production of fossil fuels from economy.  This trend seems quite contrary to the use of oil and gas by Americans and indeed nations worldwide which has consistently shown a gradual increase in consumption and domestic production.  This trend to not consume what one has, has directly resulted in increased imports from abroad to meet constantly growing demand.  Currently America imports roughly 60% of its oil from outside its boarders costing $650 million per day (@$50pb).

Alaska, and in particular ANWR, is a good example of America’s habit of locking up its own resources up whilst buying more from abroad.  Along the Coastal Plain of ANWR, known as the 10-02 Area lies what the USGS estimates is probably the largest concentration of onshore conventional oil reserves in North America.  This oil is easily accessible and very close (50 miles east along the coastal plain) from America’s largest existing oil field, Prudhoe Bay.  Satellite oil fields and feeder pipelines, indeed, already exist within 5 mile of ANWR’s border.  Being on shore, development in ANWR’s 10-02 Area is technically safer to produce than developing offshore oil fields such as those being explored in the Beaufort Sea or Chuck-chi Sea.  In the argument to supply oil and gas to the nation, it would be logical thus to develop the safest and most promising and closest fields first.  Certainly the 10-02 Area fits that logic exactly and thus is the reason so many Alaskans see issue as the best next step.   

All output of arctic oil is regulated by the capacity of the Trans-Alaska Pipeline System or TAPS.  TAPS, which was opened in 1977 is over 4’ in diameter and stretches 800 miles from Prudhoe Bay in the Arctic to Valdez in the Gulf of Alaska where oil tankers take on oil and sail to refineries in Washington, California and Hawaii. TAPS has a maximum daily capacity of 2.1 million barrels a day, which means in a year it can transport a maximum 766,500,000 barrels of oil.  To date TAPS has transported over 17.7 billion barrels of oil with over 31 years of service.

The limitation of TAPS throughput however controls all possibility of production levels in the Arctic.  Even at is height in the 1990s the Prudhoe Bay oil field and its satellite fields along the coast could not send more than 2.1 million barrels down the pipeline a day, thus a production bottleneck exists.  This 2.1 million barrel throughput figure is the basis for all estimates on field production life in the Arctic.  At full capacity production the “producing life” of all fields in the Arctic is limited and thus extended through time by the maximum capacity of TAPS.  Arguments to say there are “X” months worth of oil in any given field often quoted in the ANWR debate completely ignore the reality of the logistical bottleneck of TAPS coupled with the added input of production from other Arctic oil fields which share TAPS’ capacity.

The US Geological Survey (USGS) estimates that ANWR’s 10-02 could produce up to 1.5 million barrels day at full capacity after roughly a 10 year ramp-up of development.  This 1.5 million bpd level would have to be mixed with other oil produced in the Arctic and sent down the TAPS, leaving a maximum estimated 600,000 barrel gap in TAPS capacity to be filled by other arctic oil produced from other fields.  All fields produce oil over time in what amounts to a bell shaped production curve.  Starting out with low production figures in the initial years, followed by a peak maximum production and then gradually declining as resources are used up.  Using the USGS 10-02 reserve estimates² coupled with the maximum throughput of TAPS one could estimate a rough figure of 30-50 year lifespan depending on the behavior of the production bell curve and also output for other fields competing for space within TAPS.  The reality is that this is merely an estimate as no one knows how much oil is in ANWR’s 10-02 nor how difficult it would be to get out.  Prudhoe Bay to the west is a good example of the uncertainty with estimates as where only 9 billion barrels of oil were originally estimated there with a full field life of only a little more than two decades.  To date Prudhoe Bay has produced double that estimate and will continue producing to easily make its 40^th birthday. 

¹http://tonto.eia.doe.gov/dnav/pet/pet_pub_analysis_crd.asp

² Ibid 1

³http://energy.usgs.gov/alaska/anwr.html