|Gasoline turmoil spurs new ANWR legislation|
Washington – with the Dept. of Energy’s Energy Information Administration (EIA) releasing reports this week that the average US household gasoline bill will increase by $700 in 2011 to $3,234, many in Congress are scrambling to deal with the surge. The political unrest in Libya has been primarily blamed for the rise in world oil prices which have sent EIA summer gasoline price estimates up to $3.71 from a previous 2010 levels of $2.73.
The cost rise and timing mirror the situation the nation experienced in 2008 when gasoline prices skyrocketed by a mid summer high of $141 per barrel oil. Currently oil prices range from $105-$117 per barrel. As in 2008 a flurry of bills to open the 10-02 Area of ANWR have been drafted to try and prevent future extreme price shocks. Senator Murkowski of Alaska introduced Senate bills S. 351 and S.352 to tap the 10-02’s vast estimated oil reserves. The USGS estimates ANWR’s 10-02 to contain the largest single conventional oil reserve in the nation at a mean average of 10.4 billion barrels. S.351 known as the No Surface Occupancy Bill would allow the industry to use sideways directional drilling techniques to explore for oil from outside the refuge borders. With current capability rigs can only drill horizontally 6-9 miles thus leaving over 95% of the 10-02 inaccessible if explored using this method. Murkowski submitted similar legislation in 2009 acknowledging the extreme limitation of the technology, but stating some exploration was better than none. S. 352, The American Energy Independence and Security Act of 2011, also submitted by Sen. Murkowski allows for the complete exploration of the10-02 area with a minimum lease parcel limit of 200,000 acres and a maximum surface occupancy of 2000 acres (the 10-02 is 1.5million acres in size). Tax revenues from production would be used for national alternative energy development and a small amount going towards a local impact fund for the native communities and land holders. ANWR’s 10-02 contains 110,000 acres of private property owned by Alaskan Natives mostly in the village of Kaktovik, ANWR’s only settlement. Both bills have been referred to the Senate Energy and Natural Resources Committee for which Murkowski is Ranking member.
In the House Representative Devin Nunes of California (21st) introduced H.R. 909 “All of the Above” Energy Solution. This bill follows the trend of most legislation supporting ANWR in that it incorporates the issue within a broader national energy plan including promotion of oil from the Outer Continental Shelf (OCS), oil shale, coal to liquid, and nuclear power. So far Representative Nunes’ bill has attracted 55 cosponsors including the House Budget Committee Chairman Paul Ryan.
The irony and problem with this sort of legislative reaction and lack of a long term energy plan is that oil and gas exploration takes many years sometimes decades to achieve results. Between the highly unreliable and politically and legally challenged federal and state permitting processes, to the actual seismic work, the building of infrastructure, and the exploratory well drilling, oil and gas exploration is an long term endeavor not suited towards a result of next week price reductions at the pump. A good example of this are the pending oil exploration permits for lease sales in the Alaskan Chuk-chi and Beaufort Seas. Despite that federal lease sales already have taken place and permit applications applied for no permits have been granted in now nearly 5 years in the Chuk-Chi case. Similarly because of Dept. of Interior permit delays last year and this Shell announced it could not conduct any work in the Beaufort in 2010 nor 2011. Oil and gas exploration and production is long term and its benefit is also spread out over the long term.
One controversial suggestion of lawmakers to deal with the gasoline price spike has been to ask the President to release oil from the Strategic Petroleum Reserve. The Reserve was created after the 1973 OPEC oil crises to lessen the immediate impact of an oil crisis. The idea being if a cut off of oil was experienced the reserve would allow the nation to continue operating for a short while whilst a political solution was achieved. The problem is that the Reserve was not meant to be used in such a price regulating fashion and the effect of doing so is extremely short term and unpredictable. A severe price spike might barely be affected by a release of oil from the Reserve or, depending on volumes, its effect could be only days or even hours. Which ever argument one takes the Strategic Petroleum Reserve is a short term quasi- fix at best and does not address the main concern which a secure supply of energy.
The House Natural Resources Committee under Chairman Doc Hastings of Washington will hold 4 hearings on oil and gasoline prices this month. Two will be on rising gasoline prices and the effect, and two on the permitting process in the Gulf of Mexico. About 1/3rd of America’s oil comes from Gulf.
Links to important ANWR and Arctic oil related legislation and comment are below:
Senator Murkowski’s statement on tapping into the Strategic Petroleum Reserve vs. ANWR and other oil. http://energy.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=7593a2f3-1cd4-40e5-b8c5-8fdfecda3c2a&Month=3&Year=2011
Senator Murkowski’s legislation on ANWR S.351 and S.352 can be found here:
Chairman Doc Hastings talks on oil and gas prices and Trans-Alaska Pipeline CSPAN Video: http://www.c-spanvideo.org/program/298419-5
Representative Nunes press statement on H.R.909 http://nunes.house.gov/index.cfm?FuseAction=PressOffice.PressReleases&ContentRecord_id=7cbffe7f-19b9-b4b1-12cf-a42fecc5649c&Region_id=&Issue_id=
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