MAKING THE CASE FOR ANWR DEVELOPMENT
Too Much Imported Oil: Bad for the Economy
As domestic oil production continued its decline, the U.S. imported 58% of its petroleum needs in 2004. These oil imports cost more than $150 billion and robbed tens of thousands of steady, high-paying jobs from American workers.
More than 20,000 foreign supertankers (most single-hulled) offloaded oil at east, west and gulf coast refineries last year; they carry from 700,000 to 1.2 million barrels a day from Iraq alone. Foreign oil is produced and shipped under less strict environmental standards than domestic oil. Alaska's oil fields are the cleanest in the world, second to none.
Through shortsighted actions, Congress and federal agencies have banned oil activity from more than 300 million acres of federal land onshore and more than 460 million acres offshore in the past 20 years. An estimated 67% of oil reserves and 40% of natural gas reserves are on federal lands in America's western states.
Eighty-eight percent of the energy for America's transportation, industry, government and residential needs comes from oil, gas and coal. No combination of conservation, technology or alternatives can come close to replacing these fossil fuels. It will take years for research, testing, permitting, construction, and distribution systems for replacement alternatives to be realized. When alternative energy sources become practical and economical, Americans will use them. Until then, fossil fuels must be relied upon.
Today's domestic oil production comes from more than 150,000 wells scattered throughout the country; they average 15 barrels a day. There have been no new major discoveries in the 48 contiguous states in thirty years. As the U.S. population increases, the nation must either produce more or import more. Alaska's Arctic is the most promising area for the largest supply with the smallest physical impact.
The U.S. economy benefits from domestic production when new construction, service, manufacturing, and engineering jobs are created. These jobs occur in all 50 states. A national impact study by Wharton Econometrics estimates total employment at full production in ANWR to be 735,000 jobs. Federal revenues would be enhanced by billions of dollars from bonus bids, lease rentals, royalties and taxes.
Alaska's Experience as an Energy Supplier
Discovery of the gigantic Prudhoe Bay oilfield was announced in July 1968, the largest deposit ever found in North America. (Environmentalists called it a "few months' supply.") Nine years, 7.7 billion dollars, and 1,347 government permits later, Americans cheered as oil began flowing through the 800-mile Trans-Alaska Pipeline System.
Since July 1977, the pipeline has carried more than 13 billion barrels of oil from Alaska's North Slope. During that time Alaska oil has supplied 20% of domestic production, amounting to nearly a $300 billion offset to the national trade deficit. Natural gas, produced with the oil, continues to be reinjected pending studies to determine feasibility of a pipeline to U.S. markets. Prudhoe Bay gas reserves are 30.9 trillion cubic feet.
Today the Alaska oil pipeline carries less than half its capacity; thus the search continues for new supply to keep it operating. (Without it, the entire system must eventually be decommissioned and removed.) The coastal plain of ANWR, 60 miles east of Prudhoe Bay and with similar geology, is America's most prospective area for another giant oil field.
Studies of the ANWR coastal plain indicate it may contain between 6 and 16 billion barrels of recoverable oil (between 11.6 and 31.5 billion barrels in-place). With enhanced recovery technology, ANWR oil could provide an additional 30 to 50 years of reliable supply. Natural gas, produced with the oil, could be reinjected or added to a new gas pipeline originating in Prudhoe Bay.
Petroleum development at Prudhoe Bay has not negatively affected wildlife. For instance, the Central Arctic caribou herd is at home with pipeline facilities and has grown from 3,000 to as high as 27,100 in the last 20 years. Drilling activity in ANWR would be limited to winter months when wildlife does not frequent the coastal plain.
Constantly improving technology has greatly reduced the footprint of Arctic oil development. If Prudhoe Bay were built today, facility designs show the footprint would be 64% smaller.