Shining the Light of Wisdom and Truth

The ANWR Debate
by Raymond J. Keating
November 9, 2005

Listening to various environmental activists, one might get the impression that allowing oil drilling in the Arctic National Wildlife Refuge (ANWR) in Alaska would do nothing to meet our nation’s growing energy needs, while at the same time devastate the environment. Such nonsense, though, has nothing to do with economic or environmental reality.

Let’s consider a statement issued by a group called Earthjustice, located in Oakland, California, in reaction to a U.S. Senate vote last week in favor of a budget bill that also authorized federal oil and gas leasing in ANWR. Sarah Wilhoite, a legislative associate for Earthjustice ominously warned: “Sacrificing the Arctic refuge is a bad deal for America. If Congress decides to allow Arctic drilling, it would only reduce gas prices by a penny – and not until the year 2025. Meanwhile, we’d still be importing the vast majority of our oil, and we’d have an industrial wasteland where a wildlife refuge used to be.”

My goodness, who could ever be in favor of saving a penny at the gas pump at the cost turning a refuge into a wasteland? Of course, the real story turns out to be quite a bit different.

Let’s take the environmental evidence first. As reported by the Senate Committee on Energy and Natural Resources, ANWR covers 19 million acres, or about the size of South Carolina. Oil development would focus on the coastal plain’s 1.5 million acres. But with vast improvements in technology, the actual surface area needed to tap into and produce oil would be less than 2,000 acres. That translates into 0.01 percent of ANWR acreage. Hmm, wasteland?

The committee also highlights a National Research Council study, completed in 2003, that found that energy production in Alaska has had no serious effects on wildlife. Caribou herds, for example, have grown dramatically.

So, the environmental devastation predicted by opponents of ANWR simply has no basis in fact.

But what about our energy supplies? To insinuate that supporters of drilling in ANWR claim that this will wipe out any reliance on foreign sources of oil is simply disingenuous. Current domestic oil production does not meet current demands, nor will the U.S. meet future domestic demands only through domestic supplies.

At the same time, though, without expanded exploration and development at home, our reliance on foreign supplies will only grow, and at a quickening pace. For good measure, global energy demands will be growing as well, especially from the developing world.

ANWR clearly would make a valuable contribution to meeting energy demands. U.S. Senator Ted Stevens, a Republican from Alaska, was quoted by the Washington Post stating: “The coastal plain is our country’s single greatest prospect for future oil production.” He noted that it holds between 5.7 billion and 16 billion barrels of oil, and will produce between 876,000 and 1.6 million barrels per day.

However, that is a conservative estimate based on 1990s technology. As technology continues to advance, more oil can be tapped and developed. For example, the American Petroleum Institute has reported that it was estimated that about 40 percent of the oil from Prudhoe Bay would be recoverable, but it is now expected to top 65 percent.

Regarding Alaska’s coastal plain, the institute adds: “The entire area is estimated to contain oil that would be equivalent to more than 30 years of imports from Saudi Arabia today. This is based on today`s technology, of course. With new technology, the share should be higher. And there should be significant amounts of natural gas as well.”

Of course, no one knows what the price of oil will be twenty years from now, and what the exact impact of bringing ANWR online would be. One view says a penny in savings resulting from ANWR, while Senator Lisa Murkowski, the other senator from Alaska, notes that at higher prices, the savings could be 10-15 cents per gallon. Take your pick.

But the fundamental point cannot be denied. Greater domestic oil exploration and production will help to hold down prices, while increasing reliability.

Rising global energy demands, natural disasters, such as the hurricanes in the Gulf of Mexico, and war and instability in the Middle East make clear that U.S. lawmakers should be doing all they can to reduce domestic barriers to energy production, including opening up production in ANWR. For good measure, advancements in technologies mean that energy exploration and development do not have to threaten the environment.

After all, why is it that federal elected officials from Alaska favor oil production from ANWR? Are we really supposed to believe that these representatives of the people of Alaska favor transforming ANWR from a wildlife refuge into an industrial wasteland? Oh, please.

It is obvious that meeting our energy needs and maintaining a clean environment are not at odds. It’s not one or the other. Well, that is, it’s obvious apparently to all but some of the most extreme environmentalists.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. Article reprinted with permission.