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Drilling in the ANWR By: Ryan O’Neill10/16/02. Oil in Perspective In 2001, the U.S. consumption of oil was at a rate of 19 million barrels per day, which.

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Presentation on theme: "Drilling in the ANWR By: Ryan O’Neill10/16/02. Oil in Perspective In 2001, the U.S. consumption of oil was at a rate of 19 million barrels per day, which."— Presentation transcript:

1 Drilling in the ANWR By: Ryan O’Neill10/16/02

2 Oil in Perspective In 2001, the U.S. consumption of oil was at a rate of 19 million barrels per day, which annually adds up to over 7 billion barrels This 7 billion barrel annual consumption rate makes up over 25% of the yearly world consumption rate of 24 barrels, despite the domestic oil reserves of the U.S. accounting for only 3% of the world’s total oil reserves. With such a lack of domestic production, the U.S. is forced to import over half of all the oil it consumes, with half of these imports coming from OPEC countries In midsummer 2001, with oil prices at $24 per barrel, the U.S. was spending $210 million per day on imported oil, which would add to nearly $80 billion per year if the price per barrel consistently stayed at $24 per barrel This reliance on imported oil makes up 1/3 of the annual U.S. trade deficit

3 The U.S. has exploited its oil reserves longer than any other nation, resulting in the cost of producing a barrel of oil in the existing U.S. reserves being more than anywhere else Domestic oil production is expected to fall dramatically over the next decade as existing fields are exhausted and relatively few new reserves are discovered This puts the U.S. in a position to have an even larger reliance on imported oil, furthering the already high security risks which are related to oil dependence One near-sighted proposal to help reduce our foreign dependence on oil has been to drill for oil in the Arctic National Wildlife Refuge, located on the western half of the oil rich North Slope of Alaska

4 History of Drilling on the North Slope Interest in the oil resources of northern Alaska began with reports in the early 1900s of surface oil seeps along the arctic coast east of Point Barrow During World War II, the entire North Slope of Alaska million acres - was withdrawn from entry under the public land laws and thus held for exclusive use by the U.S. government for military purposes. Extensive government-sponsored exploration for oil and gas occurred in the NPR-A during the s In the 1950s, post-war construction and accelerating resource development across Alaska raised concerns about the potential loss of this region's special natural values In , government scientists conducted a comprehensive survey of potential conservation areas in Alaska. Their report, "The Last Great Wilderness," identified the undisturbed northeast corner of Alaska as the best opportunity for protection, which eventually led to the establishment of ANWR

5 In 1923, the 23-million acre Naval Petroleum Reserve No. 4 was established in northwestern Alaska to secure a supply of oil for future national security needs. That area was later renamed the National Petroleum Reserve-Alaska (NPR-A) In 1960, 8.9 million acres of coastal plain and mountains of northeast Alaska were designated as the Arctic National Wildlife Range to protect its "unique wildlife, wilderness and recreation values In 1960, 8.9 million acres of coastal plain and mountains of northeast Alaska were designated as the Arctic National Wildlife Range to protect its "unique wildlife, wilderness and recreation values”

6 The largest oil field in North America was discovered on state land in the Prudhoe Bay area in 1968, and additional petroleum discoveries have more recently been made on Alaska's North Slope For 2-1/2 decades, Alaska oil has supplied 20% of America’s domestic production, a $260 billion offset to the annual trade deficit Oil is transported from the North Slope by the 800-mile Trans-Alaska Pipeline System, from Prudhoe Bay to Valdez in south-central Alaska, where it is then transferred to oil tankers

7 Emergence of the ANWR In 1980, the Alaska National Interest Lands Conservation Act (ANILCA) was passed which doubled the size of ANWR and designated most of the original range as wilderness Part of the range that was not designated as protected wilderness is known as the “1002 Area,” which would be either designated as Wilderness or be permitted to be used for oil development based on studies conducted The studies showed that oil development in the 1002 area would have major effects on habitats and species, and legislative approval for oil exploration has not been approved since

8 Potential Usage for ANWR United States Geological Survey released a report regarding the oil and gas potential for the 1002 area of the ANWR Estimated between 11.6 and 31.5 billion barrels of oil within the 1002 area (95% and 5% probabilities) Mean= 20.7 (These numbers didn’t take into consideration the recoverability of the resources) Estimated between 4.3 and 11.8 billion barrels of technically recoverable oil reserves (Again 95% and 5% probabilities) Mean=7.7 (These numbers were estimated using the current state of technology of oil extraction, so as techniques get more advanced, mean could increase)

9 Assuming a $22 per barrel price, annual Alaska revenues from ANWR oil production could peak at over $800 million during heavy extraction after taking into account a 50% federal royalty (Assuming 10 billion barrels were recovered) Over 25,000 jobs would be created in Alaska alone during the peak of extraction (17 yrs after the first barrel is pumped) 74% of the technically recoverable oil lies on federally owned 1002 land (instead of state and private lands) Use of field presumed to be 50 yrs based on the 7.7 billion mean, however many other sources estimate only 3 billion barrels of technically extractable oil from 1002 Would bring large advances in technology along the Northern Slope along with improvements in infrastructure

10 Potential Downsides to ANWR Drilling First barrel of oil wouldn’t be produced for most likely a decade, thus not doing anything about short-term reliance on imported oil Even if the first barrel could be produced tomorrow, pumping out more oil is not the answer to ridding of oil dependence ANWR is the last corner of North America untouched by human activity, with the most pristine environment around

11 On Wildlife Drilling could have adverse effects on the abundant caribou, muskoxen, and polar bear populations reduction in the amount and quality of preferred forage available restricted access to important coastal habitats exposure to higher predation alteration of ancient migratory patterns, the effects on nature which we can not predict the current rate of reportable spills on Alaska’s North Slope is about one per every 18 hours, severely endangering wildlife

12 Whether the oil technically available in the Arctic National Wildlife Refuge is 3 billion barrels or 12 billion barrels, the drilling will do practically nothing to alleviate U.S. dependence on oil imports, in both the current and long terms Has the potential to severely damage a pristine environmental habitats along with wildlife There is a much better means to rid ourselves of import dependency……….

13 Efficiency, Efficiency (Short Term) Requiring replacement tires on cars and light trucks that roll as smoothly as original equipment tires – 100 million barrels/yr Ensuring optimal tire pressure – 60 million barrels/yr Commuting cars carry just ONE more person ONCE a week – 60 million barrels/yr Ensuring correct fuel octane is used – 24 million barrels/yr Stopping the U.S.’s part in the annual dumping of over 700 million gallons of oil into the ocean These simple efficiency measures would completely displace Iraqi oil imports

14 Efficiency (Long Term) Energy Conservation!! More fuel efficient cars- Congress should raise fuel economy standards, starting with closing the sport utility vehicle loophole by holding SUVs and minivans to the same fuel economy standards as cars Congress should then boost fuel economy standards for the combined car and light truck fleet in regular steps every few years A 40-mpg standard would save more than 50 billion barrels over the next 50 years, more than 15 times the likely yield of economically recoverable oil from the Arctic Refuge Raising fuel economy standards to 40 mpg would save car owners $3,000 to $5,000 at the gas pump over the life of their cars, more than offsetting increased vehicle costs

15 Increasing the fuel efficiency of cars has proven to be the key in reducing not only the dependence on imported oil, but oil in general 1975-CAFE standards mandated pushed cars from 13 mpg to 27.5 mpg in 1986, saving 5 million barrels of oil per day During this period, overall oil imports dropped by 42%, with an 87% decrease in imports from the Persian Gulf, while GDP rose 27% CAFE standards were rolled back by President Reagan, which doubled the amount of imports from the Persian Gulf If the U.S. continued enforcing the CAFE standards of , the U.S. would no longer have a need for Persian Gulf oil

16 Other means Faster deployment of hybrid and fuel cell technologies Increasing use of insulation within homes to reduce thermostat usage promote public transportation and "smart growth" development patterns that reduce driving, cut gasoline use, and offer a better quality of life But the ultimate answer to reducing U.S. dependence on foreign oil, along with other societal problems such as poverty, hunger, crime, lack of quality education, lack of sleep, sexual infertility and every other problem is the….

17 GAS TAX!

18 Conclusion Drilling in ANWR would increase reserves by an almost insignificant amount The proposal is extremely near-sighted, and does nothing to decrease U.S. dependence on oil, including imported The amount of oil that is technically recoverable isn’t worth the risk that such a pristine habitat and the wildlife within it are put at from oil drilling Oil is not going to be around forever, sooner or later conservation and higher efficiency will have to be undertaken in response to reduced supply, and measures to increase efficiency in all aspects of energy consumption have been long overdue

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