[Bears walk the tightrope
on the Trans-Alaska Pipeline. Alaska Dept. of Natural Resources.]
The Bush administration has put opening the Arctic National Wildlife Refuge
(ANWR) in the spotlight of its energy policy agenda. The United States
imports too much oil and produces too little, say many administration officials.
Prices are skyrocketing and something needs to be done, say others.
Statistics on the amount of recoverable oil that exists beneath the coastal
plain of ANWR are used selectively to support partisan viewpoints on both
sides of the issue. But the methods behind the data are not always well
explained and those that are able to dig through the details thus far are
often confused when economic considerations put a different spin on the
energy “crisis.” The truth is, not many Americans understand what’s going
on in Alaska.
Just one six-foot piece of pipe — the top of a three-mile well shaft
— stands exposed in the 19-million-acre preserve. There is only one well,
and it was drilled in 1985. Direct scientific data on oil reserves are
not available because it is illegal to drill in ANWR. The only way to obtain
direct evidence of the presence of oil is by drilling into the ground to
find it. Even seismic profiling permits require an act of Congress, which
has not been forthcoming.
Today’s estimates are derived from 1,400 miles of seismic reflection
data that the U.S. Geological Survey (USGS) collected between 1984 and
1985. These numbers were re-examined and analyzed, taking new drilling
technologies into account, to derive oil and gas resource estimates for
the USGS’s 1998 study. The numbers are broken down again into technically
recoverable resources — the amount recoverable if cost is not a consideration
— and economically recoverable oil — what is economically sound to recover,
given current technologies and a stable price around $24 per barrel.
“When people talk about how much [oil] might be there, it’s an undiscovered
resource estimate,” says Mark Myers of Alaska’s Department of Natural Resources.
“It’s a subjective call based on data available to interpret.”
The USGS’s 1998 assessment of oil and gas resources in ANWR estimates
with 95 percent confidence that 5.7 billion barrels are technically recoverable.
On the other end of the probability scale, the USGS estimates there is
a 5 percent chance that 16.0 billion barrels are technically recoverable.
The 50-50 estimate is 10.3 billion barrels. Most of the economically recoverable
oil lies to the west of the Marsh Anticline in the undeformed region closest
to the existing network of roads and pipelines that support the oil rigs
of the developed North Slope. That region is thought to contain about 2.6
billion barrels of economically recoverable oil. The minimum size of a
commercially developable field is approximately 512 million barrels of
recoverable oil, according to the USGS.
For comparison, consider Prudhoe Bay, the center of oil activity on
the North Slope. Since production began in 1977, Alaskan oil has provided
20 to 25 percent of the country’s total supply. At the time, it was estimated
that 9 billion barrels would be recovered. Today it looks like more than
12 billion barrels will be recovered before the wells are shut down, says
Naresh Kumar of Growth Oil and Gas Company and formerly North Slope Exploration
Manager for ARCO Alaska.
Scientists are not certain how much oil is actually recoverable in
ANWR. They can only proffer their most educated guesses, Myers says.
If granted permission to drill in ANWR, oil companies will start by
setting up exploration wells. Even if the refuge were opened tomorrow,
it would still be seven years at the least before a single barrel of oil
What’s more, the definition of economically recoverable is in a constant
state of flux as markets soar and plummet and energy usage in terms of
fuel source and overall consumption changes over time.
Opponents of the president’s proposal point to that variability in
arguing that exploration in ANWR is not worth the environmental risk to
a pristine wilderness. A joint press statement issued Feb. 22 from Senate
Minority Leader Tom Daschle (D-S.D.) and Sen. Byron Dorgan (D-N.D.), the
chairman of the Democratic Policy Committee, cites statistics on the role
that ANWR oil will play in the world market. The U.S. holds only 3 percent
of the world’s oil, and ANWR is a mere fraction of that, they say. “The
price of oil is a world price and is largely determined by the international
market. For example, last year’s gasoline price spikes were the result
of a decision by OPEC producers to cut production when demand dropped following
the Asian economic crisis, not because of changes in domestic oil production.”
There is pressure to drill for reasons other than the country’s oil
needs. The Trans-Alaska Pipeline that delivers oil from Prudhoe Bay to
the Pacific Northwest is flowing at half its capacity. At its peak, Prudhoe
Bay produced 2 million barrels of oil per day. Today it produces only 800,000
barrels of oil. Combined with the rest of the North Slope oil, 1 million
barrels of oil flow down the Trans-Alaska Pipeline System.
A certain number of barrels of oil per day have to flow though the
pipeline to keep it operational. If it runs dry, the laws under which it
was constructed mandate that it be torn down and the area be returned to
its natural state. Oil companies — namely big Alaskan players including
BP, Phillips Alaska and ExxonMobil — stand to lose money if that happens.
They are looking for ways to keep the line up and running.
There are two options: ANWR to the east and the National Petroleum
Reserve Alaska to the west. Although a lease sale is planned for the National
Petroleum Reserve in 2003, industry analysts do not expect production levels
to sustain pipeline flow in the long term and keeping up the pressure to