Alternative Energy, Energy Independence and Global Warming Reduction

So, Should We Drill Offshore? Good Idea or Bad?

How much would it reduce imports? Would gasoline prices drop? What about the enviroment? We take a thorough look at the tangle of issues and attempt to sort out the factual from the fabulous. See what conclusions you draw from this story.

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the economics have changed
Time for Another Look at ANWR?

Although Presidential aspirant John McCain ruled it out in his speech two plus weeks ago, a chorus immediately arose once again to drill in the Arctic National Wildlife Refuge (ANWR), with President Bush leading the song.
     Columnist George Will laments that "One million barrels is what might today be flowing from ANWR if in 1995 President Clinton had not vetoed legislation to permit drilling there". This does not square with the economics of the time. At the then $16 nominal price of a barrel of oil, would anyone have drilled?
     Those economics gave ANWR critics an argument. Oil that could be recovered economically at such prices would provide only 3% of U.S. needs. ANWR has incorrectly been touted as a panacea, which it is not, while to others it is symbolic of excessive environmental concerns. Opponents to drilling have held that it is not worth infringing on a wildlife reserve blessedly free of humanity's contamination for so little gain.
Do the Dollars Now Make Sense?     The economics are as follows. A 1998 survey by the U.S. Geological Survey determined that at $24 a barrel (the price had risen since the 1995 veto), there was a 95% chance that 2 billion barrels or more could be economically recovered, which works out to something less than 500,000 barrels a day, and that for only 10 years. That equates to the 3% that has been regularly bandied about.
     But the economics change significantly at today's prices. same survey found a 95% chance that 4.3 billion barrels or more are technically recoverable if price is not a factor, and the then unimaginable $144 a barrel now would cover any tab. The percentage of daily U.S. needs that ANWR could provide now jumps accordingly. It is this upward revision that President Bush probably assumes when he speaks of 1 million barrels a day from ANWR about 5% of the nation's current needs.
     Proponents point to greatly improved exploration technique. Better seismic technology and high resolution images of the geology would pinpoint oil-bearing structures, serving to limit a sprawl of dry holes. More important still is directional drilling, which enables a rig to tunnel horizontally, snaking drill pipe underground for considerable distances (a rig in China holds the record of 7 miles). This capability sharply reduces a drilling platform's footprint on the land.
     Add to that the claims of greater safety and the case for drilling in ANWR has undeniably improved.
     Those opposed distrust the high pressure sales pitch. It will be only "one-sixth the size of Washington's Dulles Airport", one commentator assures us; 1/7th the size of Manhattan Island says another. Opponents say this overlook the sprawl of infrastructure: living quarters, port facilities, airstrips, etc. The refuge embraces 19 million acres. Congress was left to decide the fate of the so-called 1002 area, which embraces 1.5 to 1.9 million acres. That is the area under discussion. The idea that the "footprint" would involve no more than 2,000 acres of this area was lofted by Gale Norton, Bush's first Interior Secretary. It refers to the actual "surface acreage covered by production and support facilities." But this is deceptively defined; if a pipeline snakes across the landscape on a series of posts, only the land occupied by the posts is covered. And roads — which will crisscross the area because the oil is spread out in many different pools, and not on one place — are not counted at all. In short, to say this will affect on 2,000 acres is like counting only the greens on a golf course. Any serious operation up there will create a significant spiderweb of infrastructure, as well as the bisecting roads and pipelines to hook into Prudhoe Bay's delivery system less than 100 miles to the west.
     So, acknowledging that drilling in ANWR will have a greater impact than advocates admit, the question is whether it is nonetheless worth it, now that, at today's oil prices, it would provide a larger perecentage of U.S. needs.
     

Stephen Wilson and Robert Semple Jr.      www.planetwatch.org