If oil companies never produce oil from the Arctic National Wildlife Refuge Coastal Plain in Alaska, US consumers will still, volumetrically speaking, have the oil. That is, they will have the oil that they need and for which they can pay. If oil delivered under those terms doesn't come from Alaska, it will come from somewhere else, probably from outside the US.
Oil from ANWR would not make the US self-sufficient in energy. It would not insulate US consumers from external influence on the price of gasoline or heating oil. It would not keep weather from spiking demand or from hampering distribution from time to time.
If Congress allowed oil and gas leasing of the ANWR Coastal Plain and if the area lived up to expectation, the US would still import oil. And the prices of oil products would still fluctuate, sometimes cycling through distressing extremes.
That Congress has not allowed leasing of the ANWR Coastal Plain is nonetheless difficult to understand.
Repairing the lapse
Sen. Frank H. Murkowski (R-Alas.) is trying to repair the lapse. ANWR leasing is part of a package of energy policy initiatives he proposed in response to this year's surge in the prices of crude oil and refinery products. Murkowski's approach is gimmicky: targeting import-dependency levels, which are diminishingly important as long as markets are free. But his policy objectives are sound, chief among them the leasing of ANWR.
At the request of Murkowski, chairman of the Senate committee on energy and natural resources, the Energy Information Administration recently estimated ANWR production on the basis of a 1998 US Geological Survey range of estimates for technically recoverable Coastal Plain reserves: 95% probability for at least 5.7 billion bbl; 5% probability for at least 16 billion bbl; and a mean probability-or "expected value"-for 10.3 billion bbl. The expected-value volume is about half of current US reserves.
EIA made no assumptions about prices or technical advances. It asserted development rates of 250-800 million bbl/year to yield ranges of possible production rates. The results: peak ANWR production of as little as 650,000 million b/d to as high as 1.9 million b/d, with a range of 1-1.35 million b/d for the expected-value case.
In a market approaching 20 million b/d in size, such production represents supply worthy of consideration but not likely to make the US significantly less dependent on foreign oil by the time it comes on stream. There are, in any case, better reasons for Congress to lease ANWR than the few meaningless degrees by which the prospective production might change the slope of the import-dependency curve. And they are reasons that serve production anywhere in the US just as well.
One of those reasons is mostly symbolic but still important. Approval of leasing would signal an end to congressional complicity in the environmentalist myth that leasing, drilling, and production represent grave threats to natural values. Oil and gas operators have demonstrated their abilities to work in the Arctic and other sensitive areas without messing them up-and their activities become even less intrusive as technology advances. The US Department of Energy has acknowledged the enormous improvement that the drilling and producing industries have made in the environmental safety of their operations everywhere. It's time for Congress to get and act on the message-and not just in ANWR.
US production
The other reason to approve ANWR leasing is that oil not produced there will be produced somewhere. US demand will be satisfied. The only questions are at what levels of volume and price. ANWR might have some effect on the balance, but not much. It is reasonable to say, however, that 1 million b/d of crude oil not produced in Alaska-to be conservative about it-represents 1 million b/d of crude produced outside the US to satisfy US demand.
That's 1 million b/d times the price of crude that makes some other country's economy grow. It's 1 million b/d times the price of crude from which governments other than those of Alaska and the US collect taxes. It's 1 million b/d times the price of crude that neither multiplies through support businesses nor creates jobs for Americans.
For the US, US production is better than the other kind. And the effects on import dependency are the smallest part of the reason.
