Posted: 04/12/2004 | Author: H. Sterling Burnett
ANWR and Our Nation's Energy Future
Rising prices at the gas pump are once again focusing attention on America’s dependence on foreign oil. Congressional Democrats are blaming the President for higher fuel prices. At the same time, in the midst of the U.S.’s ongoing war on terror, Democrats are demanding that President Bush stop stocking our nation’s strategic petroleum reserve—you know, the oil that the nation is supposed to set aside for use if a war or other national emergency like another Arab oil embargo or terrorists attack disrupts oil imports—and instead, release some of the oil currently in the reserve in order to decrease present fuel prices. Their blame of the President and their proposed solutions would be laughable if the issues involved were not so serious and the politicians making them weren’t acting so hypocritically.
What makes it hypocritical? Many of the same people that are now complaining about our dependence on foreign oil consistently oppose opening Alaskan National Wildlife Refuge (ANWR) to production. This is not some radical idea. The 1980 law that doubled the size of ANWR to 19 million acres explicitly called for Congress to develop a process through which exploration and production could be conducted on the 2000 acre Coastal Plain. Yet, across the past 24 years, anti-development forces in Congress have ignored America’s energy needs and, through the use of filibusters, prevented oil and gas development. This inaction is irresponsible.
Opening ANWR to oil and gas development will not make the U.S. energy independent. It will, however, reduce U.S. dependence on foreign oil, shrink the country’s trade deficit and, at the same time, provide jobs, state and local tax revenue, and royalty payments to the federal government. In case it’s lost on anyone, during this period of economic uncertainty, more jobs, more local, state and federal tax revenues are good.
A U.S. Energy Information Agency report released in early March 2004 stated that at peak production, ANWR would yield 876,000 barrels per day. In the past, the Democrats who have blocked the development of ANWR have claimed that ANWR’s oil production would have, at best a negligible impact on fuel prices. However, 876,000 barrels per day is equal to 36,792,000 gallons of gasoline, jet and diesel fuel, heating oil and other products, and is more than 8 1/2 times the amount—100,000 barrels per day—the same politicians are demanding that the President release from the Strategic Petroleum Reserve.
The truth is, because America’s energy needs, along with the economy, are expected to increase in the future, whether or not ANWR is developed, the U.S.’s dependence on foreign oil supplies will grow. The question is, by how much? According to the EIA report, absent ANWR, the U.S. will import roughly 70 percent of the oil it needs by 2025; whereas, if ANWR is developed, it would drop to about 66 percent. While this difference may not sound like a lot, it amounts to $12 billion less per year that the U.S. would ship overseas. If other domestic oil fields and public lands that are currently off limits to production were brought on line, our dependence on foreign oil would shrink further. When declining domestic production elsewhere is taken into account, ANWR would supply as much as 20 percent of the entire annual production in the U.S.
To put this in perspective, the EIA estimates that ANWR contains between six and 16 billion barrels of oil under its frozen expanse. If only six billion barrels of oil were recovered in ANWR, in a time of emergency, ANWR could deliver enough oil to the U.S. to free us from dependence on Iraqi oil for 50 years or from Saudi Arabia for 30 years.
Opening ANWR is not a short-term fix for current gas prices since it would take ten years to recover any oil found there. However, if we had made the decision to drill in 1980 or even in 1990 when it was last seriously considered, we would be less dependent today and fuel prices would be lower. Will we be rehashing these same arguments again ten years from now when another crisis in the Middle East, or Russia, or the Caspian Sea cost American lives and disrupts energy supplies?
In terms of jobs, ANWR’s impact would be just as dramatic. The U.S oil and gas industry alone generates about 4 percent of all U.S. economic activity and a 2003 study by the National Defense Council Foundation found that ANWR’s oil could create more than 2.2 million jobs across all 50 states. This amounts to hundreds of millions of dollars in tax revenues and royalty payments. And this doesn’t even begin to examine the impact that developing ANWR’s vast amount of natural gas reserves would have on the U.S. economy and national security.
America’s prosperity depends in large part on energy use. For transportation it will be several decades at least before alternative fuel vehicles, be they hydrogen fuel cell, electric/battery or natural gas will be developed enough to satisfy a significant portion of the United States’ transportation needs. Accordingly, whatever other policies Congress and the President decide undertake to increase America’s energy security, developing ANWR is a wise choice.