Drilling in the Arctic National Wildlife Refuge
One of the long debated questions in America’s quest for secure energy sources is whether or not to drill for oil in Alaska’s National Wildlife Refuge. The skyrocketing rise in oil prices, global extremism, civil and political conflict in the Presian Gulf region, and recent moves in Congress have placed added pressure on the question of whether to allow oil exploration in the refuge (Kotchen, Burger, 2001, p. 4720).
Lying on the northern fringe of the North American continent, spanning from the Brooks Range area to the Beaufort Sea, the Arctic National Wildlife Refuge is the greatest “living reminder” that preserving nature in its primal state is a fundamental American value. In reemphasizing that tenet, the US Congress and American society have earnestly defended their collective agenda to safeguard the wildlife sanctuary and rebuff any claim that drilling for oil in the refuge will contribute to solving the energy security problem of the United States (Natural Resources Defense Council, n.d., p. 1).
It is estimated that of the Refuge’s 1.5 million acres in the Coastal Plain area that is the location of the supposed oil, only 2000 acres will be directly affected by the development. Nevertheless, as the area is considered as a critical wildlife sanctuary, there are those that are apprehensive that commercial exploitation of the area will result in massive devastation. In addition, there are additional fears that development would irreparably damage the land, and in return, there will be negligible amounts of oil will be recovered to compensate for the damage caused.
The question here is whether there is enough oil in the area to justify the harm that might be inflicted in the region. In essence, is there is enough oil to justify the damage? Regrettably, there is not accurate data on the volume of oil in the ground. It must be noted that oil will be in locations that have not been developed, and the oil sources that have been identified are beyond economic viability to recover. However, with skyrocketing oil prices and resources getting thinner, the two factors will aggressively push for enhanced technologies and an extension of listed reserves.
In the study of the US Geological Survey (2001), the “technically recoverable” resources lie in the Refuge’s 1002 section, or simply the ANWR. “Technically recoverable” can be defined as “resources that can be recovered using current technologies with regard to cost.” Using the data in the study, the research shows three possible scenarios-a “low estimate” of 4.25 billion barrels of oil with a 9.5 percent degree of assurance, a high of 11.8 billion barrels of oil with a low percentage of reliability, and an average mean of 7.69 billion barrels of oil (Kotchen, Burger, 2007, p. 4722).
The oil sector contributes less than 2 percent to yearly Gross Domestic Product of the United States; the oil industry in Alaska contributes less than that. As oil companies aggressively engage each other in a search for oil resources, specifically in times of high prices, the number of labor and expenses increases as well. In a study of the American Petroleum Institute, the costs of operating oil fields have dramatically risen over the past years. The cost of drilling for oil for a land-based oil facility 10,000 to 12,499 feet rose from $111 per foot to $294 per foot drilled. Costs for onshore drilling in Alaska also rose from $283 to $1,880 per foot drilled during the same period. Given the harsh Alaskan environment, additional transportation costs will be incurred for hauling protective equipment and materials to reinforce the mechanisms and equipment needed to extract the oil (Spiewak, 2009, p. 6).
In considering whether or not to drill for oil in the ANWR, one must study the potential benefits as well as the downsides of the issue. The oil emanating from the possible oil production in the ANWR would widen the current production schedule from the North Slope fields. Pipeline facilities would link the oil platforms and production facilities to the Trans Alaska Pipeline nearly 50 miles away. Industry analysts can easily integrate the oil coming from the ANWR to the current Trans Alaska pipeline structure.
At present, the pipeline can carry more than 2.1 million bpd; the pipeline will be sued to augment the declining production output of the North Slope fields. Without new oil resources, the production schedule in the North Slope fields will cease in 2025; should the ANWR be explored for possible oil fields, the economic viability of the Trans-Alaska Pipeline will be extended to 2058. The ANWR oil field will help in lengthening the lifespan of the North Slope and the collective oil industry in Alaska by more than 30 years (Spiewak, 2009, p. 4).
According to a number of industry analysts, the issue of drilling for oil in the ANWR is a mere distraction from the real problem of finding a feasible and viable solution to securing America’s energy requirements. There is extremely little to no benefits that can be derived from allowing oil production activities in the sanctuary, and given the amounts that are estimated within the refuge, the amounts will not make a significant impact on the energy requirements of the United States, and lesser on the needs of the global market.
The oil that would be harnessed from the arctic sanctuary would take at least a decade to be utilized in the market, and even when the area reaches peak production rates, which is in the year 2027, the collective contribution of the refuge would be able to contribute a negligible 3 percent to the daily energy needs of the United States. In the estimates of the United States Energy Information Agency, drilling for oil in the Arctic would help Americans save up to less than 4 cents a gallon for the next 20 years (Natural Resources Defense Council, n.d., p. 1).
Aside from the paltry economic benefits, the refuge can sustain irreparable damage for the sake of filling American gas tanks. The environmental threat to the refuge relating to the development of the Refuge comes from two basic sources: one, the vehicular traffic resulting from the seismic evaluation of the area, and the frameworks for harnessing and shipping the oil to the markets.
In a 2001 report from the United States Fish and Wildlife Service (USFWS), the agency reported that commercial oil activities will have enormous deleterious effects on the caribou and musk oxen and conservative impacts on Arctic wildlife such as wolves, polar bears, snow geese, arctic grayling and coastal fish. Regrettably, there are no exact data on the impact of oil drilling on these animal populations, with the exception of caribou and oxen populations (Kotchen, Burger, 2007, p. 4725).
In analyzing the dilemma of drilling for oil to meet US energy requirements and preserving Alaska’s pristine frontier, an economic methodology is unviable. However, there are merits in using a market based approach as these display that there are disputes in whether to look for oil and secure America’s oil requirements or to be innovative in looking for new technologies and solutions rather than drilling for more oil. These innovations could come in the form of new technological advances in renewable fuel and energy sources-solar, hybrid fuel systems, bio-fuels-and as a result of the innovations, the benefits that would hopefully be derived from new drilling activities that would inflict more environmental damage (Kotchen, Burger, 2007, p. 4727).
References
Natural Resources Defense Council (n.d.) “Arctic Wildlife Refuge: why trash an American treasure for a tiny percentage of our needs?” Retrieved 27 October 2014 from <http://www.nrdc.org/land/wilderness/arctic.asp
Kotchen, M. J., Burger, N.E (2007). Should we drill in the Arctic National Wildlife Refuge? An economic perspective. Energy Policy pp. 4720-4729
Spiewak, M. (2009). “Theory and evidencedrilling for oil in the Arctic National Wildlife Refuge: a cost-benefit analysis” Retrieved 27 October 2014 from <http://www.stern.nyu.edu/sites/default/files/assets/documents/con_043140.pdf
