The Arctic National Wildlife Reserve (ANWR - or An wahr), is a small parcel of land when contrasted against Alaska, but still, a pretty big parcel of land. It's bigger than West Virginia, and would rank as the 40th largest state if it were a state.
It was set aside in an effort to preserve species and land which had, by contrast, been destroyed in the lower 48 states, as a last haven for what was once a continent of pristine beauty. Of course, it was in the frozen north, land so undesirable, that it has the among lowest population densities in the world. That's part of the reason it was chosen.
Now, as we seen an ever increasing need for oil, those who would gladly strip mine the upper midwest for shale oil, also want access to ANWR, where there is approximately 18 Billion barrels of oil - and that's a lot of oil. It's 1 Billion more than was at the Prudhoe Bay finding.
So, sounds good, we do a little drilling, disturb not too much, and voila' we have much less expensive gas again, right?
Not so fast there big fella, some realities start to sink in when you consider where this oil is, and what is required to get it to a refinery. Some further realities sink in when you consider the overall impact such supply actually would have on the world market.
Prudhoe Bay/Alaskan oil represents 17% of the US oil consumption, it had 17 Billion barrels, about 9 of which has been pumped. It comes to the lower 48 through the Trans-Alaskan Oil Pipeline, which at peak, moved about 2.1 Million Barrels per day. Currently that pipeline carries 750k (roughly) per day.
Presumably, to use the ANWR find, the same pipeline would be used, if not, the time to get ANWR oil to market would be many, many years. Some sort of cross-ship pipeline would seem to be required - a big job, but a LOT less impactful than having to build a second pipeline, but that's where the trouble would seem to start. Prudhoe still HAS 8 Billion Barrels, and its shipping that daily at a rate of 750,000 barrels. If we assume ANWR would use up the remaining roughly 1.3 MM/bbl shipping capacity/day, then we get that ANWR would simply replace what was once coming from Prudhoe Bay. Meaning the net impact on the world stage would be roughly 1.3MM/bbl - even if ANWR could PUMP 10MM bbl/day, the problem is in logistics, there is no way to ship that oil south without either a. building a new pipeline - (a decade long project), or using the current pipeline.
Then there's this, oil is of course used world wide. 96% of the growth in consumption is in nations which subsidize the price of (and in many cases produce) oil. The US is not among that list. Their consumption will continue to grow until they are convinced to stop, they are impairing the ability of high prices to reduce consumption. Currently, the world uses about 100MM/bbl/day, at peak pumping ability, the amount of oil the oil producers can provide will peak in 4 years at 110MM/bbl/day. So, think about it, will 1.3MM/bbl/day make much, if any, difference, when consumption is only going to rise? Will a 1% increase in production really matter? The simple answer is, not very much. Oil is more affected by rumor than reality, so even a 1.3MM/bbl/day increase probably would drop the spot market by more than 1%, it might even drop it as much as 5% - but likely not much more. When OPEC agreed to increase supply by 1MM/bbl/day several years ago, oil dropped in price, but only a few dollars a barrel.
So, ANWR is unlikely to have much of an impact, and it won't have an impact for a decade or so.
Then let's talk about off-shore drilling. It wasn't economical 5 years ago, and is now only because oil is above $60/bbl. If the threats to Nigerian production, and to Iran's supply were removed, oil would probably be near $60/bbl according to both oil industry and airline industry executives. Meaning, offshore drilling is only viable IF supply isn't increased much above consumption growth. In short terms, it means offshore drilling won't be used if prices drop, so it won't really impact anything, other than keeping up with current consumption, and again, that won't happen for 10 years.
Then finally, there's shale oil. The US is said to have 150 Billion barrels of oil in shale oil deposits. There are two rather inconvenient truths here, though. First, shale oil takes HUGE amounts of water to extract, not exactly a robust commodity in North Dakota, Utah, Wyoming and Montana (where the deposits are found), and, if used for shale oil extraction, means it WON'T be available for US citizens, creating indirect shortages. Oh, and this pesky problem, shale oil is extracted by strip mining - clearing vast areas of land of it's topsoil. While the oil companies do a decent job of putting the landscape back into use, the shear vastness of the area of deposits means we'd have to strip mine an area roughly 20% of the size of the continental US to fully extract that oil - imagine the reality of that impact. So, there's not really enough water, and the environmental impact would be unbelievable in it's magnitude.
The bottom line is, the neo-cons want to entrust our future energy needs and stability to the same companies who couldn't predict the current shortfall, either didn't plan well enough how to handle it, or were plenty happen to see it coming and reap the benefits, and stood before Congress and said 'it's not OUR fault' that we didn't plan. I think the citizens of Alaska would be happy to atest to the soundness of trusting Exxon after the Valdez crash - it took a dozen years and a dozen lawsuits to get Exxon to live up to their promises to clean up the Alaskan coastline. I think trusting companies who's primary motive is profit - to 'do the right' thing, when they've so demonstrably proven they will do anything BUT the right thing if given an opportunity to make money off it, is economically vapid, vapid beyond words.
The long and short of it is simply this, there IS no immediate solution. The solution to trust the oil companies to find enough oil is trusting that in 10 years they won't look to create the same shortages, and maximize profits, that they could see 10 years ago. It also means trusting them NOT to pollute, or create economic wastelands, in pristine wilderness that is irreplacable. Finally, it ties our future to a fossil fuel that we KNOW has enormous negative impacts on the health of our country and the world as a whole. We are at a crossroads in history, do we look to simply find enough oil - as may exist in the shale deposits - to satisfy our gluttony for cheap, but destructive, energy sources - or do we look forward responsibly for better, cleaner energy? Some neo-cons say 'do both' but trusting that they'll actually DO both - is trusting them (oil companies) to not lead us into shortages that create massive profits and ruined economies. It's time to cut that umbilical cord and to put our future into the hands of people who grasp that if we do not concern ourselves with the plight of all, but rather the plight of a few, in the end, we all perish.
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