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WebMemo #692 on Energy and Environment

March 17, 2005

Opening ANWR: Long Overdue

By

Congress now has the best-and possibly the last-opportunity to open up a portion of Alaska's Arctic National Wildlife Refuge (ANWR) to oil exploration and drilling. The Senate is set to include ANWR drilling provisions in its budget resolution, which should come to a vote before the end of the week. Doing so would help boost domestic oil supplies and send an important signal that the United States is serious about addressing its future energy needs.

 

New Politics

Objections to drilling in ANWR, mostly from environmentalists, have stymied efforts to open up the refuge ever since a 1980 change in federal law allowed for oil and gas exploration there. At the time, Alaskans were under the impression that production would start soon. Sen. Ted Stevens (R-AK), who recently toured the remote North Alaska site, said that for "24 years I've argued to get Congress to keep its word to us."

 

Over the last four years, the only holdup has been in the Senate. The most recent version of the Senate energy bill, which fell two votes shy of breaking a Democratic filibuster, did not even contain ANWR provisions. The Senate had voted 52-48 to keep ANWR out of the bill entirely.

 

ANWR's prospects in the Senate now look considerably brighter. Though still unlikely to survive a filibuster, ANWR could probably pass a simple majority vote. The Senate's budget resolution may accomplish this. It includes expected federal revenues from oil leases in ANWR, estimated to bring in about $2.7 billion dollars, and a provision to lift the current restrictions on drilling. ANWR's opponents tried to strip these provisions from the budget but failed in at 51-49 vote on Wednesday. Because the budget cannot be filibustered, that was their final chance. A vote on the whole budget could come later in the week.

 

In Washington, support for opening ANWR falls mostly along party lines, with only a few Democrats in favor. But that is not so in Alaska. In the Alaska's 2004 Senate race, both candidates accused each other of not being sufficiently pro-drilling. Republican Lisa Murkowski won, but only after fending off attacks from Democratic challenger and former Governor Tony Knowles that she failed to deliver ANWR drilling to the Alaskan people. Alaskan residents would share in the leasing revenues, as they have with Prudhoe Bay, located west of ANWR. Prudhoe Bay has delivered billions of barrels of crude through the Alaskan oil pipeline since the 1970s.

 

Good Energy Policy

The Prudhoe Bay experience also presents strong evidence that drilling can be done with only a modest impact on the environment. Decades of drilling on a scale much larger than that envisioned in ANWR have not harmed the porcupine caribou herds near Prudhoe Bay or caused any of the other environmental problems that were predicted. Thirty years makes a difference, too. Drilling in ANWR would be done with much better environmental safeguards than were available in the 1970s. And today's technology is far more environmentally friendly than that available 30 years ago.

 

ANWR is the largest single untapped source of American oil. The US Geological Survey estimates that it contains 5.7 to16 billion barrels of recoverable crude oil. Assuming the middle of this range, ANWR could provide nearly a million barrels per day, every day it is in operation, for several decades. This drilling would occur on only 2,000 acres of ANWR's 19 million acre expanse and only during the time of year when the ground is frozen.

 

If Prudhoe Bay is any guide, ANWR probably contains more oil than is currently estimated. Prudhoe Bay has provided several billion barrels above initial predictions and is still producing today, years longer than expected. As with ANWR, Prudhoe Bay had its opponents at the time it was commissioned, but without its oil, gas prices today would be even higher.

 

With oil currently at $55 per barrel-an inflation-adjusted level not seen since the early 1980s-public support for opening ANWR is also stronger than in the past. Supporters should remember, though, that ANWR drilling is a long-term project, not a short-term solution. It will take at least seven years of work before the first barrel becomes available, and so ANWR will not affect current oil and gasoline prices. On the other hand, had President Clinton not vetoed an ANWR proposal in 1995, we would have that oil today.

 

Conclusion

ANWR alone will not dramatically bring down the global price of oil, but it will help more than any other single measure within the federal government's control. Perhaps more importantly, it would signal a real shift in Washington's approach to energy. For the past decade or more, the federal government has been a hindrance rather than a help in expanding America's domestic energy supply. Opening ANWR would be the federal government's first major pro-energy measure in many years and would be a real sign that Washington is finally ready to start addressing the nation's future energy needs.

 

For these reasons, the Senate would be wise to use this opportunity to include ANWR in its budget.

 

Ben Lieberman is Senior Policy Analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

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