by Chris Cornell
Coastal Journal contributor
According to the latest USGS Alaska Wildlife Reserve survey, the best case senerio would lead to an extraction of 16 billion barrels of oil. That’s 2.11 years worth of oil, assuming we could get it all out of the ground, which never quite happens. Once the ANWR oil reached peak production, the benefit would provide a 50 cent drop in the barrel price. That benefit would last for about 3 years. A report issued by the Energy Information Administration said that if congress gave the go-ahead, drilling went smoothly and peak production was reached on schedule by around 2025, the result would be that the US could import 66 percent of its oil from abroad, rather than 70 percent. These figures indicate that ANWR drilling would not significantly relieve our dependence on foreign oil.
There are other factors that diminish the contribution ANWR oil could make to our foreign oil dependency. Oil prices are set internationally, so although America could specify that ANWR oil stay here, the price we’d pay would still be the market price. Just ask the oil companies if they plan to offer a Yankee discount on ANWR oil because it’s the patriotic thing to do. The answer would be no.
Another factor is the fact that ANWAR’s 2 million barrels a day would need to be balanced against steep production declines expected Russia, Mexico and the North Sea over the next several years. Although ANWAR oil might help to offset these loses, it would do nothing to solve our real problem, which is dependence on oil, period. America possesses 3 percent of the world’s oil reserves, but uses 25 percent of the global supply. We uses twice as much oil per person as does Europe or Asia. Our economy’s dependence on oil is what makes our future precarious. Drilling for more oil locally will not alter that dynamic.
We are told by the Republicans that environmentalists have prevented new refineries from being built. In fact, the Environmental Protection Agency has testified that, in the last 25 years, it has received only one application to build a new refinery. The Republicans also tell us that the EPA stymies plant expansion and modification. In fact, CEOs for BP, Shell and Conoco all testified to Congress in 2006 that environmental requirements have not blocked a single planned refinery expansion. In fact, EPA administrator Carol Browner testified to Congress in 2000 that about half the permit modifications for refineries were issued within five months and that most of the others were issued within a year.
Oil execs have testified before congress that existing plants are able to greatly increase their output, should that become desirable. But scarcity means profits for Big Oil, so don’t look for increased refinery production any time soon. Indeed, in this time of supposed scarcity, the United States is awash with excess crude oil at a time of record high crude oil prices. U.S. commercial inventories of crude oil stand at 348 million barrels are the highest level since May 1998.
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