Drilling in ANWR: What's Not to Like?

uIn all of the recent discussion about opening up America's vast energy resources, what has received the most attention is the potential effect on oil and gas prices. But there are two other important issues that have not received much attention - the effect of domestic oil development on: a) jobs and b) taxes.

From ANWR.org:

The U.S. economy benefits from domestic production when new construction, service, manufacturing, and engineering jobs are created. These jobs occur in all 50 states. A national impact study by Wharton Econometrics estimates total employment at full production in ANWR to be 735,000 jobs. Federal revenues would be enhanced by billions of dollars from bonus bids, lease rentals, royalties and taxes.

And these jobs would be created across the country, not just in Alaska. To see the number of jobs created by state, go here. And that's just for ANWR, and doesn't count the new jobs from oil production in the OCS.

Aside from possible environmental concerns about devleoping America's 140 billion barrels of domestic oil reserves, what's not to like? We'd get lower oil and gas prices, more jobs and increased tax revenues. Seems like those outcomes should be welcomed by politicians of any party. And they'd even likely get the support of union members.

Comments

[CLH]

Right on! The democrats with their hate of energy are destroying their party. Sun and wind maybe helpful but are NOT the answer.

[toddpw]

Frankly I think we should preserve these for the true endgame when the rest of the world really does run out of oil, then we will be sitting on a goldmine.

Besides, local drilling is just a distraction from the real solution which is to tell the corn ethanol lobby to go take a hike, so we can fund non-food crop ethanol or even methanol, which is also useful as a fuel but the media steadfastly ignores it.

Apologies for the plug, but I found Robert Zubrin's book "Energy Victory" to be very clear-headed and scientifically credible. His #1 takeaway point is that if we got serious about driving the adoption of Flex Fuel vehicle technology, it would cost very little compared to how much competition it would open up in the liquid fuels industry.

[Omega]

What's not to like is:

a) The enormous expense and energy of developing ANWR is diverting us from the vital task of getting off our oil addiction and developing our renewable energy resources. Until we move in this direction, we will continue to be at the mercy of middle eastern oil producers and get sucked into more bankrupting overseas military fiascos.

b) Even in the best-case scenario, ANWR oil won't get to the consumer for more than a decade from now; other energy sources can be tapped much more quickly.

c) While it is not yet perfectly clear what the effect on our global climate and local weather patterns will be, and while there are of course natural cycles of climate change, it makes no sense to imagine that humans injecting massive greenhouse gases into the atmosphere by burning oil and coal aren't having a significant impact on the global atmospheric and ecological systems. In fact, if natural cycles are warming the earth now anyway, it is even MORE urgent for us not to exacerbate the problem by burning more oil.

d) Quite possibly even more alarming than climate change is the acidification of the world's oceans, as a direct result of the rapid rise in CO2 in the atmosphere. The impact on the oceans' primary productivity is drastic and may result in a collapse of that vital food resource around the world.

e) it is insane to be using up our precious remaining oil reserves (that are relatively easy to get at and affordable to extract) by burning them, both in the internal combustion engine and for heating. Other sources of energy -- generated from renewables such as solar, wind, geothermal, tidal and wave -- can serve those purposes admirably. We should be saving our oil for uses for which there aren't easy substitutes, such as petrochemicals, plastics, and the myriad other products that have become essential in our modern technological economy.

f) A national crash program to develop our vast domestic renewable energy resources would be a terrific stimulus to the US economy. We could put to beneficial use America's legendary abilities to innovate and adapt to change, become a world leader in an industry with huge export potential, win back much of the admiration of the rest of the world that we have squandered under the current administration, and more or less save the world to boot. Only our flat-earth mindset is standing in the way.

[medic]

I agree w/ toddpw. Use everyone elses and get to ours in the end. Flex fuel appears to be a viable alternative as well. It is just plain supply and demand (my most humble and slightly educated opinion) if in we go that route. Sometimes we just have to take our medicine for the webs we weave. Will there be a correction? I don't recall gas at the pump prices making a drastic decline..ever. I could be wrong as I have only looked up the past 40 years.

[medic]

Omega has some pretty valid points as well. How do we get the folks up at capitol hill to act? $$$$$!!!

[Roabert J. Considine]

The Dem. enviormentalist that voted down drilling off shore and ANWR are voting for what they support. A regemented country where the gov. control our waking moments. A large oil find would be the last thing they would want. How do you impose the conrols they love and want if there was no crisis? That is why they oppose further drilling and want to make us spend money on non effecient energy like wind, tides, solar etc. If we had unlimited energy they would not be able to sell their programs and gain total control.

[theinvestingspeculator]

It is only a matter of time before there is drilling in ANWR and the outer continental shelf. Like Jim Rogers says "Oil is going so high that the US will start drilling on the White House lawn." This oil market is like Nasdaq in 1998, I will tell you why @
theinvestingspeculator...

[Lex Luz]

Considine's "argument" above sums up just about everything that's wrong with the far-right wing on this issue. It's simple a pure-partisan shriek that advances nonsense without any regard either for facts or for the possibility that there might be a solution to our energy issues if we work together. Partisans on both sides of this issue want to stop progress in the name of "winning," except that by winning in this case it's likely that they sentence the nation to death.

What's needed instead is a real energy policy. Yes, we must drill ANWR, and we had better start yesterday, because it's going to take 10 years to realize significant production and we will ultimately find that there is far less oil there than the most optimistic estimates "prove." The jobs benefit alone will be worth it, and we'll realize that far sooner than we realize whatever oil we actually can pump out of the ground.

At the same time we must recognize that drilling for more oil doesn't solve anything - if we remain dependent solely on hydrocarbons for our energy needs, we will absolutely face our ruin and that right soon. So yes, drill absolutely everywhere. At the same time, begin building out nuclear capacity, wind (to say wind is not efficient is utterly laughable - go ask T. Boone Pickens what he thinks of it), thermal solar, PV, geothermal, biomass, and more. Get solar and wind power into every new housing development, with full grid tieback (there's something power companies have resisted for far too long). Give power companies an opportunity to have a piece of these micro-generating and micro-distribution options.

I object to government subsidies on principle, but if we're going to give them, let's stop giving them for oil exploration and start giving them for development of net-positive new fuels for transportation. Let's also build out rail infrastructure for freight and passenger traffic, especially light rail and other public transit projects too.

To sit around shrieking that the Democrats or Liberals want to take away your freedoms is idiotic. For environmentalists to screech that we have to stop living is equally idiotic - we've gone too far down the oil path now to stop. We need to drill for more oil to be sure, but we also must recognize that it IS finite, and it WILL "run out" as a practical matter, and the result of that is the certain death of billions of people and most of the world's nations UNLESS we move on to alternatives, fast.

This isn't about controlling people's lives, their options, or their privacy. It's about finding ways to work together so that we can all survive the crises that are here now and coming next.

[Anandakos]

CLH, Robert J Considine,

You don't like the idea of solar and other renewable energy sources, but you know what? Assuming that human civilization is to last longer than the next 4,000 years, there is NO ALTERNATIVE.

Yes, 4,000 years is a long time, nearly all of recorded history. And we'll all be dead. But it's a paper-thin slice of humanity's biological history, and a few milliseconds of a 24-hour earth lifetime.

But 4,000 years is the longest ANY non-renewable energy resource available to us here on earth will be available. That span is of course the time deuterium fusion, assuming we can get it work and get all the deuterium from all the water in the biosphere, would last at current energy consumption levels.

Fission without breeder reactors will be exhausted in less than 40 years; with breeders it would last about 1,000. Coal would last about 250 but smother us long before it is fully consumed. Oil MIGHT last 30.

There are basically two potential sources of sustainable energy in the universe: gravity (tidal) and thermonuclear at a distance (solar and wind). That's it people.

So far as a plan, Omega nailed it.

[Brian27]

1) Bringing Anwr oil to market is cheap. It is only 50 miles from Prudhoe Bay. Having more domestic oil will reduce dependence on Mid East.

2) An expected increase in future supplies will reduce future prices and arbitrage will cause current spot prices of oil to fall.

3) Burning Anwar oil will have no different effect on greenhouse gas emissions than burning Mideast Oil of the same quality

4) There is still alot of oil reserves. Canadian oil sands holds more reserves than Saudi. Plus there is still offshore drilling. Brazil has found huge new fields in the Atlantic ocean. Canada has found fields in the Atlantic. Time for America to join the world and allow offshore drilling in the oceans. Using wind and solar to power vehicles is not feasible at this time.

5) Currently FPL proposes a solar project that costs $60,000 to power a houshold ... pre construction cost. That is not stimulative. All the proposed regulation and taxes on the economy will stifle American ingenuity and innovation as it has done in Europe.

[zealocrat]

We must prevent the US from using its own natural resources at all cost. If the addict suffers terribly and then dies by going cold turkey, well I guess it just wasn't important enough to find an alternative.

We should be driving electric cars recharged by wind and solar power by now, right?

Ok sarcasm aside. Omega left out the pathetic truth that European countries are DECADES ahead of the US in nuclear energy, another resource the democrats have block employing.

As far as I can tell there are only two underlying reasons the democrats have continually block the efforts toward actual versus pie-in-the-sky theoretical energy independence:

1. Just can't stand the idea of some other party getting the credit
2. They want the Mid-East's problems to be our problems: if we did not depend on oil from the region, imagine how that would change the political landscape.

How many presidents have done the 'Mid-East Peace talks' dog and pony?
If the world's largest consumer of petroleum supplied itself, would Iraq have invade Kuwait?
Would the world hate the US for its interventionist policies?

[DM226]

Great post Lex Luz. Its always nice to see someone weigh in on things with a non-partisan mentality. Yes, there are democrats who think we can just stop using oil but there are also right wingers who don't understand the need to develop alternatives. Anyone swinging that far to either side needs to check their ego and rethink what they are saying.

[maximax]

what the hell is this article doing on an investment website? ah it's the election year, it's all politics. i generally find this author's contributions not worth pixels they are displayed with, and his energy related arguments have already been refuted above. Just to make it clear once more: "We'd get lower oil and gas prices" is most likely wrong. And what to do when 20 Mn b/d America has used that oil up as well?! Drilling up the current off limit regions is only good for one group: private oil companies which get kicked out of one producer country after the other and are running low on prospects pretty fast. it will not benefit anyone else.

[buyitcheap]

Environmentalists have blocked this for years, if they had not, we would be able to generate those jobs and oil supplies while we went nuclear and electric powered.

Omega, I am in total agreement with yoru last point, we need a JFK style "man on the moon space race" for energy independence. I say that every chance I get.

I think a 10 year "transition" to electric is a feasible window exploiting 3 areas: efficient transmission of electricity (replace the steel cables (lose of 10-20%) with ceramics that have near 100% efficiency in terms of loss of electricity. (I believe that firm has been mentioned on this site: HPTC(?) Second, 75 nuclear plants to be commissioned over a 10 year period, the Japanese can build them from plan to operation in 3 years. Third, massive solar farms in uninhabitable areas of the Southwest - environmetnalist.

[Ernie Montague]

There are no steel cables used to transmit electricity. Older ones are copper, newer ones are ACSR ( Aluminum Cable ( most of the cable), Steel Reinforced). Transmission loss is not the problem. The chances or removing the entire ACSR infrastructure to replace with some high tech superconductor are negligible. The cost would be huge.


Anwar does not have enough oil to do more than lower oil prices for a few years. It is NOT a huge field.

Oil sands are so INCREDIBLY polluting during oil production, and so water and energy wasting that you simply have to research them to understand the low likelihood of ever reaching Saudi levels of production. Unless you can find several new rivers in Canada that are not there now, oil sand production is limited by water supply.

[jackooo]

ANWR- If you started producing a million barrels of oil extra today, it would not lower gas prices because OPEC lowers production 1 million barrels. It is a monopoly. Mean while the land and animals are subjected to destruction. Remember the EXXON VALDEZ spill. It killed wild life and polluted waters for many years.
Forget the jobs. Learn a trade. Quit crying people.
If the government sells leases it should be cost plus. The oil companies should be required to pay a percentage of profits back to the government which refunds the money to consumers for gas pricing.
The way it operates now is the lease is sold and the producers charge what ever they want.
EX: 10 leases sold and oil is produced. It will not be sold for less than the market price so why sell the leases? You gain nothing as far as lowering gas prices. The oil companies are not going to give us a break in gas prices. lol

[matthutch]

a few points...

why do we keep talking about our "addition to oil"? as far as i can tell, using the same logic, i'm addicted to all kinds of things: air, milk and bread, concrete and steel (looking out my office window at several buildings 30 stories +), etc. rather, I choose to use oil b/c its cheap.

as far as the effect of drilling on the environment? first of all, we shown that with recent technology, the impact is minimal. second, we effect the environment every time we turn around. so what? so do animals. so does falling water. as far as science tells us, dinosaurs died by some crazy natural phenomenon. beavers build dams - cute; humans build dams - disgusting. why are humans less natural than anything else?

so what if we run out of oil? as we run out, the price of oil will skyrocket. that, and that alone, is all the incentive we need to go to other options. the more expensive oil is, the better other option will be. so why, in the meantime, should we limit the use of our resources? we can see what hoarding of food has done for other countries. we don't need artificially higher priced energy.

as for who benefits when we drill for oil in anwr? how about tax payers? the oil companies don't own the land right now. the land will be leased. and maybe we charge by the barrel for extraction. any money the treasury receives from selling the rights to extract is less money taxpayers will have to pay. (that of course assumes you think government will lower taxes; i personally think they'll simply spend more.)

why so we need some kind of "race to the moon" type government-funded program? why are we as a society better off because we went to the moon? no one lives there. no one's close to living there. we don't vacation there. the government decided we needed to go there, so we spent a lot of money doing it. i'm sure there was some rocket or satelite technologies that were discovered in the process, but was it worth the cost? i'm skeptical that it was. i can't think of many (any?) technological directions the government has chosen for us that have been better at the process than the market.

and to make a short list of our future energy sources and say "that's it" is ludicrous and shortsighted. how in the world can any of us predict the direction of energy? we can't predict what the market will do next week. energy innovation in 20 yrs? forget about it. didn't you see "back to the future"? using banana peels and beer cans was imaginary, but you can count on innovation. which speaks to one persons comments about t. boone pickens thoughts about the efficiency of wind. my belief is that you can't base the efficiency of an energy source right now on someone's investment. he's betting, just like al gore and others, that we will either 1) be mandated by government to use at energy (you don't think they aren't funding the green lobby, do you?) or 2) seriously run out of other energy sources at which time the relative efficiency of these energy sources will increase dramatically.

sorry for the long post.

[fivepointnine]

We need to drill ANWR....its a sad fact, sorry econazis, its gotta be done, same with the OCS, we CANNOT depend on oil from countries that WANT TO SEE US DESTROYED....(yes, Saudi Arabia falls into that)
We also need to be researching coal to oil and we need to start extracting shale oil (lots and lots and lots of that in the heartland, and it is economically feasable now since oil is over $130/barrel, shale oil can be safely extracted at $70/barrel.

we also need to build more nuke reactors (as green as it gets, zero emissions) we need to build hydro-electric dams (oh yeah, but the Dems hate that because it could mess up some spawning of some rare fish of some other BS like that) clean coal plants and do more searches for suitable geo-thermal powerplant locations.

If the environazis had their way (they are some of the biggest lobbyists on capitol hill) we would all be living in caves.........

[1 o 4]

Brian27 hits the nail on the head with the closest description of a comprehensive energy plan which will wean us off of oil dependence in the long run. Drill ANWR and the Outer coastal shelf. Assess a tax on the oil generated (not a windfall profit tax) and use the proceeds to develop nuclear and renewable energy. On the nuclear front, the plant should be made capable of also producing hydrogen. Use the tax proceeds to build out the infrastructure necessary for hydrogen powered fuel cell vehicles which are just right around the corner.

Our current liberal/green politicians hate big oil and want to punish them with a windfall profits tax. All that would do is disincentivize further exploration and development of new reserves. We want them to explore and develop new reserves, then tax and use the proceeds to develop the alternatives.

Of course, this all assumes that the tax proceeds would be used for what they were intended, as opposed to some preferred pork barrel rat hole of the politicians or increased governmental staffing.

[matthutch]

quick question: if the saudis want us destroyed, why don't they stop selling us oil right now? surely they know that not producing oil would cripple us beyond belief.

another question: if they destroyed us (as well as our allies), who would buy their oil? the truth is, they may not like us terribly, but they know our economic livelihood depends on us buying oil from them. i think that the less we depend on them, the more likely it is that they try to do something to us - the costs are less.

[matthutch]

sorry: THEIR economic livelihood depends on us buying oil from them.

[fivepointnine]

what about Iran? we buy LOTS of oil from Iran...........they sure dont seem to like us all too much....

[jackooo]

Latest oil spill? Today. Many penquins and birds dying coated with oil off the coast of South America.

[msgtb]

Oil is dead and the sooner the better!

Drilling in ANWR is a ruse the oil to be produced would be less that 1 1/2 million barrels per day. This would not even fill the Alaskan pipeline to full capacity. We use 21 million barrels per day, the oil from ANWR would take at least 5 years to produce?

This is America's wake up call either, continue being dependent on countries and persons that would like us driven back to the status of a third world country. Or we can be a leader in new industrial revolution and that is producing clean renewable energy for the world. I and not a tree hugger, and don't believe even believe in global warming.

The reason I do not believe that it is in our national security interest to continue to depend on a resource that we as a country can't provide for ourselves. The truth is that we just like all countries need to be energy independent.

What will it be America winner or loser?

[matthutch]

i didn't say they all like us (in fact i admitted many don't). i simply said that there's a lot of difference between dislike and wanting them destroyed (and actually going through with the destroying). do you like your boss? a lot of us don't. that doesn't keep us from working for him or her, because we value the economic exchange. It doesn't matter whether or not you like the person on the other side of the exchange. in fact, greater economic integration actually goes a long way toward peace and international stability.

[DMillerss]

TO: Barack Obama

You have the opportunity to differentiate yourself from your competition, and help our country out of this economic slump.

At $50.00 a barrel, there wasn’t enough money to pump the oil and at the same time take the extraordinary measures needed to protect places like Anwar and our oceans. At $100+ a barrel, there is. I’m a liberal and an environmentalist, but we need to harvest the fuel we have while there’s still a market for it, and until we can perfect alternative energy sources. You need to come out and state that as President you’ll support drilling for oil in Anwar, and then follow through.

This policy will help you with Independents and the older middle class; hopefully, the younger people will vote for you anyway.

[Scott Benson]

Reminder: it is currently illegal to drill ANWR, so no test wells have been drilled. There may be nothing at all at ANWR.

[bertyang]

I'm neutral in my position about drilling in ANWR or what not. Yes in
the short term it might relieve some of the pain at the pump, but in the long term it doesn't solve the larger problem, which is that we consume more oil than we produce, and that oil is a non-renewable energy source.


Maybe if we always drilled in ANWR, Honda/Toyota and none of those other fuel-efficient car manufacturers would have grown the way they did in the 1980's, and we'd still all be driving cars like in the 1970's that get 8mpg since we'd have cheaper oil. Would our world be a better place for it? In the long run, if we open up ANWR it just delays the problem a decade or two.

If anything, having the pain at the pump will drive us to come up with more efficient vehicles, alternative (and hopefully renewable) energy sources, which in my opinion would world a better place the sooner we achieve this. Considering how much energy planet earth is constantly receiving from the sun, it's a shame we don't harness more of it, and continue to fight over oil.

[Mudeh2o]

(Shake, shake)

Wake up. Omega wake up! You're dreaming again. You're experiencing that same old disastrous dream you've had the past 50 years.

[devassocx]

I believe that a nation's economic well being depends on abundant and cheap power. Doesn't really matter where it comes from if it satisfies
the above criteria.

For this reason, if we have national assets we can tap then we should, its really that simple.

Environmental problems can be handled in Alaska and in fact the
existing pipelines are a collection place of various animals because
its nice and warmer.

Any environmental damage that should occur on a tiny % of the land area is self healing after a period of time. Nature takes care of all things and man's footprint will soon disappear.

[pockyclips 2020]

Matt Hutch; An Arab proverb.

My father rode a camel,
I drive a Mercedes
My son flies an airplane,
My grandson will ride a camel.

Moral of the story; they don't think like us, they don't like us, and they don't mind a lower standard of living as long as they deny us ours. Depending on oil makes us a hostage, they can pump oil for 25 times less than we could possibly pump ANWR.

[goldenhinde]

What is the purpose of increasing the supply of that which someone is addicted to? It doesn't help eliminate the addiction.

Avoiding the pain of the transition to the post-hydrocarbon future is silly at best and absurd at worst. Transitions are painful - mostly because those who are asleep are very disturbed by the nature of change.

Oil and hydrocarbons are not cheap. That is absurd. They appear cheap because under our current economic system one does not have to account for cleaning up the environmental mess one makes. That cost goes on the taxpayers or the next generation's balance sheet. Aside from the morality of it (or lack thereof) it is fundamentally a condition of no integrity.

If you build an economic model which distorts or fails to account for reality (cleaning up the mess one makes) they you will get what you deserve. HINT: It ain't pretty.

ANWR: Sure, why not. It may help a little but helping a little will be of marginal utility. It is more like helping a very little.

Change behavior. There you go. You have to wonder. While SUV purchases are down by 25% - THAT MEANS THAT THEY ARE STILL AT 75% of normal. Now, that blows my mind.

American innovation is the only "thing" that has the real possibility of saving us. It is what we are best at and something the rest of the world cannot duplicate.

All economic and tax activity in this country shoudl be structured to stimulate, support and sustain innovation.

If you want to "sit this out" with your money in cash - big taxes.

Citizens have an obligation to the country and to the next generation. Too bad if you don't like paying for it. Sacrifice means you.- that's right - YOU!

[bearandbu]

Someone PLEASE explain to me how domestic drilling will lower gas prices. Do we really expect domestic oil to be sold at a lower price than what can be obtained on the international market? Do we really expect the contribution of domestic oil to significantly reduce the famous 'supply' in the 'supply-and-demand' (bogus) equation?

[Scrooge]

Please, give our politicians a chance to work this out: it has only been 35 years since the necessity became evident.