Energy futureUnder certain assumptions, ANWR drilling helps U.S. energy independence

“Just the facts, M’am, just the facts,” as Sgt. Friday used to say. The debate over whether or not to drill for oil and gas in the Arctic National Wildlife Refuge (ANWR) in Alaska has moved beyond a debate about U.S. energy policy, and is now a kind of a litmus test for one’s ideological commitments. If you are a liberal, you are supposed to oppose drilling in ANWR; if you are a conservative, you are supposed to support such drilling (in last Wednesday’s Republican presidential candidates debate in California, Mitt Romney pointed to John McCain’s opposition to such drilling as proof that McCain was “out of the conservative mainstream”). What are the facts, though, about the energy potential of ANWR? The U.S. Department of Energy’s (DOE) Office of Fossil Energy has issued a comprehensive new report — “Alaska North Slope Oil and Gas: A Promising Future or an Area in Decline?” — examining the potential for Arctic Alaska to remain a major contributor to the U.S. domestic energy supply under different development scenarios. Future projections were viewed from two perspectives, an oil-centered near term (2005 to 2015) and a long term (2015 to 2050) marked by the emergence of gas as a major factor in exploration and development activities. Key findings of the report indicate that the future for Alaska North Slope oil and gas resources ranges from very promising to limited depending on how many of the following assumptions apply:

* An Alaska North Slope natural gas pipeline is operational by 2016

* Oil and gas prices remain near current high values

* Federal and Alaskan fiscal policies remain stable and support the huge investments required

* Reserves in known fields increase through discovery of new pools, application of new technology, or higher oil prices

* The 1002 Area of Arctic National Wildlife Refuge is opened for exploration and development

* Exploration is allowed in the most prospective areas of National Petroleum Reserve Alaska

* The Beaufort and Chukchi Seas are available for exploration and development without major restrictions

If all assumptions were to materialize, an additional 36 billion barrels of oil and 137 trillion cubic feet of natural gas would be added over current reserve estimates. This result would help limit oil imports and increase America’s energy security. From an exploration perspective, the North Slope is not a mature petroleum province and may provide oil, and potentially natural gas, for years to come. Thus far, most natural gas produced during oil production has been reinjected to enhance oil recovery. With the decline in oil production and a stranded reserve of no less than 35 Tcf of recoverable natural gas, interest is building toward transporting the resource to domestic markets. The contribution of North Slope oil has slipped from 25 percent of U.S. domestic production in 1988 to about 17 percent today. The certainty of a gas pipeline is expected to increase exploration across the North Slope and should result in new discoveries and infrastructure expansions that extend the life of the Trans Alaskan Pipeline System (TAPS) beyond 2050. An early shutdown of TAPS would potentially strand about one billion barrels of oil reserves from the fields analyzed.

The two-volume report, which was prepared by the Office of Fossil Energy’s National Energy Technology Laboratory, consists of a summary report that offers a set of hypothetical scenarios and a full report that contains extensive detail. Together they outline the possible future for an area that covers the geographical region of Arctic Alaska north of the Brooks Range, from the Canadian border on the east to the Chuckhi Sea Outer Continental Shelf on the west.