Potential oil production in the Arctic National Wildlife Refuge

We cannot rely on ANWR to significantly alleviate our long-term security problems stemming from our heavy reliance on increasingly imported oil.

The question arises, can whatever oil there is in the Coastal Plain of the Arctic National Wildlife Refuge (ANWR) materially change this gloomy long-term outlook for U.S. oil supply and production? (The Coastal Plain includes the ANWR 1002 Area, Native Inupiat lands,and State of Alaska offshore lands.)

The Department of Energy recently released an assessment of the potential oil resources in ANWR Coastal Plain. (For more information, go to http://www.eia.doe.gov/ and search for "ANWR".) DOE's analysis is based on a 1998 assessment by the U.S. Geological Survey.

According to DOE, there is a 95 percent probability that at least 5.7 billion barrels of oil are technically recoverable. At the other end, there is only a 5 percent probability that there are more than 16 billion barrels of oil that are recoverable. The expected (mean) estimate is that 10.3 billion barrels of oil are recoverable. (The great bulk of this recoverable oil would be commercially available at an oil price of $25 per barrel.) For comparison, total recoverable oil in the lower 48 states is about 190 billion barrels while it appears that the north slope will eventually yield about 15.5 billion barrels. Thus the mean value (10 billion barrels) represents 5 percent of the total recoverable oil in the lower 48 states, or 2/3 of the oil in the north slope.

Figure 5 combines the oil production data in Figures 1 and 2 along with three projections for ANWR Coastal Plain production, corresponding to recoverable quantities of 5.7, 10, and 16 billion barrels.

There is considerable uncertainty as to when production in the ANWR Coastal Plain could begin. DOE estimates that oil production could start in the year 2010 if leasing were to occur in the next few years and that production would peak some 20-30 years after the onset of development. We assume that oil production in ANWR (at the expected 10 billion barrels of recoverable oil) would start at about 100,000 barrels per day (b/d), in 2010, and that it would peak 20 years later in 2029. (See Figure 5). If production follows the pattern of Figure 5, the ANWR Coastal Plain would produce 200,000 b/d or more for a period of about 30 years, (from 2013 to 2045).

Figure 6 shows total U.S. crude production, with and without the ANWR Coastal Plain, for the case of 10 billion barrels of oil.

It is clear that it would take some 13 years (from today) for the ANWR Coastal Plain to begin making a sizeable contribution to U.S. oil supply and that while this would be a non-trivial contribution to supply, it really does not change the long-term outlook. We cannot rely on ANWR to significantly alleviate our long-term security problems stemming from our heavy reliance on increasingly imported oil.

Figure 6 also shows that U.S. oil production, for all intents and purposes, is a thing of the past, not the future. And producing oil from the ANWR Coastal Plain does not materially change this simple conclusion. If the Department of Energy is correct, U.S. oil demand will increase by 33 percent over the next 20 years, and imports will increase from 55 percent of supply to 70 percent. This is a time period when ANWR can make only a marginal contribution to solving the nation's oil supply problems.