Drilling in ANWR would only save us 75 cents per barrel... 10 YEARS from now.

[motivez]

Here're the savings from Arctic drilling — 75 cents a barrel

WASHINGTON — If Congress were to open up the Arctic National Wildlife Refuge to drilling, crude oil prices would probably drop by an average of only 75 cents a barrel, according to Department of Energy projections issued Thursday.

The report, which was requested in December by Sen. Ted Stevens, R-Alaska, found that oil production in the refuge "is not projected to have a large impact on world oil prices."

But the report also finds that opening ANWR could have other benefits, particularly in Alaska, where tapping the resources in the Arctic refuge could extend the lifespan of the trans-Alaska pipeline. It estimates that if Congress agreed to open ANWR this year, Alaskan oil could hit the market in about 10 years.

"I'm coming away from it saying that this is yet another an indicator that opening ANWR is important to this country and to our energy future," said Sen. Lisa Murkowski, R-Alaska.

The report was unveiled Thursday by the Department of Energy's research arm, the Energy Information Administration and came a day after the Department of Interior said that 60 percent of federal lands that hold potential sources of natural gas and oil are closed to leasing.

It also comes in the midst of a renewed push by Alaska's congressional delegation to persuade their congressional colleagues to open a portion of ANWR to oil exploration. Opening the wildlife refuge is the centerpiece of recently unveiled House and Senate Republican energy plans, which focus on increasing domestic oil production in the face of record oil prices that, this week, exceeded $135 a barrel.

Stevens had no comment about the report, but did speak on the floor of the Senate Thursday in support of opening ANWR to drilling.

Wednesday, his House colleague, Rep. Don Young, R-Alaska, introduced legislation to open the refuge; it was co-sponsored by a former drilling opponent, Rep. Roscoe Bartlett, R-Md. The Senate last week rejected a Republican energy plan that included opening up ANWR.

Even as Republicans have renewed their push, Democrats have warned that there just aren't the votes to open the wildlife refuge to drilling. Congress couldn't muster enough votes to open up the refuge when Republicans controlled the House and Senate. Democrats say it simply won't happen while they're in charge.

The next four years are likely to offer grim prospects, too. All three of the presidential candidates oppose drilling in ANWR, said Athan Manuel, director of lands protection for the Sierra Club.

"Their moment in time has passed," Manuel said of the renewed GOP push. "You look at Harry Reid and Nancy Pelosi, and they're very proud — and justifiably — of holding the line on the Arctic, and not losing that fight while they were in the minority. I don't think they're going to give that up easily."

Pro-conservation groups such as the Sierra Club have braced for a backlash as prices at the pump have continued to rise, Manuel said. But they've found that high gas prices haven't led to a public clamor to open up ANWR or other off-limits and sensitive areas such as the Gulf Coast of Florida.

"The thing that high gas prices has done is make people mad at the oil companies, and not mad at environmentalists for protecting places like the Arctic Refuge," Manuel said.

However, even if drilling has a negligible effect on prices at the pump, opening ANWR to production has other positive effects for Alaska, said Philip Budzik, one of the authors of the report.

For one, it keeps the Alaska pipeline operational past 2030, Budzik said, which means that oil producers might continue to explore smaller, less lucrative North Slope prospects simply because they have a way of getting their oil out of the state. That means oil production will continue to be a mainstay of the Alaska economy.

And if ANWR oil replaces foreign oil barrel-for-barrel, that means the U.S. is importing less oil, Budzik said, and fewer oil imports mean a stronger U.S. dollar.

Also, the Department of Energy found that unlike previous reports on ANWR, U.S. oil consumption is projected to decline, in part because of recently enacted fuel efficiency standards. High oil prices are expected to slacken demand, too.

Still, the Wall Street Journal reported Thursday that the Paris-based International Energy Agency is projecting that worldwide oil supplies will struggle to keep up with demand.

The Journal reported that the IEA is expected to release a report this fall that says worldwide demand for oil will exceed 116 million barrels a day, up from the current 87 million. Some analysts suggest that the IEA report will spur more interest in previously off-limits domestic prospects.

By Erika Bolstad | McClatchy Newspapers

McClatchy Washington Bureau | 05/23/2008 | Here're the savings from Arctic drilling — 75 cents a barrel

So, not only would we not see any benefit in price for 10 years, but when we do.. it'll only be 75 cents per barrel? Not even a 1 dollar shift per BARREL?

That's not a 75 cent reduction in price per gallon at the pump, that's per barrel we refine.. a pretty pathetic result.

Next time someone suggests we should drill in ANWR to bring oil prices down, this is the study that should be linked.. not only is it not some political group doing it, but if anything you'd expect it to be tilted towards the pro-drilling side because it's coming from Bush's Department of Energy.

I think this study shows why it's useless to drill there, especially when you consider the environmental consequences of doing so.. I mean, why ruin one of the few places in the country that we have left unblemished for such a dismal return?

It just doesn't seem like a good use of time or money. I can buy into the idea that sources of energy we can tap at home > having to buy from foreigners, but IMO this just isn't worth it.

It'd be better if we started developing more nuclear plants and gave tax incentives to companies to help us get off fossil fuels entirely I think.

One interesting note, if this is popular in Alaska, why is the federal government involved at all?

[Scrum]

The libertarians on this board are going to string me up for saying this, but we need an "Apollo program" that will get us an alternative solution to oil.


There are so many benefits to ending our total dependence on the ME and their overpriced fossil fuels.

[motivez]

Originally Posted by Scrum

The libertarians on this board are going to string me up for saying this, but we need an "Apollo program" that will get us an alternative solution to oil.

There are so many benefits to ending our total dependence on the ME and their overpriced fossil fuels.

I'm sure they'll take issue with calling it overpriced, after all, the market decides!

But, I agree. If our tax dollars are going to be used for anything, it should be used for things that will benefit everyone.. and a cleaner environment, less pollution, greater security and stability by not having to deal with the middle east at all are just a few of the benefits we'd enjoy from being off oil

I really think we could get there with the technology we have now if we just went to nuclear power like France.. but people don't want it in their backyards, and I can't blame them, like I said in another thread, I wouldn't really want to live near one either.

[Simius]

bookmarked for the future.

[northhunter]

So when everyone's paying $5.00 a gallon or more this fall tell me again why Americans will vote for the Democrats? I see it now, political action groups will run adds with Al Gore saying he'd like to see $5.00 a gallon and the list of things the democrats have NOT done or allowed to be done, no new drilling, no new refineries etc. Talk about handing the election to McCain, can you say Thank You Al Gore, Harry Ried, and Nancy Pelosi.

[motivez]

Originally Posted by northhunter

So when everyone's paying $5.00 a gallon or more this fall tell me again why Americans will vote for the Democrats? I see it now, political action groups will run adds with Al Gore saying he'd like to see $5.00 a gallon and the list of things the democrats have NOT done or allowed to be done, no new drilling, no new refineries etc. Talk about handing the election to McCain, can you say Thank You Al Gore, Harry Ried, and Nancy Pelosi.

I have no idea what this has to do with the topic of the thread

[Ardentfrost]

I don't know what Republicans will do to make the price of oil go down if they win this November (yarite). More ethanol subsidies? I guess that does lower the price of gas a little... at the expense of food prices.

Or perform more wars in the Middle East so that the oil that IS there has a difficult time getting out? (society in disarray tends to focus more on survival than production)

[northhunter]

Anyone who does not think the cost of fuel will influence votes this fall is either in denial or, well I don't know. In the news each night people are hurting and they want something done. And when people start pointing out to them that it was primarily democrats that prevented new refineries, prevented new drilling it will cost the dmocrats votes. No one thing can instantly lower prices today but several things done years ago could have prevented what's happening today. Going to be some very angry voters this fall.
That's the point I was trying to make earlier, sorry I strayed from the original topic.

[Ardentfrost]

Originally Posted by northhunter

Anyone who does not think the cost of fuel will influence votes this fall is either in denial or, well I don't know. In the news each night people are hurting and they want something done. And when people start pointing out to them that it was primarily democrats that prevented new refineries, prevented new drilling it will cost the dmocrats votes. No one thing can instantly lower prices today but several things done years ago could have prevented what's happening today. Going to be some very angry voters this fall.
That's the point I was trying to make earlier, sorry I strayed from the original topic.

People will be looking for solutions, that's for sure, but there is PLENTY of blame to go around for both dems and reps. Neither is innocent of driving up prices, and both sides will make sure everyone knows the faults of the other side.

[David Octavius]

Originally Posted by Scrum

The libertarians on this board are going to string me up for saying this, but we need an "Apollo program" that will get us an alternative solution to oil.


There are so many benefits to ending our total dependence on the ME and their overpriced fossil fuels.

[thewise1]

"The thing that high gas prices has done is make people mad at the oil companies, and not mad at environmentalists for protecting places like the Arctic Refuge," Manuel said.

People are so stupid.

[Smull]

Originally Posted by Scrum

The libertarians on this board are going to string me up for saying this, but we need an "Apollo program" that will get us an alternative solution to oil.


There are so many benefits to ending our total dependence on the ME and their overpriced fossil fuels.

Originally Posted by motivez

I'm sure they'll take issue with calling it overpriced, after all, the market decides!

I just posted on the other thread how I feel about this on the thread about the oil companies. Basically I feel that the government should step in and do something, though I think an "Apollo program" would be too much government involvement, I don't want to see the government just "pick a winner" I fear that this will lead to a bad policy (James Fallows (May 05, 2008) - "Stupidest policy ever" contest results)
But based on mostly the geopolitical problems we have getting oil, I feel that this is a situation where the government should step in and encourage innovation.

Originally Posted by northhunter

Anyone who does not think the cost of fuel will influence votes this fall is either in denial or, well I don't know. In the news each night people are hurting and they want something done. And when people start pointing out to them that it was primarily democrats that prevented new refineries, prevented new drilling it will cost the dmocrats votes.

I feel this will hurt the Republicans more, they were the ones in power when this mess started, I think (rightly or not) the people will blame this on them.

[6SpeedTA95]

First of all it wouldn't take 10 years to see the oil from ANWR. It would take 3 to 5 years. Secondly no one knows exactly the impact it would have on price because we dont know the total amount of oil in ANWR. ANWR could contain as few as 5 billion barrels or more than 50 billion barrels we just dont know. There's only been ONE well ever drilled in ANWR.

Also, we do know we have substantial oil resources off the continental shelf on the east, west and gulf coasts. Estimates for the shelf range from a very conservative total of 60 billion barrels to a more substantial 240 billion barrels. Again these are all guesses.

Also the IEA is going to finish a study in november that talks about production capacity in addition to supply of crude reserves. At this point it looks like there will be a 12 to 15 milllion barrel a day shortage in refining capacity by 2015. We have a fairly large amount of natural resources on the planet but we need to keep supply and demand balanced.

Also keep in mind the US has vast coal reserves, coal can be converted to oil fairly easily. On top of that its estimated that the US has the worlds largest non traditional reserves in the form of shale and heavy sands. These resources are more expensive to produce but I think most americans would gladly pay 3.50 or 4 dollars a gallon for US oil instead of sending it to the middle east. A case that NO ONE in washington is talking about

[Smull]

what are your sources that counter this report from the department of energy?

the stuff about the non traditional resources is interesting, I wonder why you don't hear more about that

[6SpeedTA95]

Originally Posted by Smull

what are your sources that counter this report from the department of energy?

the stuff about the non traditional resources is interesting, I wonder why you don't hear more about that

There's a host of sources out there...I can't remember anything specific righ toff the top of my head but I'm an analyst in the oil and gas industry so I do a lot of reading on it. Can't remember any specific article. But what I can tell you is the mean time from getting a well planned, to drilling it to seeing production is about 20 months. In alaska that time would be at least 50% higher due to necessary pipeline construction to tap the trans alaskan as well as shipping supplies into the area. Realistically you're looking at 3 to 5 years once they decide to drill.

[Ardentfrost]

Originally Posted by 6SpeedTA95

There's a host of sources out there...I can't remember anything specific righ toff the top of my head but I'm an analyst in the oil and gas industry so I do a lot of reading on it. Can't remember any specific article. But what I can tell you is the mean time from getting a well planned, to drilling it to seeing production is about 20 months. In alaska that time would be at least 50% higher due to necessary pipeline construction to tap the trans alaskan as well as shipping supplies into the area. Realistically you're looking at 3 to 5 years once they decide to drill.

Exactly. You work for the evil corporations and therefore can't be trusted.

j/k

But seriously I was very dubious of this report. 10 years to setup any energy gathering seems unreasonable when the turn around for a brand new nuclear reactor is down to 3 scant years. If it took 10 years to do anything, nuclear would always win out on investment of capital compared to gains alone. You simply can't invest a bunch of capital for 10 years if you can do it for 3 years and get similar/greater/more sustainable returns.

Of course, nuclear energy can't be converted into gasoline... but as far as energy in general goes, no one would WANT to drill ANWR if it took 10 years to get the oil out.

[6SpeedTA95]

Originally Posted by Ardentfrost

Exactly. You work for the evil corporations and therefore can't be trusted.

j/k

But seriously I was very dubious of this report. 10 years to setup any energy gathering seems unreasonable when the turn around for a brand new nuclear reactor is down to 3 scant years. If it took 10 years to do anything, nuclear would always win out on investment of capital compared to gains alone. You simply can't invest a bunch of capital for 10 years if you can do it for 3 years and get similar/greater/more sustainable returns.

Of course, nuclear energy can't be converted into gasoline... but as far as energy in general goes, no one would WANT to drill ANWR if it took 10 years to get the oil out.

Even the deep water stuff from planning to production takes typically 4 to 5 years and the deep deep deep stuff takes 5 to 7. 10 years is too long unless they added some sort of government red tape I'm unaware of. But vritually all respectable industry measures and estimates have it at 3 to 5.

The other problem I have with the report is they use the supply from ANWR as a percentage of world output and then adjust the world price accordingly. Supply/Demand/Prices are not 100% correlated. Sometimes a minor increase in supply can have a HUGE impact on price, just like a minor shortfall can have a major impact on price. A 1% increase in supply could have major affects on world prices...the 300,000 barrel per day cut from Nigeria after you exclude hedging and weaknesses in the dollar had a 3% affect on the price of oil and yet only represents about half a percent or less of world supplies.

[Phantom]

Shouldn't we at least start drilling in Alaska before we try to "sue" OPEC & friends to force them to produce more?