Energy: Alaska Natural Wildlife Refuge

Phyllis Gardner writes: The shameless introduction of Alaska Natural Wildlife Refuge drilling into the Senate budget represents to me the worst consequence of this horrific administration and legislature.  Efforts to remove the amendment adding in the drilling to the budget failed on a 51-49 vote.  Here are the facts about drilling in the arctic refuge.

No Refuge from Greed

" As one of his last acts in office ( " Republican President Dwight Eisenhower set aside the Arctic National Wildlife Refuge, "the  only place in the nation ( where the full spectrum of arctic and sub-arctic ecosystems is protected in an unbroken continuum." The 19 million-acre refuge is a land so pristine that it has been described as " a domain for any restless soul (  who yearns to discover the startling beauties of creation ... where life exists without molestation by man." The name given to the area by the Gwich'in tribe, the  indigenous people of the region ( , "translates to The Sacred Place Where Life Begins." But big oil has been greedily devouring the lands surrounding this virgin wilderness area, turning them into an industrial site riddled with  scores of contaminated waste sites ( and  daily pollution spills ( . And now, after using  backdoor tactics ( disapproved of by the  overwhelming majority of Americans ( , right wingers in the Senate and White House have  set the stage ( for big oil to drill through the very " biological heart (  of this untamed wilderness," with the hope of drilling in other environmentally sensitive areas.

FUZZY NUMBERS...: The United States Treasury will likely never see the drilling revenues presupposed by President Bush's 2006 budget. The budgetary estimates drastically exaggerate the price per leased acre, in some cases expecting " between 66 and 120 times the historic average ( ."  Waning industry interest in the (,,SB110489061884517234-search,00.html?collection=wsjie%2F30day&vql_string=conoco%3Cin%3E%28article%2Dbody%29) area is also a serious factor and one of President Bush's own advisors stated, "If the government gave [the oil companies] the leases for free,  they wouldn't take them ( ."

...GET EVEN FUZZIER: The administration also is relying on a 50-50 split of the revenues between Alaska and the federal government, but " current law calls for 90 percent ( to go to Alaska." And it is likely that Alaskans would be  ready to go to court with the federal government ( to protect the 90-10 split. Remarkably, it is not just the revenue but the refuge's oil itself that may never reach American consumers; Alaska's congressional delegates are loudly  clamoring to restart oil exportation ( to foreign countries.

'A DISTRACTION, NOT A SOLUTION': Drilling in the Arctic refuge "serves  neither short-term demand (,0,1725788.story) ... nor long-term national policy." After the  decade or longer ( it will take to begin oil production on the land, the United States Geological Service estimates the amount technically recoverable and economically profitable to recover " represents less than a year's U.S. supply ( ." At the height of production, "the refuge would produce a paltry 1 or 2 percent of Americans' daily consumption." Tire changes and updated fuel efficiency standards  could individually save more oil ( than is likely to be found in the refuge.

COMING SOON TO A COASTLINE NEAR YOU: If  neither big oil nor the majority of Americans (  wants drilling in the Arctic refuge, the  environmental consequences ( will be permanently scarring, the activities will  endanger the future of an entire people (  as well as scores of wildlife species, and there is  no way to restrict it ( to just one sliver of the land, why is the right wing pushing so hard for something that will do little to nothing to cure our nation's energy dependence? Precedent. In a  closed door meeting with fellow conservatives (,2071,NPDN_14940_3544340,00.html) , House Majority Leader Tom DeLay (R-TX) spoke about the "symbolism involved in opening up the refuge to drilling" as well as the precedent the move will set. DeLay's comments reveal that drilling in ANWR is "a domino game that will lead to drilling in the Rocky Mountains, off the California coast and in the Gulf of Mexico." Watch out when the moratorium on eastern Gulf drilling expires in 2007.

RH: While I am no fan of the Bush administration, I think the national interest demands the oil, and it can be extracted with minimum damage to the environment.  The Democrats are wrong to make this a priority issue.

Randy Black writes: The environmental hysteria is nearly identical to that which we were subjected 40 years ago when the Trans-Alaska pipeline to Prudhoe Bay was proposed. The activists who objected to the Alaska pipeline painted a doomsday scenario for the Caribou herds if the pipeline was allowed. Factually, the exact opposite of what the environmental protesters claimed would happen. The environment in Alaska that was bisected by the pipeline was been protected to an extent that the wildlife in the effected areas have flourished to an extent greater than ever dreamed. The Caribou herd numbers are more than 1000% greater today what they were when the pipeline was built. (3,000 to more than 40,000, Source:
Alaska Hunting Bulletin Vol. 5, No. 3, A publication of the Alaska Department of Fish and Game.) The citizens of Alaska benefited, the wildlife benefited, producers and shareholders benefited, consumers benefited, the nation benefited.
The current pessimistic brouhaha presumes that those who oppose the project, which has been debated and delayed for the past 25 years by activists and their lawyers, are better able to make decisions on behalf of the citizens of Alaska than those citizens. I surmise that 98% of the protesters and their lawyers along with many WAISers, could not find the ANWR on a map without help. History of the Trans-Alaska pipeline, built between 1975-1977. Question: Who was in power then? Is there a connection to the fact that the Democrats controlled Congress then, and supported the pipeline, but are out of power now, thus oppose it? This is a valid question to discuss.

Randy Black answers Phyllis Gardner: Arguing that a particular oil field can only contribute this or that (small) percentage to overall needs is perhaps the weakest argument one can make. That’s akin to claiming that adding one physician to a staff of 50 doctors at a large hospital or medical school will add only one to two percent to the staff’s effectiveness and or production. I surmise that if that one physician is a Dr. DeBakey (the cardiovascular surgeon who invented the concept of MASH medical units, developed Dacron arteries and artificial hearts) or a Dr. Gardner, the contrary may be the case. The oil field production in the ANWR is initially projected to equal that at Prudhoe Bay, and may in fact be much, much larger. As all WAISers should know, the field at Prudhoe Bay has supplied about 20 percent of total domestic US oil production over the past 35 years and continues to supply nearly a million barrels a day even in its declining years. Are we to ignore a similar nearby find because a bunch of folks who care nothing about the will or the needs of the citizens of Alaska believe they know better?
However, one could make the same claim about any drilling operation – that it will only contribute a small part of the total common needs. If one doesn’t drill in one locale, one must drill elsewhere, no matter what the overall conservation issues entail. Think about it. If the activist’s claims had even a shred of credibility, the energy companies would not be standing in line to invest billions in the drilling projects that they wish to complete in the very few places they will be allowed to operate in the ANWR.
In the end, federal revenues will be enhanced by billions of dollars from bonus bids, lease rentals, royalties and taxes. Estimates on bonus bids for ANWR by the Office of Management and Budget and the Department of Interior for the first 5 years after Congressional approval are 4.2 billion dollars.
Pertaining to the domestic common goal which is less reliance on fossil fuels via conservation and alternative energies, the government has regulated to that end for decades and the results are already part of the equation, greater economy in vehicle consumption, development and promotion of mass transit, alternative fuels and all the rest. On these issues, one might argue that the hundreds of millions invested in wind turbine farms across the nation, mostly subsidized by your tax dollars, and around the world for that matter, contribute only 1 percent toward energy needs in a very few locations, and therefore is not a valid investment. Au contraire, the contribution of wind turbines is simply one part of a complex equation, but one that is necessary, along with the others, including nuclear energy.
Dr. Gardner makes the statement, that the Alaska drilling will do little more than increase Alaska’s revenues and those of select individuals. And so she would penalize 600,000 Alaska residents, 75 percent of who support drilling in the ANWR, because she feels differently than those citizens do? And just who are the select individuals she claims would be the only beneficiaries? She could not be referring to the millions of shareholders of British Petroleum, Chevron, AMOCO and a couple of other firms who propose to drill on a few acres out of millions, could she? She is not referring to the hundreds of thousands who will have gainful employment from this drilling, is she? The state of Alaska receives 85 percent of its revenues from energy production. Is she saying that the 600,000 citizens of Alaska do not gain?
That Alaska in the only beneficiary argument is equally weak. Each and ever gallon of fuel sold is subject to a federal tax at the gas pump. How much? The federal tax is 18.4 cents per gallon, and then there are the local and state taxes per gallon. In Texas, the total tax per gallon is 38 cents per gallon total (state and federal). And we haven’t even addressed the matter of the tens of thousands of jobs created locally in Alaska to support the operations, along with the couple of hundred thousand jobs elsewhere that will be created to support the operations – equally billions in income taxes and all the rest of the peripheral benefits.
Bottom line: Opening 2,000 acres out of 19 million is a small price to pay when it comes to supporting the common good which is that which stimulates growth and jobs, subsidizes the construction of the nation’s roads and mass transportation (the principal beneficiaries of each gallon taxed), supports the US economy and lessens our dependence on imported oil which, of course, contributes to our balance of payments deficit.
To borrow a phrase from another: Opponents of drilling in ANWR are lead by a bunch of rich urbanites in San Francisco, Los Angeles and New York who have never been to ANWR - and never will go there, because most of it is frozen, howling wilderness (another person’s words, not mine, so don’t shoot the messenger, Caesar).

Randy Black answered Phyllis Gardner: Arguing that a particular oil field can only contribute this or that (small) percentage to overall needs/ is perhaps the weakest argument one can make. Gene Franklin comments: Randy makes several good points, as usual, but I believe he skips over a very important point and that is balance between supply and demand. The Alaska Natural Wildlife Refuge option is entirely on the supply side. Why not couple it with dropping the truck/SUV loop hole in the fleet milage requirement? Why not include a bit more tax on gas to encourage drivers to use less? Why not ratchet up the fleet milage requirement? Reducing demand by nudging US drivers to buy more efficient vehicles will be a much longer term solution than the finite number of barrels found in ANWAR, whatever the number turns out to be.

Randy Black writes: I appreciate Gene Franklin’s positive feedback. On the matter of the SUV loop hole, I submit two comments: 1) The measures he would like to see are largely market driven in that higher gas prices will increase the desires of the driving public to choose vehicles with higher gas mileage, thus the higher gas prices are the de facto taxes he would like to see, and  2) On Dec. 22, 2004, the Bush administration proposed a major rewrite of the Corporate Average Fuel Economy (CAFE) program. One notable outcome of the proposal would be the closing of a loophole that currently exempts vehicles over 8,500 pounds, such as the Hummer H2, from any fuel-efficiency standards whatsoever.
Randy Black answered Phyllis Gardner: Arguing that a particular oil field can only contribute this or that (small) percentage to overall needs is perhaps the weakest argument one can make. That’s akin to claiming that adding one physician to a staff of 50 doctors at a large hospital or medical school will add only one to two percent to the staff’s effectiveness and or production. I surmise that if that one physician is a Dr. DeBakey (the cardiovascular surgeon who invented the concept of MASH medical units, developed Dacron arteries and artificial hearts), the contrary may be the case. Phyllis Gardner replies: Some of these arguments, though eloquently and cogently presented, do not make much sense in the long run.  For example, adding one doctor to 50 does not make much difference in the work flow of any individual doctor in the 50, all things being equal.  It is still a small percent of overall effort.  The argument for Dr. DeBakey simply doesn't apply unless there is some sort of superoil in ANWR.  More importantly, conservation, as noted by Gene Franklin, can easily bring about the same effect. 

RH: It is important that we try to figure out what OPEC is up to.  At its last meeting in Isfahan, Iran,  Saudi Arabia urged an increase in production, but met with opposition.   Iran and Venezuela are clearly conniving to use oil as way to weaken the US.

Randy Black writes: Phyllis  Gardner asks interesting and valid questions, particularly her questions/comments about the amount of oil that may be available in the limited (2,000 acres) area that will be explored in the ANWR. Let’s start at the beginning of the ANWR. Here is the part (most) opponents of drilling there don’t want you to know:

At the time Congress doubled the size of the ANWR under the leadership of Jimmy Carter, one significant sliver of it along the coastal plain, known as the 1002 area, was not included as protected. Congress specified further study of that portion for its oil and gas production potential. Today, the largest untapped onshore energy reserve in this country is made up of roughly 2,000 acres of the 1002 area. Footnotes (1) and (2)

In short, section 1002 was originally meant to be drilled in. That is what the current legislation is all about. Something that the Congress meant to happen all along. Period.
Here are a few facts about the amount of oil thought to be in the region of the ANWR that will be exploited. It is thought to be the largest oil reservoir in the United States.(1)
The proponents, those in favor of drilling for oil, predict there are up to 16 billion barrels to be recovered from under the land. In contrast, experts who are opponents to drilling, argue that there are less than 4 billion barrels. This is a large difference. Each group has data to support their estimates. (ibid)
Most sources that I have found predict at least one-two million barrels per day from the ANWR will be produced. That does not include the natural gas production that will also impact the bottom line to consumers… eventually.
One source says that a million gallons a day from ANWR would reduce needs for importing oil by 9%. (ibid)
"The people in this room know better than me, but I've been told that the structures indicated on seismic beneath ANWR are the largest ever seen in the continental United States," he said. "The USGS reports that the most likely estimate for recoverable reserves in ANWR is 10 billion barrels of oil.(2) (Joe Barton, US Congressman.)
In 2001, of the $360.2 billion in our balance of trade deficit, $101.5 billion was for imported oil (we paid $112.4 billion for imported oil). The estimated resources of oil in ANWR could easily replace the oil we import from Saudi Arabia alone for more than 30 years.(3)
Drilling in a tiny area of the Arctic National Wildlife Refuge (ANWR) will not only significantly increase our domestic supply of oil and gas, but also will generate more than 750,000 American jobs and result in tens of billions of dollars in royalties and tax revenues.(3)
Perhaps one of the more important factors involved with drilling in ANWR is that there is that, according to the U.S. Geological Survey, there is a 90% chance that ANWR contains 65Tcf of natural gas. The demand for natural gas is on the increase; therefore, having an increase in domestically produced gas is important since we do not have the ability to import gas to the same degree as we import oil - it requires drilling and production on U.S. soil. Another reason given for not drilling in ANWR is that we should save the oil and gas for when it is really needed. It is needed now. Unfortunately it will take from five to 12 years for production to actually begin in that frontier area. It should be pointed out that even if there was not very much oil there, our national oil supply comes from 550,000 wells producing an average of 10.8 barrels of oil a day. Every economically viable source of new oil is crucial to the health and safety of the citizens of this nation.(3)
For an in depth view of the matter from the view of the Stateof Alaska, go to:
Randy Black corrects his statement about Alaskan oil: One source says that a million gallons a day from ANWR would reduce needs for importing oil by 9%. It should read a million barrels a day, not gallons.
Phyllis Gardner writes: What about the fact that any oil found there would contribute to less than 1-2% of our daily consumption, that at least 50% and possibly 90% of the revenues would go to Alaska, that Alaska is lobbying to sell the oil abroad for the highest bidders, so that the contribution to our energy requirement and price reductions is virtually guaranteed to be minimal.  How about the fact that simple conservation measures would have better yield, that China and India are imposing huge new markets for oil that will drive prices inevitably far up even if and when in the next few years a tiny bit can be extracted from ANWR?  Why don't we put much more resources into energy conservation and alternative energy sources.  The latter could lead to an innovation boon, one we sorely need as high tech, and now life science, highly skilled workers are increasingly being drawn from Asia?

What is the point of drilling in ANWR - it will change the situation for the nation little, if at all, while grossly endangering the environment (I guess I believe the experts that are widely quoted).  It seems that it will do little more than increase Alaska revenues and those of select individuals.

Ronald Hilton 2005


last updated: April 13, 2005