Posted on 05/27/2008 10:27:18 AM PDT by Red Badger
ANWR production would peak in 2028 (ten years after the start of production). Click to enlarge. Source: EIA
The opening of the Arctic National Wildlife Refuge (ANWR 1002 Area) to oil and natural gas development would result in additional oil production of a peak 780,000 barrels per day in 2027, according to the mean case developed by the Energy Information Administration in a revised assessment of ANWR potential. That would result in trimming $0.75 (in 2006 dollars) off the projected cost of a barrel of oil, according to the EIA.
In an assessment of ANWR four years ago, the EIA concluded that ANWR production would peak, in the mean case scenario, in 2024 at 870,000 barrels of oil per day. (Earlier post.) EIA revised its earlier assessment in response to a request from Alaska Senator Ted Stevens.
Opening ANWR would drop US dependence on imported oil in 2030 by 3 percentage points in the mean case—from 54% to 51%. The high and low resource cases project a 2030 oil import dependency of 48% and 52%, respectively. Click to enlarge. Source: EIA
The new analysis—like the earlier one—assumes production begins 10 years after the opening of the area to development via enabling legislation. The primary constraints to a more rapid development of the ANWR oil resources are the limited weather “windows” for collecting seismic data and drilling wells (a 3-to-4 month winter window) and for ocean barging of heavy infrastructure equipment to the well site (a 2-to-3 month summer window).
The assumed timeline is as follows:
*
2 to 3 years to obtain leases, including the development of a US Bureau of Land Management (BLM) leasing program, which includes approval of an Environmental Impact Statement, the collection and analysis of seismic data, and the auction and award of leases. *
2 to 3 years to drill a single exploratory well. Exploratory wells are slower to drill because geophysical data are collected during drilling, e.g., rock cores and well logs. Typically, Alaska North Slope exploration wells take two full winter seasons to reach the desired depth. *
1 to 2 years to develop a production development plan and obtain BLM approval for that plan, if a commercial oil reservoir is discovered. Considerably more time could be required if the discovered oil reservoir is very deep, is filled with heavy oil, or is highly faulted. The petroleum company might have to collect more seismic data or drill delineation wells to confirm that the deposit is commercial. *
3 to 4 years to construct the feeder pipelines; to fabricate oil separation and treatment plants, and transport them up from the lower-48 States to the North Slope by ocean barge; construct drilling pads; drill to depth; and complete the wells.
The analysis also assumes sequential development of fields, with new fields in ANWR beginning development 2 years after a prior ANWR field begins oil production. The decision to use a 2-year time lag in bringing ANWR fields into production is driven by four factors, according to the EIA:
1.
The large expected size of the ANWR fields, which complicates the logistical problems associated with their development. 2.
The required considerable investment infrastructure to begin production in these fields and to link these fields to the TransAlaska Pipeline System (TAPS). 3.
Competition in investment and drilling resources from other domestic and foreign projects, which potentially limits the resources available for ANWR development. 4.
Increasing the rate of ANWR development might also require an expansion of TAPS throughput capacity.
In the new low and high ANWR oil resource cases, additional oil production resulting from the opening of ANWR peaks in 2028 (10 years after the beginning of production) at 510,000 and 1.45 million barrels per day, respectively. Between 2018 and 2030, cumulative additional oil production is 2.6 billion barrels for the mean oil resource case, while the low and high resource cases project a cumulative additional oil production of 1.9 and 4.3 billion barrels, respectively.
Crude oil imports are projected to decline by about one barrel for every barrel of ANWR oil production. Opening ANWR results in the lowest oil import dependency levels during the 2022 through 2026 time frame, when oil import dependency falls to the minimum values of 46 and 49% for the high and low oil resource cases, respectively. During that timeframe, the mean resource case and AEO2008 reference case project an average oil import dependency of 48 and 51%, respectively.
Because ANWR oil production is declining after 2028, US oil dependency rises to 51% in 2030 in the mean resource case, compared to 54% in the AEO2008 reference case. The high and low resource cases project a 2030 oil import dependency of 48% and 52%, respectively.
Additional oil production resulting from the opening of ANWR would be only a small portion of total world oil production, and would likely be offset in part by somewhat lower production outside the United States. The opening of ANWR is projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, light crude oil prices of $0.41 per barrel (2006 dollars) in 2026 for the low oil resource case, $0.75 per barrel in 2025 for the mean oil resource case, and $1.44 per barrel in 2027 for the high oil resource case, relative to the reference case.
The EIA projects world oil consumption will be 117.6 millions barrels per day in 2030.
The steady rise in oil prices has re-energized efforts in Congress to open domestic oil and gas resources for exploration and production. Among the legislation proposed is a bill co-sponsored by Representative Roscoe Bartlett (R-MD), who had formerly opposed opening ANWR for exploration.
The American Energy Independence and Price Reduction Act (H.R. 6107), introduced by Rep. Bartlett and Rep. Don Young (R-Alaska), would use revenues from the ANWR leases to fund a variety of alternative and renewable energy programs. The bill assumes production will come online in 5 years.
I have resisted drilling in ANWR because I believe that these oil reserves are like money in the bank that is yielding huge interest rates. I don’t think you ought to rush to the bank and pull it out and spend it. Today, with oil at $134 per barrel, there is obviously no surplus energy or capital to invest in alternatives. I am joining as an original cosponsor of this new bill because it dedicates the entire federal share of revenues from ANWR to increase federal investments in the research, development and production of cleaner domestic, alternative and renewable sources of energy, energy efficiency and conservation.
Of course, it is impossible to drill without some environmental impact. However, I have been to ANWR. I am convinced that the environmental impact will be minimal. —Rep. Bartlett
Bartlett has been a consistent voice in the House about the issue of Peak Oil.
Resources
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Analysis of Crude Oil Production in the Arctic National Wildlife Refuge May 2008 (EIA)
So if congress believes 70,000 BPD not going into the SPR is going to help up, how much help do they think 870,000 BPD would provide?
Good question. I must add that question to the ever growing list of questions that will NEVER be asked by a DBM reporter of a Congresscritter or presidential candidate.......
The lib mindset is the same, top to bottom. That is, incremental improvement isn’t tolerated. All or nothing.
At the bottom:
“That $10/hr job isn’t going to help me, so I’ll just sit here and whine about how little welfare pays me!”
At the top, (or higher up, anyway):
“Drilling ANWAR won’t solve the problem, in and of itself, therefore, it’s not worth doing.”
Or as Wasserman puts it:
“We can’t drill our way out of this!”
Morons all.
If the US increased the use of clean coal, nuclear and alternatives the 3 million barrels a day would actually reduce further the amount of petroleum imports. If we could get down to just 35-40% imports then we as a nation could select who we buy from based on their friendliness to the US.
Interesting that half of the 10year wait is due to bureaucracy. I’m sure we can cut that by 4yrs 6mos if we really wanted.
Just like I’m sure we could probably drill in the winter.
Given that we are an oil-poor country (only 2-3% of the world’s reserves) and that ANWR’s maximum production would have a negligible effect of oil prices, IMO the best way to look at ANWR is as the ultimate “strategic petroleum reserve”: better to pay the extra $.75, pump someone else’s easily extractable reserves dry, and leave this to our children and grandchildren as a backup for truly critical liquid petroleum needs.
Interesting that half of the 10year wait is due to bureaucracy. I’m sure we can cut that by 4yrs 6mos if we really wanted.
Just like I’m sure we could probably drill in the winter.
That is a very low number. If the US showed we were really serious about oil production in ANWR and in the Gulf, oil prices would plummet.
I think they have to do the drilling in the winter.
“That is a very low number. If the US showed we were really serious about oil production in ANWR and in the Gulf, oil prices would plummet.”
BINGO!
OPEC is a drug dealer, oil is the drug, we are the junkie. OPEC wants our habit to hurt us, but not kill us, or make us want to quit. OPEC watches us, and if it looks like we are moving toward viable alternatives, then OPEC drops the price. OPEC doesn’t want to have their best junkie weaning itself.
That’s why the shiek visiting Ecuador last week said OPEC wasn’t happy with gas prices. They truely aren’t. Not because they like us, but because they need us to stay hooked.
Perfect analogy.
How about a quick list...
It will need to be a multi-facetted action plan. It is a real crisis and it is in our faces and ignorant government policy and inaction let it happen. The real solution lies in attacking the problem from various directions. Allow me to provide details...
Explore and drill, east and west coasts and Alaska. And yes, that includes YOU Californians. You ain`t nothing special, except maybe "special-ed." Besides, you need the money because your state is going bankrupt from all the illegal aliens you won't get rid of.
Develop the rather massive oil reserves contained in the Bakken Formation
Build modern technology refineries
Build modern technology Nuke power plants
Build modern technology clean-coal power plants
Open the clean coal deposits Klinton “closed” which contains 62 BILLION tons of environmentally safe low-sulfur coal from the Kaiparowits Plateau in Utah.
Slowly but steadily increase the Corporate Average Fuel Economy (CAFE)
Tax breaks to companies developing bio-diesel techniques that create fuel from cheap waste.
Tax breaks and investment perks for moderate temperature geothermal ORC power plant technology that operates off industrial waste heat / geothermal applications to generate power directly and run at 90% efficiency, without impacting oil and gas production.
At 400kW per unit you just line up as many as you need for a small community. Quiet and extremely clean.
Just how can we do this the simple, easy, smart way? How do we get away from the ignorance of ethanol? And from CORN no less?
The President must lead.
If the President were to announce this program tomorrow and clearly state that due to the necessity of averting a disaster to the economy and a threat to National Security he will emplace Executive Orders that will not only immediately initialize this overall program but exempt it from excessive or unnecessary environmental regulatory agencies rules where do you think the hedge fund speculators will go, thus dropping the market price of crude by roughly 50 bucks?
They will go straight to that new market of energy production and the companies that will build it, the new technologies that will emerge, as a well functioning "new energy industry" SHOULD be that inviting. Not only will the price start to drop immediately, the very nature of new industry gains and emerging technologies will keep the price down. And, as always, when other nations began to utilize the new and more efficient (higher profit margin) techniques the overall demand will slow.
This may be an unpopular opinion, but I think we need to leave our reserves in the ground. We should squander all the rest of the world’s oil before tapping our own.
That has been proffered before, but a “reserve” is to be made available quickly. To even start drilling will require sever years of exploration. All that must be done in advance........
Most Alaskan North Slope Construction and exploratory drilling is already done in the winter.
I saw these stats & the graph about a week ago while doing some research on the issue. I came to the conclusion that we cannot pump enough oil domestically to meet current demand, and never will be able to.
The only way out of our current foreign oil dependency, and yet maintain our standard of living, is a comprehensive multi-faceted plan.
1. Drill everywhere now to soften economic impact of plan below.
2. Shift all electric generation to nuclear.
3. Build refineries capable of converting coal into gasoline.
4. As nukes come on line, shift coal production to conversion to gasoline in the liquification plants.
I think it is foolish to fund our enemies and give them the monetary resources to develop the next economical method of fuel. We didn't stop using sails and smokestacks on our ships because we run out of wind and coal.
While we do that, we'll be pumping our wealth to terrorist-funding states, who will be our undoing long before we get to the point of being able to use that untouched domestic oil.
From a global supply perspective, the more aggressive we initially appear, the more oil futures will pop. And if we follow thru to the actual drilling/refining part, we'll do ourselves and western civilization a favor to boot.
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