American Geological Institute

Government Affairs Program

Arctic National Wildlife Refuge (ANWR)-New Petroleum Estimates (6-2-98)

Congress created the Arctic National Wildlife Refuge (ANWR) in 1980 through the Alaska National Interest Lands Conservation Act. ANWR extends over 19 million acres and is the s econd-largest refuge in the United States. Although drilling has never been allowed in the refuge, Congress left open that possibility in section 1002 of the Act, which concerned the treatment of 1.5 million acres of the northern Alaskan coastal plain. The plain encompasses territory between the Brooks Range and the Beaufort Sea. Any type of oil and gas study within ANWR has to be performed without drilling.

Recently at the annual convention of the American Association of Petroleum Geologists (AAPG), geologists with the United States Geological Survey (USGS) announced the results of the petroleum evaluation of the arctic refuge. For the past three years, 40 USGS scientists collected and processed new geophysical information and new well and sample dat a around the 1002 area. Resource reports and nearby drilling outside ANWR have indicated the potential economic importance of this area. In fact, 15-16 new wells, located about 15-20 miles from the 1002 area boundary, yielded information which had previo usly been unavailable. Approximately 1400 miles of old seismic data were re-analyzed giving geologists a better understanding of the amount of petroleum available.

In assessing the amount of oil, scientists used basic geology, recovery factors, and costs to determine economically retrievable resources. From this analysis, geologists discovered that the recoverable oil is n ot uniformly dispersed in the 1002 area. The amount of technically attainable petroleum resources ranges between 4.3 and 11.8 BBO (95% and 5% probablities). This estimate exceeds earlier calculations because of the improved resolution of the reprocessed seismic data. Furthermore, the USGS concludes that 2.4 BBO are economically recoverable at $18 per barrel, while 3.2 BBO are economically recoverable at $20 per barrel. No oil is economically retrievable at a market price less than $15 per barrel.

Supporters of drilling claim that a settlement must be reached soon because there is a possibility that the Trans-Alaskan Pipeline System could close in the future due to insufficient oil passage. Another issue at stake is America's dependence on foreign oil. Proponents claim that this dependence only increases the need to extract in the 1002 area.

Environmentalists counter that short-term oil reserves are not the way to handle America's dependence on imported oil. However, their biggest concern f ocuses on the destruction to the whole arctic ecosystem and habitat. Conservationists worry that the pollution created from drilling would threaten the reproduction of the caribou, the fragile population of polar bears, and other wildlife. A study perform ed by the Clinton administration in 1995 found that oil operations in ANWR would significantly threaten the wildlife habitat.

In response, representatives for the oil industry argue that they have developed technological advances allowing companies to retrieve large amoun ts of oil from fairly small surface areas. In addition, waste disposal and spill response methods have improved. Such advancements might expand the amount of political attention given to ANWR.

The new discovery of the additional oil could increase po litical pressure on the Clinton administration. Although the White House is not likely to change its anti-drilling stance, Alaska's powerful congressional delegation (who chair the Senate Appropriations, Senate Energy and Natural Resources, and House Reso urces Committees) supports the opening of the 1002 area for drilling. Presently, the area can only be opened by an act of Congress. During the 104th Congress, a budget bill, H.R. 2491, include d a provision that attempted to allow oil operations in the refuge. Yet, the entire body was vetoed by President Clinton. Although the issue of opening the refuge seemed dead, the new information published by USGS could rekindle the debate.

Sou rces: AAPG Explorer, Congressional Research Service Reports, Environment and Energy Briefing Book, United States Geological Survey, Washington Post

Please send any comments or requests for information to the AGI Government Affairs Program.

Contributed by Shannon Clark, AGI Government Affairs Intern
Posted June 2, 1998

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