Artic National Wildlife Refuge - Is Drilling for Oil Worth?

Artic National Wildlife Refuge

Is Drilling for Oil worth

The decision to drill for oil in the Artic Wildlife Refuge has been contested over the last fourteen years. Some governmental officials want to expand this exploration to decrease foreign dependence. While environmentalists argue that the damage to the environment will be too great a price to pay for the little recoverable oil which, in the long run will not help America become more self sufficient. However, the debate has overlooked some key questions. Does drilling make sense economically? Is security really an issue? Finally, does it make sense to drill in the Artic considering the vulnerability of the pipeline and the potential for environmental damage? After considering the case from both angles, is apparent that drilling does not make sense and should not be permitted.

Those who feel that America should drill for oil in the Artic Wildlife Refuge include certain government leaders and oil companies. They do have some good points to support their position. With America being the largest consumer of oil, their dependence on foreign oil is currently at sixty percent of its consumption. It is expected to increase to seventy-five percent by 2025 (Petroleum Economist 1+). This reliance on foreign oil is becoming a threat to American security some American government officials have stated. The drilling for oil in the Artic Wildlife Refuge will enable the United States to become more self-sufficient. Recent studies have indicated that approximately 3.2 billion barrels of profitable oil exists in the Artic Refuge (Lovins 72+). These estimates mean that this production would be between 0.5 percent to 1.3 percent of overall global production (Petroleum Economist 1+). This would reduce U.S. oil dependence by four percent by 2025(Petroleum Economist 1+). It would also add much needed domestic oil production as other areas, such as offshore drilling decline.

In Alaska, politicians favour drilling beneath the Artic National Wildlife Refuge for tax revenue (Oil & Gas Journal). The Prudhoe Bay Project which is America’s largest oil field has created hundreds of jobs for Alaskans. This will only continue with construction of another oil field. As Alaska is dependent on its rich resources, it needs to keep exploring and discovering new sources of income if the state is not to become financially dependent on mainland America.

Another benefit to be found in drilling in the Artic is that it will reduce the huge U.S. trade deficit, which is running at an all time high. One of the main reasons that the trade deficit has risen so drastically is that in 2005, the price of oil has climbed to an all time high of $70 U.S. dollars a barrel. The ability to increase drilling and further exploration in the Artic will have a chain effect in reducing the trade deficit; become less dependent

on foreign oil which will cause the price of oil per barrel to come down because of a surplus of oil.

An area of concern with environmentalists is damaging the fragile ecosystem in the Artic National Wildlife Refuge. The American Petroleum Institute has countered that it can do oil and gas exploration without damaging the Alaskan Tundra as shown in the newly developed Alpine Oil project on Alaskan state lands. Also the Prudhoe Bay oil development proves that the industry can safely drill in an Arctic environment.

However, environmentalists believe that the Artic refuge does not hold a large enough deposit of oil to make it economically worthwhile. Even if the extract of oil took place, it would only reduce Americans dependence on imported oil by a few percentage points (Lovins 72+). Another thing to consider is that the time it would take to build a refinery and extract the oil would be ten years (Petroleum Economist 1+). Who knows what new sources of fuel would be discovered by then. Also the environmentalists point out that studies have shown that the majority of oil deposits are outside the refuge. The North Slope already has commercial operations that are extracting the oil. Therefore there is no need to drill in the Refuge.

With the Artic National Wildlife Refuge located in the Artic Circle reliable delivery has been a problem compared to anywhere else in the world. Even building a pipeline to connect to Trans-Alaska Pipeline has been priced at $10 billion to build (Lovins 72+). Major oil companies such as Chevron, BP and Conoco Phillips have left seeing no prospect in making it economically feasible, only Exxon Mobile is left (Petroleum Economist 1+).

In looking at the history of the Trans-Alaska Pipeline (TAPS) it is obvious that