Oil economics and ANWR

 A new Alternet article, Bad News at the Pump: The Dangerous Implications of $100-Plus Oil, is a reminder of the global oil economics at work and the ever increasing problems that will probably keep prices rising swiftly.  Some numbers of interest brought out in the article: the U.S. relies on petroleum for approximately 40% of its total energy supply, …nearly two-thirds of its crude oil must be imported

If oil remains at or above the $100 per barrel mark in 2008, and, as expected, the United States imports some 4.75 billion barrels of the stuff…

And some numbers and and an economist’s bottom line about ANWR (from The Oil Market and Drilling in the Arctic National Wildlife-pdf):

The Department of Energy’s Energy Information Service (EIS) predicts that production from ANWR would average about 800,000 barrels per day (the EIS estimates that ANWR’s oil would increase the volume of production by about 0.7% in 2020). That production would be about 1% of the worldwide oil production, which averaged about 82 million barrels per day in 2004 (and was slightly higher in 2005 and 2006).

A report of the U.S. Department of Energy predicted that ANWR drilling could lower the price of oil by about 50¢ a barrel or 1%, given that the price of a barrel of oil was slightly above $50 at the beginning of 2007. Severin Borenstein, an economist who is the director of the U.C. Energy Institute, concluded that ANWR might reduce oil prices by up to a few percentage points so that “drilling in ANWR will never noticeably affect gasoline prices.”

 And here are some figures from a USGS ANWR oil estimate from 1998:

The total quantity of technically recoverable oil within the entire assessment area is estimated to be between 5.7 and 16.0 billion barrels (95-percent and 5-percent probability range), with a mean value of 10.4 billion barrels. Technically recoverable oil within the ANWR 1002 area (excluding State and Native areas) is estimated to be between 4.3 and 11.8 billion barrels (95- and 5-percent probability range), with a mean value of 7.7 billion barrels. 

Noteworthy here is that the low end estimate of total recoverable oil from ANWR is less than how much oil we are predicted to import this year.  The bottom line:  our state and federal goverment needs to stop spending our tax money fighting to squeeze the droplets of oil left in the country and should instead be putting that and a wealth of other funds into alternative energy development, subsidization, and the shifting of infrastructures away from complete oil dependence.

~ by Matt on March 15, 2008.