The Alaskan Oil ConIlict: Is drilling in Alaska`s NWR

Forthcoming?
Austin Schader
Pols 112
Allen K. Settle
12/03/09

Problem - Is Drilling in Alaska`s National WildliIe Reserve Forthcoming?

Purpose -
The objective oI this paper is to provide a brieI overview oI why and when the United States oI
America should drill in Alaska`s National WildliIe ReIuge and provide a brieI history oI the
actions that have taken place already regarding why and when we should drill in the reIuge.

Introduction - Why should we worry about oil Consumption?

As America consumes more and more oil annually Ior everything Irom cars to plastics to make-
up the question arises, 'How will America satisIy its insatiable appetite Ior oil and where will all
this oil come Irom? The answer: Mostly Irom Ioreign importing, however, one source in the
Iuture could be Alaska. According to the United States Department oI Energy the United States
consumed about 20.68 million barrels oI oil per day in 2007. Five-million barrels come Irom
domestic production while the other IiIteen-million are imported as raw crude or oil derived
products.

The United States census Bureau projects the United States population to rise to 394 million
people by 2050. This means there will be an additional 60 million people in the U.S. all wanting
to consume the same amount as we currently do. Current oil reserves are not growing only
shrinking which Iorces the U.S. to decide on how it is going to deal with its current demand
crisis in the Iuture. The law oI supply and demand will Iorce Ioreign producers to raise prices as
demand increases which in turn will Iorce U.S. consumers to either cut-back or pay much higher
premiums Ior the same amount oI product. This leads many Americans with the desire to seek
domestic sources Ior our current oil demand and Ior Iuture demands and as an eIIect the question
oI drilling in Alaska is posed.

istory - Conservation and drilling eIIorts in Alaska

'Should the United States drill Ior more oil in Alaska? is not a new question. Almost since
Alaska`s inauguration into statehood on January 3
rd
1959 the United States has wanted to seek
the natural resources Iound in Alaska and in the oceans along the coast oI Alaska. Seven years
later the Iight over Alaska`s natural resources began as Alaskan natives protested the leasing oI
land on its northern slopes to Iederal oil and gas companies. The leases were immediately Irozen
and the dispute was Iinally settled in the Alaskan Native Claims Settlement Act oI 1971. This act
in short gave the natives ownership oI approximately 1/9 oI all Alaska in exchange Ior their
cooperation in developing the other 8/9 oI the state Ior Iederal government and private corporate
use. Between the time oI the disputes and the Alaskan Native Claims Settlement Act oil was
discovered in Prudhoe Bay.
In 1973 The United States began Iacing a huge oil shortage known as the 1973 oil crisis which
created a more economically Ieasible situation and spurred the development drilling in northern
Alaska and oI the Trans-Alaskan pipeline. The pipeline was completed in 1977 and began Iull
scale operation later that year. This was the beginning oI the end oI Iuture oil development in the
region as a wave oI conservation bills were passed.
The Iirst major bill passed was the Alaskan National Interest Land Conservation Act which was
passed December 2
nd
1980 which protected 104 million square acres oI land Irom Iederal
development in the state. This started the creation oI Alaskan National WildliIe ReIuge or
ANWR. This bill also allowed Ior the drilling oI oil in ANWR with prior approval by congress.
Section 1002 oI the bill called Ior an inventory oI the Iish and wildliIe resources to be assessed
without the use oI exploratory drilling. From this survey it was determined 144 thousand square
acres should be opened Ior exploratory drilling based on good signs oI possible oil reservoirs,
however, this Iaced major opposition. AIter the bill was passed both those opposed and in Iavor
vowed to change the terms during the Iollowing session oI congress.
Following the passage oI the Alaskan National Interest Land Conservation Act in 1986 The
United States Fish and WildliIe Service created a draIt report in Iavor oI opening the coastal
plain oI ANWR up Ior drilling. Statements in the report explain that the United States` economy
and national security were put into jeopardy and opening the coast would help cure the situation.
Conservationalists argued that opening the land would put several native Alaskan species in
danger including the porcupine caribou and could threaten other Iuture species. The results oI
this conIlict turned into law in 1987 when a joint eIIort by the United States Government and
Canadian Government passed the 'Agreement on the Conservation oI the Porcupine Caribou
Herd setting standards on what activities a country could perIorm in regions where the caribou
reside and requiring an impact assessment beIore those activities could be perIormed.
In 1989 a drilling proposal was going through the house when the Exxon Valdez oil spill
occurred, which, while not directly even linked to drilling prompted a delay and ultimate killing
oI the bill. The spill, which involved a huge oil tanker carrying 50 million gallons oI oil, spilled
10.9 million gallons oI oil into the Prince William Sound, costing Exxon mobile approximately 2
billion dollars in cleanup and killing up to 500,000 seabirds as estimated by scientists cleaning
up the spill. AIter the drilling bill was rejected drilling would not make any major steps Ior the
next Iew years until the senate and house were both reclaimed by the republicans.
AIter republicans did reclaim both the house and senate in 1996 they passed a bill in both houses
that would allow Ior drilling in ANWR but President Clinton vetoed the bill. This is the closest
any bill has come to being passed that would allow Ior drilling in Alaska up until today. Several
other notable bills were pressed throughout the 2000s but none have passed in both houses. One
attempt worth noting is the attachment oI a drilling bill to the annual deIense appropriations bill
in 2005. It was successIully philibustered by democrats in the senate.
With President Obama`s takeover oI the presidential seat and a democratic controlled house and
senate currently it appears the current laws governing Alaska and ANRW will stay in aIIect at
least until the 2010 voting session. The near Iuture as the past looks as though major changes to
ANRW in the direction oI drilling will only occur iI it becomes economically Iavorable Ior
several corporations or the Iederal government to make large amounts oI money oII oI drilling in
Alaska similar to the Alaskan pipeline in 1974 aIter the oil crisis oI 1973 or a large scale disaster
or shiIt in politics occurs.
stimates and Important Facts - Oil Reserves, Drilling Research, Global Impact
In 1998 The United States Geological Survey estimated Oil reserves along the ANWR coast
between 5.7 billion barrels to 16 billion barrels oI non-proven reserves. As comparison the Trans
-Alaskan Pipeline has moved as oI 2009 just under 16 billion barrels oI oil total in its 32 year
liIespan. The United States Department oI Energy estimates total U.S. proven oil reserves at 21
billion barrels oI proven crude oil and 120 billion barrels oI unproven reserves and world proven
reserves at 1.1 trillion to 1.3 trillion barrels. Production Iigure per day are estimated between
510,000 barrels per day at its lowest to 1.45 million barrels at its highest by the United States
Department oI Energy. Remember the United States consumes just over 20 million barrels per
day, 5 million domestic, 15 million barrels in Ioreign imports. While total production does not
seem much at the high end it would provide over 20 more domestic production Irom the
United States towards its own oil consumption needs.
Total impact oI opening ANWR to drilling is once again estimated by the United States
Department oI Energy as being between .4 to 1.4 oI the total world`s oil production. The
impact oI ANRW on global prices could easily be mitigated by The Organization oI Petroleum
Exporting Countries or OPEC just by simply reducing their total output and utilizing the law oI
supply and demand, however, more control would be asserted over the oil market by The United
States and U.S. oil producing companies. This begs the question, 'Would you rather be ripped-
oII by Ioreign oil producing companies or ripped oII by domestic producing companies at the
expense oI the degradation oI our own natural wonders?
Possibilities Overview - Drill? Don`t Drill? How Soon?
The question still remains, 'Should the United States Government allow Ior more drilling in
Alaska`s ANWR and when should they open up Ior the drilling? This leaves us with only Iour
possibilities: We should drill now (0-10 years), we should stave oII drilling until the near
Iuture(10-50 years), we should stave oII drilling into the distant Iuture (50 years), or we should
not drill at all ever.

It should be note beIore beginning to select any oI the option listed above there are a Iew Iacts
we should consider in addition to just production numbers. Most Republicans Iavor drilling
while most Democrats do not Iavor exploring Alaska Ior drilling. 2008 Election Results Ior
Alaska show that the state is 59 Republican and only 38 democrat. According to ANWR.org
75 oI randomly surveyed Alaskans Iavored opening up ANWR to drilling exploration in 1995.
1996 election results show that Alaska at that time was 50 Republican and 33 Democrat. In
addition ANWR.org sites that most major congressional representatives and governors Irom
Alaska in the recent decades have supported opening up ANWR to drilling and oil exploration.

The International Energy Outlook 2008 shows that in 2005 The United States produces 36.7 oI
its total energy demand in oil and only 7.7 in renewable energy sources. The total oil required
is supposed to expand by 2030, however, the percent oI total energy produced by oil is supposed
to drop to only 33.0. This means that oil will still play an extremely vital role in our Iuture as
an energy supplier. According to Gibson consulting online world oil peak production will occur
somewhere between 2005 and 2035. At that point exploration oI new sites and current
production will no longer meet current demand. This will most likely cause price surging and an
oil crisis as many oI the major consumers scramble to compete Ior the worlds providers.

Three oI today`s oil companies control Iourteen or more oI the original 35 standard oil
companies that were subjected to being broken up in 1911 when they were accused oI being a
monopoly and subjected to anti-trust laws. This shows that the iron law oI oligarchy still applies
as the companies begin to once again monopolize. Because oI the monopolizing oI the oil
companies, iI ANWR is opened it we can be certain these companies will claim part oI Alaska`s
oil and will be able to manipulate prices just as they see Iit.

All oI this amounts to a total oI only Iour possibilities as stated above Ior the oil residing in
ANWR. drilling now, drilling in the near Iuture, drilling in the distant Iuture, and never drilling
at all. While each has its pros and cons it all comes down to three main Iactors; economic
incentive, political views, and social views.

rilling Now - Drilling within the next 10 years

Drilling now would be in short a challenge. There are several political, economic, and social
barriers keeping drilling now or in the near Iuture Irom being Ieasible. With a Democrat
controlled house Democrat controlled Senate and a Democrat President. As stated above almost
all Democrats oppose exploring ANWR Iurther let alone allowing drilling. The United States is
also undergoing a huge transition into trying to make everything 'Green or recyclable or
renewable. America is slowly trying to wean itselI oII oI Iossil Iuels and seek alternative
resources and renewable energy alternatives and more oil is only going to Iurther stimulate the
problem it is trying to cure. Drilling in ANWR would be doing the exact opposite and be
extremely counterproductive to the current ideal oI society.

AIter the 2010 election it may become more possible iI the Republicans regain control oI one or
both oI the sessions oI congress, however, there is little hope in the near Iuture Ior the support to
go against the ideals oI the public when in the past it could have occurred much more easily
under earlier administrations such as the Clinton era. As stated above currently drilling in
ANWR Ior unproven reserves does not pose as great an economic incentive Ior major companies
to put Iorth the eIIort into going through the necessary lobbying and startup costs Ior a major
new drilling exploration in Alaska. Drilling now is just not economically Ieasible, politically in
Iavor, or parallel to society`s ideals, and it would take a major world changing Iactor to cause
urgent need to drill in Alaska`s ANWR.

rilling in the near Future - Drilling 10-50 years Irom now

Drilling in the near Iuture is Iar more Ieasible than in the now Iuture. There are more likely to be
Iar less Iactors keeping drilling Irom being Ieasible. There will not need to be a major global
change to make oil more economically enticing because a huge change is already going to occur
within this timescale. When we hit the stage oI peak production between the years 2005 and
2035 and the turning point, as stated above, there should be a massive shiIt to alternative Iuels as
the price oI gas skyrockets to the point where gas becomes unaIIordable to a large portion oI the
population. Politically it should become Iavorable along with societies views once the U.S. Ialls
into a minor panic because oI not being able to aIIord the high prices oI Ioreign oil.

Also it will become more economically Ieasible as the price oI a barrel oI oil skyrockets Iar
above levels we have seen today. This should interest the large oil companies in towards the start
oI the panic beIore the price oI oil drops because oI alternative Iuels. It could serve as a
temporary crutch Ior the United States during the switch to alternative Iuels but it is more than
likely the environment will take a huge toll as rapid development with minimal restrictions Ior
environmental concerns occurs as a crisis/panic situation develops at the initial thought oI not
having enough supply to meet the demand. It becomes much more Ieasible than drilling now in
the near Iuture as social views shiIt, along with political perspectives, and economic Ieasibility.


rilling in the istant Future - Drilling 50 years Irom now

Drilling in the distant Iuture would also be more Ieasible than drilling now but Ior diIIerent
reasons than drilling in the near Iuture. Drilling in the Iar distant Iuture may or may not
politically oI Iavor depending on what party control the government. It should become Iar more
Ieasible as a whole as our dependence on oil lessens and we gain Iurther control over how much
we as a human race pollute into the environment.

When our source Ior Iuel Ior transportation Iinally shiIts and oil becomes more obsolete as a
source Ior energy and shiIt to being only necessary Ior things such as plastics, social views about
oil should drastically shiIt. Companies may become more interested in oil and petroleum Ior
reasons such as advances in technology. The views oI society should shiIt to accompany the lack
oI pollution produced by oil products. Oil will be seen more like steel or concrete or another
natural resource instead oI as an energy source.

Advancements in drilling techniques and oil extraction should also prompt Ior less
environmental impact iI The United States were to drill in ANWR. Also depending on how
much oil we have already used it may become even more oI a Iinite resource in the distant Iuture
than in the near Iuture as the total supply becomes Iar less than it was previously. This could
create a more cost eIIective scenario Ior investors and companies who wish to invest in the actual
exploration and drilling oI ANWR.

void rilling altogether -

The question oI whether or not we should avoid drilling altogether has been posed since the
debate about why and when The United States oI America should drill in ANWR began. Most
conservationalists say we should create a national monument out oI the reIuge and Iorget it as
being a potential resource at all. While politically eIIorts have been made to transIorm ANWR
into a national monument have been made none have been IulIilled. President Clinton vowed to
make it a national monument during his reign in the 1990s but never end up succeeding.

Many economists, Republicans, and those opposed to completely avoiding drilling in ANWR
altogether have voiced it would be Ioolish to completely throw away potential resources
especially oI the magnitude oI the potential capabilities on ANWR. Those in Iavor claim that it`s
a necessary loss to preserve the natural beauty and species oI the region. In the U.S. today while
we undergo a huge green movement it seems that socially we would be willing to accept a
complete Ioregoing oI resources in order to avoid Iurthering our dependence on oil in general. It
may also be politically Ieasible with a Democrat president, a Democrat controlled house, and a
democrat controlled senate iI the Obama administration were to shiIt its attention toward
conservation oI ANWR, although it would need to make quick working passing a bill as the
2010 re-elections inch closer. In the near Iuture it may also be passed depending on when the
'green movement ends and how high gas prices rise. It may also become possible in the distant
Iuture iI we Iind we know longer need oil as much as we do now or we Iind a substitute Ior oil.
Never the less closing ANWR to all human interIerence will always be an option as long as there
is not a signiIicant global shiIt requiring the U.S. to utilize all oI its reserves.

onclusion - Recommendations and Summary

The history oI Alaska and ANWR has been Iilled with victories Ior both sides oI the debate
about drilling in ANWR. With the creation oI the Trans-Alaskan Pipeline in 1974 to the passage
oI the Alaskan National Interest Land Conservation Act in 1986 both sides have had their
victories. Today it becomes ever more clear the necessity oI Americans to decide quickly the Iate
oI the Alaskan National WildliIe ReIuge as gas prices Iluctuate rapidly and the world becomes
ever more environmentally concerned. In addition we only become closer to peak oil production
and the massive realization that our natural resources are not endless and not everyone may get
their Iair share.

AIter comparing the Iour possible Iates Ior the Alaska`s National WildliIe ReIuge it becomes
evident that the best option is to stave oII drilling Ior as long into the Iuture as possible. Not only
does this option prompt the greatest chance Ior the conservation oI nature and species oI Alaska
but it also allows Ior the possibility that one day we may need to tap into the resources that are
available Ior us in ANWR due to special circumstances that aIIect our very survival as a nation.
Currently there is no need Ior us to stimulate the idea that our oil is endless by trying to lower
gas prices by drilling in ANWR. Option Iour may seem like the perIect solution now but one day
we may need the resources Ior some currently unIoreseeable reason in the Iuture. It would be
Ioolish Ior us to limit our resources permanently when we can keep them just in case. The point
oI peak production will one day be upon us and we should not just postpone it oII Ior Iuture
generations to deal with.