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New push to pump oil from Alaska refuge

An important side conflict in the war on terrorism is the political battle over whether or not to drill for more oil in the United States.

The Bush administration and its friends in Congress are using the recent terrorist attacks and war in Afghanistan to push for more domestic oil drilling - especially in the Arctic National Wildlife Refuge (ANWR) in Alaska and other public land.

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Supporters say drilling there is necessary to lessen reliance on foreign imports, which are projected to increase by 57 percent over the next 20 years.

Opponents say national wildlife refuges and other protected areas never were intended to include oil wells and all the disruptive development and pollution they bring. The Senate could see a filibuster on the issue, which is attached to the economic-stimulus package.

Some lawmakers and energy analysts say the lesson of the past 10 weeks is that the United States needs to become more energy efficient rather than scramble for more oil.

Citing EPA figures, Sen. Barbara Boxer (D) says, "In seven years, we could save the same amount of oil available in the Arctic Refuge by requiring light trucks and SUVs to meet the same efficiency standards as regular cars."

But Vice President Dick Cheney, who wrote the administration's production-dominated energy plan earlier this year, told the US Chamber of Commerce recently that for national-security reasons it would be "foolish in the extreme" not to increase domestic oil sources.

For years, environmentalists have wrangled with oil-industry supporters over the 1.5 million-acre coastal plain of the Arctic refuge, which lies just east of the North Slope drilling facilities that pump oil south to Valdez through the 800-mile Trans-Alaska Pipeline.

"The ANWR is simply not just a place to drill oil, it is the largest potential domestic source of oil," Interior Secretary Gale Norton told an oil producers' association in Houston recently. "This is a matter necessary for security and also to enhance economic recovery."

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As she frequently does, Ms. Norton also noted that the US imports 700,000 barrels of oil a day from Iraq. "It's time to start investing that money in our own backyard and not in the back pocket of Saddam Hussein," she said.

Republicans and a few Democrats on Capitol Hill are emphasizing the same point. Sen. Frank Murkowski (R) of Alaska calls ANWR "our nation's best hope for new domestic exploration," and he says, "it can replace the oil we buy from Saudi Arabia for the next 30 years."

But critics assert that these kinds of projections are based on questionable estimates of the amount of oil beneath ANWR's icy tundra. Senator Murkowski cites the more optimistic oil production estimates of 16 billion barrels of oil.

According to the US Geological Survey's most recent analysis, there is only a 5 percent chance that that much oil could be recovered.

The "mean value" of recoverable oil is 10.4 billion barrels, reports the USGS. There is a 95 percent chance that it could be far less than the figure Murkowski cites, the USGS says, or as little as 5.7 billion barrels. That number could fall further if state and native lands are not included.

All those numbers refer to "technically recoverable" oil. A more relevant figure may be "economically recoverable" oil - meaning oil that would be worth the cost of extracting it from the ground. This means that the fight over ANWR - one of the most important environmental issues today - is complicated by the ever-changing price of oil.

As the price drops - as it's been doing lately - so too does the amount of economically-recoverable oil. Using a 12 percent return on investment, the USGS estimates that at a market price of $24 per barrel there is a "mean value" of 5.2 billion barrels available.

But at last week's price of $15.35 per barrel, the Wilderness Society, an environmental organization in Washington, estimates only about 1 billion barrels would be economically recoverable from beneath the refuge.

According to a USGS fact sheet, no oil could be profitably recovered from ANWR at prices less than $13 per barrel.

The economic debate over ANWR centers on jobs as well as barrels of oil.

A 1990 study commissioned by the American Petroleum Institute projected 750,000 new jobs created as a result of oil production in ANWR.

But a September study by the Center for Economic and Policy Research in Washington cites updated world oil supplies, the likely response to falling oil prices by producing nations, and the sensitivity of employment to oil prices, to assert that just 46,300 jobs would result.

Oil industry supporters insist that drilling can be compatible with preserving the environment.

But earlier this year, the US Fish and Wildlife Service, which manages the national wildlife refuge system, reported that refuges in Alaska "are not impervious to contaminant threats [caused by oil development], and many of them have significant and regrettable contaminant histories."