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August 06, 2008

The Arctic National Wildlife Refuge (ANWR) has been in the news lately. The price of oil has risen significantly in recent years; demand for oil has increased world wide while supply has not followed suit. So the rise in price is not really surprising, though the rate of the increase is steeper than expected. U.S. Geological Survey studies describe significant oil reserves ready for drilling in ANWR, but many members of congress have refused to allow drilling because of environmental concerns.

It sounds all the world like a binary issue; true vs. false, black vs. white, environment vs. big oil. But I don't accept that; I always find that issues such as this are so often presented to the public in a way that's overly abstracted and simplified to the point of deception, and that if one looks beneath the surface and studies the issues a little bit more, that things can get really interesting, and all sorts of possibilities present themselves. So hold on tight, there's some analysis coming...

The "ANWR 1002 Area"

According to the USGS assesment:

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 (table 1).

7.7 billion barrels of oil is very significant; that's more than 1/3 of the oil reserves in the US, and it's more than 1/2 the oil reserves in all of Mexico. And if that wasn't enough, the oil is easlily deliverable as it's located something like 40 miles east of the Alaskan pipeline (!!!).

I think it's important to note that these oil reserves are not for all of ANWR, just the " ANWR 1002 Area", which is a section on the northern coast of Alaska, about 1.5 million acres, roughly 30 by 75 miles. ANWR is about 19 million acres, so the 1002 Areas is about 8% of ANWR, or about 0.035% or 1/3000th of Alaska.

As a side note I'd like to point out that Alaska is huge. You can fit two Texas's plus a New Mexico in the area occupied by Alaska. You can fit four (four!) Californias into the area occupied by Alaska. The population of Alaska is 680,000, about the same as the city of Baltimore, with more than half of that in the Anchorage metropolitan area. So the state is mostly wilderness.

A Simple Land Trade

I'd like to offer up my solution to the problem; a way to have both environmental protection and drilling: a simple land trade.

Offer up 1.5 million acres of other Alaskan land, land without significant oil reserves, or where the oil is too difficult to retrieve, to be declared a wildlife preserve in trade for drilling in Area 1002. I mean, it's not like the caribou need oil reserves to survive. The US government already has the National Petroleum Reserve - Alaska nearby, 23.5 million acres of undisturbed land, and some of that could be offered up. You could sweeten the deal by offering more land for Area 1002, say a 20% enticement.

Or the ANWR borders could be extended downward a little bit to compensate. It wouldn't take much, let's try a quick back-of-the-envelope calculation: Looking at a map I see that ANWR has border of about 400 miles within Alaska (that's intentionally not including the Canadian border and the Beaufort Sea shoreline). The ANWR 1002 Area's 1.5 million acres is equivalent to 2344 square miles, so extending the (somewhat arbitrary) ANWR border by 6 miles should do the trick.

You might not even need the whole Area 1002 drilling, maybe only half of it. Perhaps 750,000 acres, or 4% of ANWR.

[Later addition:]
I found this Ed Morrissey entry on Hot Air called Could a land swap solve the ANWR standoff? which notes this item in the Fairbanks News Miner:

Sean Parnell, lieutenant governor and a Republican candidate for the U.S. House of Representatives, proposed a land swap as a way of opening the Arctic National Wildlife Refuge.

It's Not About the Price of Gasoline

I should point out that I'm not for drilling in Alaska because of gasoline prices. I think a high gasoline price is fine. I wrote an article some years back, A Modest Proposal to Improve the National Energy Policy, that proposed that high gas prices are the only practical way to conserve oil, to encourage more efficient forms of transportation, and to develop alternative energy sources. The basic idea is that there's no incentive to develop an engine that runs on, say, orange juice when orange juice is more expensive than gasoline. Also let's face it; people getting huffy about gasoline prices is the height of arrogance, especially considering that prices are so much higher in Europe. On the other hand, the price has been going up a little faster than the economy can safely handle, and unlike with my alternative tax proposal, the oil revenues are currently going to some nasty places.

With a land trade, the environmentally concerned lose no land, they might even gain some, we can increase the supply of oil significantly, create more jobs, create more business income for domestic drilling companies, more tax revenue from that, reduce the trade deficit, reduce the dependence on foreign oil, reduce the oil profits to countries that want to kill us. And at the same time, it would also have an overall positive effect on the environment. That's pretty good!

Can the Alaskan Oil Pipeline handle the capacity? Easily. According to pipeline's web page, it is currently running at about 1/3 capacity. That's a shame it's so underutilized, the pipeline is a remarkable engineering achievement.

Environmental Issues are Upside Down

The main concern over drilling is environmental, and I find this especially intriguing. Yeah sure, any drilling is going to be bad for the environment to some degree. But for the oil we use, what we don't drill domestically we have to import. When we drill within the US we do so with an overactive Enviornmental Protection Agency, and with a huge number of environmental laws, regulations, and oversight, as well as an army of lawyers ready to pounce in the event anything screws up. When the equivalent amount of oil is drilled in the mideast, the environmental impact is far greater. And then after the drilling is done, more oil has to be burned shipping that oil around the planet, with the attendant danger of oil spills, and then even more oil has to be burned for the tanker's return trip. In comparisons to oil tankers, delivering oil by pipeline is more efficient.

A ban on domestic drilling doesn't mean that the oil isn't pumped, it means that the oil is pumped elsewhere, with a significantly nastier environmental impact. So taking an actual world view, drilling oil domestically will be much better for the global environment than importing oil.

Even if we didn't need to import oil, hypothetically, it would could still be a global environmental win to drill in Alaska and export the oil, because the oil would be drilled under less environentally messy conditions than in the middle east.

[Later addition:]
Senator Mitch McConnell (R-Kentucky) was commenting on Congresswoman Nancy Pelosi's (D-California) "I'm trying to save the planet" response to attempts to lift the moratorium on offshore drilling, and echoed my point exactly:

I'm also, y'know, amused by the speaker, amused is maybe not the appropriate word, she says she's out to "save the planet". Well if you're out to save the planet, I don't know how exporting production from the United States to places like Nigeria is good for the planet. A place where they have constant disruptions, low environmental standards, spills all the time. Most of the production in the world is not done in a country as environmentally sensitive as ours, so if you have planetary concerns, and we're all in the same world here, you don't do the environment any good by exporting American production overseas.

-- Senator Mitch McConnell, R-Kentucky on the Dennis Miller Radio Show, August 6 2008


Unfortunately there is also some nasty politics involved. Right now a democrat congressman has little incentive to positively impact the economy as they don't want the Bush administration to look good during an important election year. If they can earn righteousness points by associating themselves with a bogus no-compromise environmental stand at the same time, there will be a strong inclination to vote against drilling.

Posted by DonTillman at August 6, 2008 11:43 PM

Hello Don,

Interesting piece. Brings together a lot of threads from different disciplines and adds some much needed depth to the discussion. Here is my two cents.

I believe people will continue to drill for oil. I also believe the environment is in bad shape. How can we do an extraordinary job when people drill for oil? I do not have all the answer but I think we can do better. The land swap idea has some merit but seems to assume land is uniform. While Caribou and the rest of Mother Nature don't care about oil, they need a good habitat. A deeper understand of equality is required. I can't be of to much help here, but I bet there are a lot of ecologist who can shed some light on it.

I'd also like to see analysis done what are the truly sensitive parts of this region. I don't know this region but I'll bet there are critical bits to that habitat. Consider our region of Northern California. The Sacramento River Delta (http://en.wikipedia.org/wiki/Sacramento_River_Delta) is critical to our civilization as it provide water for both the bay area and LA.



Posted by: John [TypeKey Profile Page] at August 9, 2008 06:27 PM

John writes:

   Hello Don,
   Interesting piece.  Brings together a lot of threads from
   different disciplines and adds some much needed depth to the
   discussion.  Here is my two cents.
   I believe people will continue to drill for oil.  I also believe
   the environment is in bad shape.  

Hey John,

Well, in most of the US, and in many parts of Europe and Austrailia, the environment has been dramatically improving over the last hundred years of so. Recall how unprocessed coal used to the be the primary fuel source for heating, trains, factories and mills. The Hudson River and Lake Erie used to be horribly polluted. And the Cuyahoga River was famous for being so pulluted that it actually caught on fire. (!!!) Multiple times. (!!!) There used to be far fewer environment rules, regulations, enforcement and research. All that is much, much improved.

Many other nations, though, are in bad shape environmentally. China's pollution has been in the news lately, as has India's. Russia, Kyrgyzstan, Ukraine, Dominican Republic, Peru, Zambia are all environmental messes.

So it's a far more more complex (and interesting!) issue than a simple thumbs up or thumbs down.

   How can we do an extraordinary job when people drill for oil?  I
   do not have all the answer but I think we can do better.

When drilling is performed it's far better to do that drilling with the most advanced drilling technology in places with strict environmental controls. Ie., in the US.

When legislation limits drilling in the US, that drilling is quickly moved to nations with more cumbersome technology and fewer, if any, environmental controls.

   The land swap idea has some merit but seems to assume land is
   uniform.  While Caribou and the rest of Mother Nature don't care
   about oil, they need a good habitat.

There's nothing to indicate that the curent ANWR 1002 Area is carabou utopia as things currently stand, it's probably quite the opposite. And given the huge and diverse amount of other available land in Alaska, I would think that the possiblity of the caribou trading up is a near certainty.

Heh-heh, I'm imagining a reality show called "Flip This Wilderness Preserve"!

-- Don

Posted by: Don Tillman [TypeKey Profile Page] at August 10, 2008 10:26 AM

i think your analysis is excellent on this, don. i applaud your insight and your courage.

Posted by: hiltonius [TypeKey Profile Page] at December 6, 2008 06:49 AM

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