Can ANWR Save Us From High Gas Prices?

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Murse, Tom. "Can ANWR Save Us From High Gas Prices?" ThoughtCo, Feb. 2, 2016, thoughtco.com/can-anwr-oil-lower-gas-prices-3321993. Murse, Tom. (2016, February 2). Can ANWR Save Us From High Gas Prices? Retrieved from https://www.thoughtco.com/can-anwr-oil-lower-gas-prices-3321993 Murse, Tom. "Can ANWR Save Us From High Gas Prices?" ThoughtCo. https://www.thoughtco.com/can-anwr-oil-lower-gas-prices-3321993 (accessed September 25, 2017).
Caribou grazing in the Arctic National Wildlife Refuge, Alaska
Senate Votes Not To Allow Drilling In Artic Refuge. Getty Images

The Arctic National Wildlife Refuge, or ANWR, is located in the North Slope region of northeastern Alaska. At 19.2 million acres in size, ANWR is the largest wildlife refuge controlled by the U.S. federal government. Along with hundreds of other species of native wildlife, ANWR is best known as the calving ground for the Porcupine caribou.

Far more controversially, ANWR is also known to be rich in oil and natural gas reserves.

In 1988, the U.S. Geological Survey (USGS) estimated that a 1.5 million acre portion of ANWR called the “1002 area” held between 5.7 and 16.0 billion barrels of recoverable crude oil. In comparison, the USGS at the time estimated that the rest of the Unites States held about 120 million barrels.

The ongoing environmental debate over oil drilling in ANWR really heated up during the great U.S. energy crisis and soaring gasoline prices of the mid-1970s. 

But could opening up some 1.5 million acres of ANWR to drilling really satisfy the demands of U.S. consumers, reduce gas prices and end the country's reliance on foreign oil, as some believe?

"Our environmentalist friends have forced gas prices up to an impossible rate, forcing us to buy oil from our enemies, for whatever reason that simply isn't true," one popular email reads. "There is enough oil in ANWR to supply the US at our present rate of usage for more than 200 years.

The space that ANWR occupies in Alaska is equivalent to a postage stamp in the Mojave Desert."

"The area contains the largest onshore, unexplored, potentially productive geologic basins in the United States," according to an Energy Department report.

What is ANWR?

The 19-million acre ANWR was created by the Alaska National Interest Lands Conservation Act in 1980.

A section of that law, however, deferred a decision on the management of oil and gas exploration and development of 1.5 million acres of federal lands in the coastal plain of ANWR.

The section of ANWR most frequently mentioned for drilling potential is on the Alaska North Slope, located between the Prudhoe Bay area and the Mackenzie River Delta of Canada along the Beaufort Sea. It represents only 8 percent of the entire 19-million acre ANWR, which is off-limits to drilling.

How Much Oil In ANWR?

So, is there enough oil in ANWR, as popular claims suggest, "to supply the US at our present rate of usage for more than 200 years?"

Here are three words for you: Not. Even. Close.

The United States consumed a stunning 19,148,000 barrels of crude and petroleum every day in 2010, ranking it the most oil-hungry nation in the world, according to data compiled by the U.S. Department of Energy's Energy Information Administration.

So let's assume, best-case scenario, that the United States opens up drilling in ANWR and the fields are able to eventually produce all 16 billion gallons of oil, over time. Assuming demand for oil continues at the 2010 level - a generous assumption given oil consumption rises, not falls - Americans will consume every last drop of ANWR reserves in under 836 days, or in less than two and a half years.

Daily ANWR Production

If ANWR is eventually opened to drilling, it would produce only a fraction of the oil Americans consume on a daily basis.

The opening of the Alaska North Slope of ANWR to oil and natural gas development is projected to increase domestic crude oil production, but only by some 780,000 barrels a day at its peak, projected to be in 2027, according to Energy Department estimates. That represents about 4 percent of the nation's oil consumption in 2010.

And that means reductions of the cost of oil and corresponding relief at the gas pump, if there is to be any, would be years away - not to mention minimal.

Can ANWR Drilling Save Us?

Opening ANWR to petroleum companies to drill would reduce crude oil prices, but only moderately, according to the Energy Department. The agency said the savings would about to only 75 cents per barrel by 2025, or less than 1 percent of the cost.

The estimate was prepared at the request of then-U.S. Sen. Ted Stevens, a Republican from Alaska, who sought "plausible scenarios for development of the Coast Plain consistent with the most recent USGS resource assessments and oil price situation."

The Energy Department projected the opening of ANWR would reduce U.S. dependency on foreign oil only slightly, from 51 percent to about 49 percent. "Additional oil production resulting from the opening of ANWR improves the U.S. balance of trade," the agency stated.

Is estimated that spending on foreign crude oil and liquid fuels between 2018 and 2030 would be reduced by $202 billion dollars.

"Additional oil production resulting from the opening of ANWR would be only a small portion of total world oil production, and would likely be offset in part by somewhat lower production outside the United States," the report states.

So, back to our initial question: Will opening up ANWR save us from high gas prices? The answer appears to be no. Don't hold your breath.