| Objectives
This project is concerned with the Artic National Wildlife Refuge, a large
section of northeast Alaska, which has a heavy concentration of natural
resources, including oil and biodiversity. The main objectives of this
project, as stated in the Mission 2007 course web
site, are:
- To design the most "environmentally correct" strategy for oil
exploration and extraction in the ANWR ecosystem; and
- To perform a cost-benefit analysis in order to evaluate whether or not
the hydrocarbon resources that might be extracted from beneath ANWR are
worth the environmental damage that might result from the process.
The class is divided into ten teams, each with a specific
responsibility. Team 8 is responsible for prediction the economic
impact of a decision to exploit or preserve oil resources at ANWR.
We intend, with collaboration with other teams, to:
- Express the costs and benefits of oil extraction and continued
preservation in terms of mathematical figures that can be objectively
compared.
- Explain in detail the costs and benefits of both options and how we
arrived at the figures.
- Compare how the local, national and international economies would be
impacted by oil extraction versus preservation.
- Maintain our team website.
- Answer the following questions given the time constraints of 12.000:
- Local economy: What is the current job market in Alaska? How many
jobs (and which type) would be created if oil was extracted from ANWR?
What revenue would these jobs and the oil generate for Alaska? What
infrastructure would have to be built to support the new influx of
laborers?
- Oil market: What is the current US import/export balance for oil?
What amount of oil could be extracted from ANWR? What changes would
occur in the US oil market if this oil is extracted? What is the
future fuel need likely to be? What percentage of this need can
practically be met by oil?
- Exploration: How much would the extraction machinery cost? What
disruptions to current operations/jobs (i.e. logging, fishing, tourism)
would extraction cause?
- Biological Impact: What value can one place on ANWR's unique ecosystem?
What change would occur in the ecosystem of ANWR if drilling was begun?
What potential risks would exist for the ecosystem if oil is extracted
(i.e. oil spills)? What would be the cost of solving these problems
should they arise?
- Other resources: What are the resources (besides oil) contained in ANWR?
What revenue could these generate if they are extracted?
Objectives update - October 15, 2003
We wish to focus our research in quantifying the items in the following
table:
| Costs of oil drilling |
Economic benefits of oil drilling |
Setting up drilling
- Exploration costs
- Administration
- Buying Land
- Machinery for extraction
|
Value of oil:
(Price of oil at time over which oil extracted from ANWR may be
sold) x (number of barrels that can be extracted from ANWR |
Potential harm to wildlife/ecosystem:
determine with survey of where on average the environment ranks in
importance among a number of different topics/issues |
Balance of jobs:
(jobs gained) x (wage) - (jobs lost) x (wage) |
| Transport cost of moving oil to demand market |
Less dependence on foreign oil |
|
