Research
Focused Question: What
are the benefits of drilling in ANWR? (Oct. 15, 2003)
 "It's Energy Prices, Stupid" (Money Magazine, Oct. 2003)
- Historical norms for energy prices: $20 barrel for crude oil; $2-3 per
1000cf for natural gas
- Current prices: $30 barrel for crude oil ($40/barrel before Iraq war,
the highest figure of the past 20 years)
- Estimated future prices: $25-30/barrel for crude oil (higher than
historical norms due to a steady decline in new production capabilities)
- -"each $5 increase in crude oil prices trims about
0.3% ($32 billion) from GDP"
- -"each additional penny per gallon Americans pay at
the pump dampens other forms of consumer spending by $1 billion"
- OPEC effectively has control over the world oil market because non-OPEC
nations are already operating at full capacity.
- Analysis: The U.S. will continue to face higher oil prices in the
future. The higher cost can be beared, exploration and
development of existing or new domestic oil sources increased, or a shift
to reliance on other products begun.
"Study benchmarks 2001 drilling, completion costs for 400 South Texas
gas wells" (Oil and Gas Journal, Dec. 9, 2002)
- average drilling costs for wells (normal pressure wells <10,000ft
deep) in South Texas: $71/ft - $200/ft
- of the combined $1 billion spent to operate the wells, ~7/10ths were
drilling costs, and the other 3/10ths were completion costs
"ANWR development arguments and their limitations" (Oil and Gas
Journal, May 5, 2003):
- potential jobs from the development of Area 1002:
- up to 25,000 new jobs in Alaska; 50,000-730,000 new jobs in the US
(including Alaskan jobs) to process and distribute the oil/gas
- US Bureau of Labor Statistics estimated 3.89 jobs required for every
$1million of sales by petroleum producers + 16.53 jobs for every $1
million sales by oil-gas service companies
- 2.4 billion barrels potential recovery = development costs of 6.5
billion = 60,000 resulting jobs
- impact on import balance:
- with peak production, "1002 Area might be able to offset about 10%
of all imports for a few years"
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