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Domestic Energy Consumption
The United States consumes by far the most energy of any country
in the world: on average 20,000,000 barrels of oil a day.
Although the US accounts for only 5.5% of the worlds population, 20,000,000
barrels represents 26% of the world's total oil production (a quarter of
the world's carbon emissions). Domestic oil production is roughly 5 million
barrels of oil per day which means that a net import of 15 million barrels
of oil per day are necessary to fuel our energy dependant economy.
Breakdown of US Energy Supplies:
Domestic Production (per day)
- Texas- 25% (about 1.5 million barrels)
- California- 21% (about 1 million barrels)
- Alaska- 24% (about 1.5 million barrels)
- Louisiana- 14% (about 500,000 barrels)
- Other states (about 500,000 barrels)
Imports (per day)
- Canada - 1.68 million barrels
- Saudi Arabia- 1.49 million barrels
- Venezuela- 1.46 million barrels
- Mexico- 1.35 million barrels
- Other ( including North Africa, West Africa, Australasia,
China, Pacific countries, other Central and South American countries)- 7
million barrels
One of the main arguments of the pro-oil lobbyists has been
that opening up ANWR for drilling will reduce US dependancy on foreign oil
imports. Currently, Alaska's Northern slope produces about 200,000 barrels
of oil per day. If ANWR were to be exploited for oil, that number could increase
to 1-2 million barrels of oil per day increasing total domestic production
by 1-2 million barrels of oil per day. While at first this seems like a
considerable amount, we would still be importing 13-14 million barrels of
oil per day, assuming domestic oil demand does not increase and other domestic
oil reserves are not depleted. This number also represents the peak production
that ANWR could output, not likely to be reached until 2020 if drilling were
to begin immediately. From 1990-2000, the US saw a ten percent increase in
oil demand so it is unlikely that demand will stay the same in the upcoming
years. As other domestic oil reserves are either approaching their peak oil
production or have already passed it, the prospect of significatly reducing
import of foreign oil is unrealistic.
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Is Drilling Economically Viable?
Although the oil business is very lucrative, the fixed costs for
the industry are very high. An estimated $17.17 for each barrel of Arctic
oil sold will go back to the companies to pay for exploration costs, infrastructure
(including repair to corroded Alaska pipeline), cost to transport oil to
and from market, costs to lease land from US government and Inupiat indian
tribe, and other company costs. According to projections by the Alaska Department
of Revenue, in 2020, when ANWR drilling could become a reality, oil is predicted
to be at only $13 a barrel. This would be a substantial loss to the oil companies,
namely British Petroleum, ChevronTexaco, Nabors Alaska Drilling, (Endicott,
Arco, Anadarko subsidiaries of BP). In 1989, BP withdrew from Arctic power,
possibly signalling bad profitability potential in the Northern Slope. Also,
BP spent an estimated $2 billion on oil exploration in Alaska only to find
the region "dry" and not worth pursueing. If drilling in Alaska is not economically
viable, then companies will not drill. BPs pullout indicates just that;
drilling in Alaska is more trouble and expense than it is worth.
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