Opening the Arctic National Wildlife Refuge (ANWR) to oil and gas development would have little impact on the proposed Alaska gas pipeline project, but it probably would save U.S. taxpayers about $8 billion/year in oil expenditures in 2025, the Energy Information Administration (EIA) said in a special report prepared at the request of Rep. Richard Pombo (R-CA), chairman of the House Committee on Resources.

On Feb. 23, Pombo asked for the analysis comparing ANWR oil and gas leasing to projections shown in EIA’s Annual Energy Outlook. He also asked EIA to assess whether there were any “significant synergies” regarding the opening of ANWR to leasing and the potential construction of an Alaska gas pipeline.

What EIA found was that although opening ANWR might reduce the gas resource risk of building a pipeline, there is “expected to be a much larger gas resource in the National Petroleum Reserve-Alaska (NPRA).

“The NPRA is currently being leased and explored,” EIA noted, “and has an expected gas resource base six times larger than that expected for the coastal plain of ANWR.” As a result, the NPRA is expected to have a greater impact on reducing the resource risk associated with building the pipeline than would developing ANWR.

The NPRA on the North Slope is estimated to contain between 40 and 85 Tcf of technically recoverable non-associated gas resources and seven to 17 Tcf of technically recoverable associated-dissolved gas resources, according to the U.S. Geological Survey (USGS). The eastern portions of the NPRA also are already undergoing active exploration.

In contrast, the USGS estimated that the technically recoverable non-associated gas resources available in the ANWR coastal plain are between zero and 11 Tcf with a mean estimated value of only 3.8 Tcf of gas. An additional 2.3 to 5.2 Tcf of technically recoverable associated-dissolved gas is estimated to exist with a mean estimate of 3.6 Tcf, which leaves the total estimated associated and non-associated resource at about 7.4 Tcf.

EIA said that Alaska producers currently have proved about 35 Tcf of reserves but need an additional 16 Tcf to build the pipeline to the Lower 48. ANWR only provides about half of that. “Consequently, opening the ANWR coastal plain to petroleum development might reduce the resource risk associated with an Alaska natural gas pipeline, but only marginally…”

Regarding the oil in ANWR, EIA determined that given a development track, ANWR would begin producing in 2013 and probably peak at 876,000 b/d in 2024. The oil production from ANWR is expected to reduce world oil prices in 2025 by 20-50 cents/bbl, assuming that the Organization of Petroleum Exporting Countries (OPEC) doesn’t respond to ANWR oil production by reducing its exports by an equal amount to countermand any potential price impact.

ANWR oil production also would reduce the need to import oil by a like amount. In the reference case, EIA found that expenditures on foreign oil in 2025 would be about $200 billion (2002 dollars) without ANWR and $192 billion with ANWR (with a potential range of $185 billion to $194 billion). But the agency also noted that there are considerable uncertainties regarding ANWR, including the size of the resource base, the timing of development, the cost of development and, last but not least, environmental considerations.

For more details from EIA’s report, go to https://tonto.eia.doe.gov/whatsnew/newwhatsnew.cfm.

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