[extropy-chat] Debate on Peak Oil

[Mike Lorrey]

http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20050426/OPINION01/504260377/1035/OPINION

Deloss: Arctic drilling would yield big benefits, low costs

By GARRY DELOSS

April 26, 2005 
Recent votes in the U.S. Senate and the House of Representatives
indicate that oil drilling in the Arctic National Wildlife Refuge
(ANWR) will likely get congressional approval this year. Does this mean
"a national treasure in jeopardy" as a Sierra Club essay in the
Register warned?

Not to worry. Back in the "energy crisis" years of the 1970s, I lobbied
Congress on energy-policy issues for consumer activist and
environmental groups. In retrospect, we were wrong to oppose Arctic oil
drilling then, and today's environmentalists are repeating that error.

I offer four undeniable truths about Arctic Refuge oil drilling:

1. The national economic benefits from producing ANWR oil will be
substantial. Environmentalists downplay the several billion barrels of
oil as equal to a year or less of U.S. oil consumption. But that's a
nonsensical calculation. In the real world, ANWR oil will be produced
gradually over decades. It might provide 5 percent (one million barrels
daily) of our oil needs for 20 to 30 years.

If a possible 10 billion barrels are produced over a 30-year period at
an average price of $50 in today's dollars, that means releasing a half
trillion dollars in presently idle underground wealth that will create
jobs, grow our economy, and spin off tax revenues to pay for government
programs. Plus, the Alaskan oil will help our balance of trade as it
displaces imported oil.

Of course, as the price of oil rises, all of these waiting-to-be-tapped
economic benefits get bigger.

2. In contrast, the prospective cost in environmental injuries from
ANWR oil production has been falling and will be slight. How can I be
certain? Because I rely on the two most relevant pieces of empirical
evidence.

First, even the outdated oil drilling technology and network of gravel
roads used 30 years ago to develop nearby Prudhoe Bay co-exist with
thriving wildlife.

Second, at ANWR, wildlife habitats will be further protected by two
innovations in Arctic oil drilling since Prudhoe Bay was drilled: the
use of modern "directional drilling" of multiple wells from a single
drilling platform and the use of temporary winter "ice roads" over the
tundra in place of permanent gravel roads.

The consequently minimal environmental "footprint" of modern Arctic oil
drilling is not theoretical; it is readily visible west of Prudhoe Bay
at the Alpine oil field (named for a company, not the topography). That
project drains oil from beneath 40,000 acres with dozens of wells from
only two drilling platforms on 93 acres of land. No gravel roads
connect Alpine to Prudhoe Bay, only winter ice roads and an underground
pipeline.

The low-impact Alpine oil field, conspicuously ignored by the Sierra
Club, proves that injuries from Arctic Refuge oil drilling will be
mostly metaphysical (pain to the psyches of people who demand
zero-impact purity), not physical (actual damage to wildlife habitats).

3. There is a highly successful precedent for congressional action to
facilitate arctic oil production despite environmentalist doom and
gloom.

In late 1973, environmental groups were litigating against a federal
pipeline construction permit for the proposed Trans-Alaska Pipeline to
bring Prudhoe Bay oil to market.

Then the Arab oil embargo hit, Congress passed a law ending the
litigation (Public Law 93-153), the pipeline was completed in mid-1977,
and enormous national benefits followed, along with tolerably low
environmental injuries.

4. Given the above-described rising economic benefits, falling
environmental costs, and successful congressional precedent, a vote to
drill in ANWR has always been a question of when, not whether. When oil
prices fluctuated at $25 to $30, ANWR oil production was a questionable
venture. But China and India have traded their economically depressing
socialism for the benefits of capitalism. As their economies grow
rapidly, their rising oil consumption is pushing the world price of oil
to $50 many years ahead of expectations. ANWR oil drilling is barely
economic at $30, attractive at $40, and irresistible at $50.



Mike Lorrey
Vice-Chair, 2nd District, Libertarian Party of NH
"Necessity is the plea for every infringement of human freedom.
It is the argument of tyrants; it is the creed of slaves."
                                      -William Pitt (1759-1806) 
Blog: http://intlib.blogspot.com

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