Over the last thirty years the United States has been faced with the problem of dependence on foreign countries for oil and the tight control that these exercise on the energy policies and economics of America. Many of these instances include: the oil embargos of the 1970s, the Iraqi invasion of Kuwait in 1990, and the terrorist attack on the World Trade Center in 2001. Since the 1970s, one solution offered to reduce our nation’s dependence on foreign countries for oil has been opening up drilling in the Arctic National Wildlife Refuge (ANWR). Proponents say that drilling in ANWR would make the United States more self-sufficient in the area of energy, while at the same time not doing excessive damage to the environment of the area. Opponents of drilling in ANWR cite the environmental problems of off-shore drilling and maintain that this land should be left alone and allowed to stand as an environmental wonder. Given that some environmental groups do not mind allowing technology to invade the environment when it profits them and given the threats of global terror and the ever-increasing dependence our nation has on foreign oil, I believe it is in the best interests of the United States to open up the Arctic National Wildlife Refuge for oil drilling.
Before stating both sides of the argument, I would like to make two observations that I found interesting while researching from the book, Taking Sides. The first thing that I found interesting was that in an environmental science class and in an environmental science textbook, the two articles used to present the pros and cons of opening up oil drilling in ANWR were not written by environmentalists or scientists or even oil technology experts, but rather by an economist, a physicist and a lawyer. The second thing that ran through my head as I was reading both articles was the time at which both were written. “To Drill or Not to Drill: Let the Environmentalist Decide,” written by Dwight R. Lee, a professor of economics, and “Fools Gold in Alaska,” written by physicist Amory B. Lovins and lawyer L. Hunter Lovins, were both written in the months prior to the September eleventh terrorist attacks in the United States and the subsequent United States invasion of both Afghanistan and Iraq. As I read both articles, especially that of the Lovins, which opposes oil drilling in ANWR, I could not help but wonder if each of the three men would either have different views or in the case of Lee a different argument for his views, if they had to write their articles post 9/11. Another interesting fact about ANWR is that, “ANWR is home to one of the world’s largest caribou herds as well as 200 other wildlife and plant species.” (Cunningham, William P. Cunningham, Mary Ann and Saigo, Barbara, pg. 413)
My argument in favor of opening up oil drilling in ANWR is based on two things: the questionable conclusions that the Lovins article draws from past energy policies and the latest factual and no-so factual data they had available to them at the time. I believe that given the world we live in today, the principles that the Lovins and other use to argue against oil drilling in ANWR can be applied to argue why oil drilling should be open in the tract of land in Alaska. By drilling for oil in Alaska the U.S. will become more self-efficient on fuel, and the opportunity for employment will cause the current unemployment rate to decrease. The drilling creates opportunities not only for oil companies, but also boating and airplane carriers.
In the article, the Lovins’ write, “In sum, even if drilling in the Artic Wildlife Refuge posed no environmental or human rights concerns, it still could not be justified on economic or security grounds.” (Armory B. Lovins and L. Hunter Lovins, page 130) This may have been true when they wrote the article but the economics of the United States and the world have changed. They argue that the amount of oil in ANWR and the projected price per barrel for this oil would not generate enough of a profit to making drilling worth it. One part of this argument is flawed based on the figures they decide to use and the other part of the argument is outdated. In both cases, the data used far underestimates the reality of the situation.
The Lovins quote a United States Geological Survey (USGS) that estimated ANWR yielding approximately 3.2 billion barrels of profitable oil (Armory B. Lovins and L. Hunter Lovins, page 135). The Lovins’ use this figure in their argument that this would not produce enough oil to make it profitable for oil companies to drill. The problem with this argument is that it low balls the projections. In his argument in favor of drilling, Lee says that it has been estimated that there are between three and sixteen billion barrels of recoverable petroleum (Dwight R. Lee, page 127). In his debate, Lee takes the middle ground and uses the figure of 9.5 billion barrels, but the Lovins conveniently take the low figure, which begs the question that if they used the 9.5 billion barrel figure would it then making drilling profitable. Regardless of the amount of potential oil in ANWR, the most important figure in estimating the profitability of the project is the price per barrel the oil will get on the world market. Not only must we think about the world market, but also the cost of building and transportation whether it be by boat, airplane, or train.
The Lovins use USGS estimates again and contend that the oil in ANWR would only be worth recovering if its long-term price were at least $22 per barrel in West Coast ports. They go on to state that until it spiked up from $13 per barrel in 1998 to $30 per barrel in late 2000, Alaskan oil did not exceed that level for eight years. They also quote an Alaska Department of Revenue forecast that predicts a steady drop from $22 per barrel in 2001-2 to less than $13 per barrel in 2009-10; the earliest date oil would begin to flow from ANWR if drilling began in 2001. They further back their figures by mentioning a United States Department of Energy prediction that predicted world oil prices not reaching $23 per barrel until 2020 (Armory B. Lovins and L. Hunter Lovins, page 132).
The Lovins had no way of knowing that the September eleventh terrorist attacks would happen or that state-run Venezuelan oil production would come to a halt during a workers strike in 2003 or that unrest in Middle East would be at an all-time high following those attacks and the subsequent invasions of Afghanistan and Iraq by the United States, but all of those events have led to oil prices to consistently be at $40 per barrel or more since the spring of 2003 (www.cnn.com). With oil prices that high, it stands to reason that drilling in ANWR would now be a profitable proposition for oil companies. It has also been estimated that ANWR can yield as much as 16 billion barrels of oil. (Cunningham, William P. Cunningham, Mary Ann and Saigo, Barbara, pg. 413) In this case, drilling in ANWR would with out a doubt be a profitable venture.
Going back to the low balling of estimates of the amount of oil in ANWR, this estimate allows the Lovins to estimate that the potential supply of oil would run out in approximately thirty years and yield 292,000 barrels of crude a day. This oil would produce 156,000 barrels of gasoline per day, which is enough to run just two percent of the nation’s car and light trucks. According to the Lovins, that much gasoline could be saved if light vehicles became 0.4 mpg more efficient, which was the rate every five months car became more fuel efficient from 1979-85 (Armory B. Lovins and L. Hunter Lovins, page 135).
The first flaw in this argument, which we have already addressed, centers around the amount of potential oil there is in ANWR. Taking the middle estimates of close to 9.5 billion barrels and applying it to the Lovins contentions would mean that the oil reserves would last for closer to ninety years and that fuel efficiency would have to increase to approximately 1.2 mpg to offset not drilling. When formulating a long-term national energy policy, an oil reserve that would only last ninety years might not be a good enough reason to drill in a wildlife reserve. However, a policy that would require automobile manufacturers to increase fuel efficiency beyond what they have already increased them might just be a good enough reason to tap ANWR.
As mentioned earlier, under the Carter administration, automobile manufacturers increased fuel efficiency by 7 mpg over a six-year period. The Lovins are now asking automobile manufacturers to increase fuel efficiency once again with the reasoning that if they could do it once, they could do it again. The problem with this argument is that when the automobile manufacturers did it in the 1970s and 1980s it was the first time they attempted to make a significant increase in automobile fuel efficiency. While technology is growing by leaps and bounds, automobile manufacturers can only be asked to do so much in balancing technological advances and their corporation’s bottom line in producing automobiles that are fuel efficient, affordable to the public, and profitable. Our growing technology is reaching a peak when it comes to making cars more fuel efficient.
We have been able to develop Hybrid cars, but only to find out that they only are affective when driving in stop and go traffic when the car would be running off of essentially a large battery. These cars would only be affective in cities when you have heavy traffic on a day-to-day basis. One might also ask, why America is using so much oil for cars when other countries such as France have proven to use much less? It doesn’t take long to see that these other countries have the ability to use alternative methods of transportation like a metro. This is inefficient in the U.S. because the population is spread out and the majority or travel to and from work would be too far for a metro. We must also consider the car manufactures that we would be putting out of business by finding alternative transportation or more efficient automobiles. America has billions of dollars in the automobile industry. If we get rid of the use of gasoline, the transformation may cause several companies and industries, such as steel, to experience bankruptcy.
Increasing fuel efficiency is an argument used by most people as an alternative to new drilling for oil, but Lee comes back with a counterargument that increased fuel efficiency has caused automobile manufacturers to produce lighter cars, which in turn increase the likelihood of fatalities in an accident. Lee then extrapolates that opening oil drilling in ANWR would save an approximate 200 lives a year in the United States (Dwight R. Lee, page 127). While Lee makes an impressive argument with many facts and figures, which he admits are not greatly precise, he backs off his numbers in the paragraph following his assertion and ends the argument by simply saying that opening oil drilling in ANWR will save thousands of lives on American highways (Dwight R. Lee, page 128). The fact that Lee backs off his argument slightly and saves it for the end of his article is a telling sign that even Lee knows that many more variables and factors come into play in traffic fatalities.
Given this, Lee does make one good argument in favor of opening up ANWR to oil drilling. The backbone of the argument does not give the benefits of opening up ANWR to oil drilling, but rather counters arguments against drilling there from environmental groups. Lee states that if groups like the Audubon Society had a financial stake in opening up ANWR then their opposition would not be as strong or possibly non-existent. Lee uses the example of land in Louisiana owned by the Audubon Society that the group allows drilling on in exchange for great financial gains for the group. He suggests that groups like the Audubon Society do not oppose drilling in ANWR on environmental grounds, but rather because they do not stand to gain financially from such activity because ANWR is public property. In this case F. A. Hayek might suggest that these groups will act on self-interest. “Each man is to use his peculiar knowledge and skill with the aim of furthering the aims for which he cares.” (Hayek, F.A, pg. 17) Hayek would argue that if you make the drilling worth it to these groups they wouldn’t oppose the drilling. If you provide these groups with a profit from the oil they will allow the drilling without question. However, to provide a profit to all the groups that would be opposing the drilling you it might not prove to be a profitable venture.
As mentioned previously, the world was a different place when Lee and the Lovins wrote their articles in the fall of 2001. In developing an energy policy for the United States, the Bush administration and future administrations need to take many factors into consideration, among which are conservation and new energy sources. I think we all can agree on the fact that something should be done about the oil prices in America. We currently are experiencing gasoline prices around $2.25 a gallon, and it is estimated that we will have prices up to $3 per gallon late this summer.
For most American families gas prices will be a serious factor in their day to day activities. Whether it is for running errands or going to work, gas prices will affect this economy. With the opening up of drilling in ANWR we may be able to minimize damages to the economy from these prices. If we can find a way to make ANWR profitable to all groups and organizations that are involved we may see a serious act in the near future to start the process of drilling. With a solid combination and profitability factor the U.S. could prevent the rising gasoline prices. We need to however, continue our search for other alternatives do to our limited resource of oil. For this reason, I am in favor of opening up the Arctic National Wildlife Refuge to oil drilling and also the exploration of alternative fuel sources, as well as ways to conserve fuel. This combination should provide the United States with an energy policy that is both financially stable and environmentally sound.
- Cunningham, William P. Cunningham, Mary Ann and Saigo, Barbara. Environmental Science, A Global Concern. McGraw-Hill. New York, NY. 2005.
- Easton, Thomas A. and Goldfarb, Theordore D. Taking Sides. McGraw-Hill/Dushkin. Guilford, Connecticut. 2004.
- Hayek, F.A. Individualism and Economic Order. The University of Chicago Press. Chicago and London. 1948.
- Lee, Dwight R. “To Drill or Not to Drill: Let the Environmentalists Decide.” The Independent Review. Fall 2001.
- Lovins, Amory B and Lovins, L. Hunter. “Fool’s Gold in Alaska.” Foreign Affairs. July/August 2001.