Senate Energy and Natural Resources Committee Communications Director, Robert Dillon (NGP Photo), wrote us this morning, "The New York Times recently ran an article with a headline pronouncing the “end” of Alaska’s energy boom. The reporter focused on how economic anxiety is affecting the state’s Senate election, but in doing so, missed a critical point about Alaska’s “dwindling” production: the main reason it continues to fall is because the federal government refuses to allow access to the vast resources on federally controlled lands." Here is the NYT article, by Kirk Johnson. Below is Dillon's full response which we recommend to all of our readers. -dh
Response To NYT Alaska Energy Article
Today's Other Energy Links:
CBC. A meeting report between Prime Minister Stephen Harper and new Alberta Premier Jim Prentice, "…Prentice campaigned on that experience and has highlighted the importance of market access for Alberta oil during his time as premier so far."
World Energy News. Russia's state-controlled gas company Gazprom may drop its Vladivostok LNG project in Russia's Far East in favour of pipeline gas supplies to China, the firm's Chief Executive Alexei Miller told reporters … (today).
Fairbanks News Miner Op-Ed by Bruce Campbell. …no one has done more to impede and slow the development of Alaska’s natural gas than (Bill) Walker. If this is his idea of “support,” voters need to be wary of his claims to “support” any issue….
Huffington Post. Outside super PACs have played a major role supporting Sen. Mark Begich (D) as he faces a tough re-election race against former Alaska Natural Resources commissioner Dan Sullivan (R). (We recently analyzed the effect of this race on energy policy. -dh)
We certainly accept the premise of the New York Times article. Falling production is provoking economic anxiety, bordering on an economic crisis, in Alaska. Yet, it is also completely unnecessary, because there’s plenty of oil in Alaska. In its Annual Energy Outlook for 2014, the Energy Information Administration estimates that Alaska – alone – has 38 billion barrels of technically recoverable oil. Some of that oil is located on state lands, in the form of reserves at existing fields. But the lion’s share is in the Outer Continental Shelf (23 billion barrels), the non-wilderness portion of the Arctic Coastal Plain (over 10 billion barrels), and the National Petroleum Reserve-Alaska (roughly 1 billion barrels).
It’s also important to keep in mind that whenever Alaskans are actually allowed to look for oil, we tend to find more than expected. So in a massive state with huge swaths of land that remain unexplored, 38 billion barrels could ultimately prove to be an underestimate. Certainly, that was the case with Prudhoe Bay, which is now at 17 billion barrels produced and counting.
For today’s purposes, though, we’ll stick with EIA’s number: 38 billion barrels of oil. How much is that, exactly? Well, if produced at a rate of 1 million barrels per day, Alaska’s oil would last for 38,000 days – or about 104 years. If production is allowed to reach even higher rates, Alaska could have enough resource in the ground to replace nearly 30 years of oil imports from OPEC or more than 50 years of oil imports from the Persian Gulf.
The problem is that the federal government, which controls more than 60 percent of the land in Alaska, has repeatedly blocked efforts to develop our resources. Despite President Obama’s willingness to take credit for rising production on state and private lands in the Lower 48, his real record is best revealed in places like Alaska. He and his administration have repeatedly denied access to promising lands; blocked or delayed the approval of roads and bridges needed so that production can begin; and issued regulations that fail to hold up in court.
It’s usually more instructive to judge someone by their actions rather than their words, and the Obama administration is no different. The administration has now locked up half – more than 11 million acres – of the NPR-A, an area explicitly reserved for energy production. The administration is “revising” the management plan for the Arctic coastal plain; most interpret that as a plan to lock the area up as wilderness after the election, even though Congress has repeatedly rejected bills seeking the same. The administration is also rewriting its rules for offshore exploration in Alaska and subsequently delaying efforts to return to an area that was safely explored and successfully drilled more than 20 years ago.
President Obama is not pursuing an “all of the above” strategy in Alaska. Instead, his administration’s restrictions are now inducing levels of economic anxiety in local residents that the New York Times has deemed worthy of the national spotlight. We appreciate the coverage, but what we’d really like is a president and a Senate that will work with us to solve the problem – by producing more of Alaska’s energy.