TOP 10 OIL INDUSTRY MYTHS ABOUT ANWR DRILLING ANWR.org
1. Will drilling in the Arctic National Wildlife Refuge do anything to solve our current gasoline and heating oil supply problems and reduce prices? No. Most experts predict that oil production from the Arctic National Wildlife Refuge could not begin for 7 - 12 years and the Congressional Research Service estimates it would take at least 15 years. A new study by the US Energy Information Agency (March 2004) entitled Analysis of Oil and Gas Production in the Arctic National Wildlife Refuge (this is a PDF file that requires Adobe Acrobat Reader to view), shows that even if oil were being pumped today, it would only reduce our oil imports from about 70% to about 66%, having no real effect on overall prices or supply. Even if the oil were flowing today, OPEC could cut its supply slightly to compensate and prices would remain the same. In fact, we've been through this before. In 1978 oil first flowed through the Alaska Pipeline from Prudhoe Bay, which had much larger reserves than any estimates of Arctic Refuge Oil. Not only did prices not go down, they actually DOUBLED between 1978 and 1981. In 1978 the average national price per gallon was 60 cents. In 1981 it was more than $1.20. This historical information is available from the US Energy Information Administration. Claims that oil or gas prices will go down if we drill in the Arctic Refuge are flat out lies. 2. Are estimated oil supplies in the Arctic National Wildlife Refuge expected to significantly change our long term energy prospects? No. It is estimated that the coastal plain of the Arctic National Wildlife Refuge contains no more than a six month supply of oil at our current consumption rates. 3. Given the current war against terrorism, shouldn’t we do absolutely everything we can to maximize our oil supply to be self sufficient? No, it's not possible to be self sufficient given the amount of oil we consume as a nation. We use more oil than we could ever find domestically, even if we were to drill on all public lands, in all of our national parks and monuments, national forests, etc. The United States uses 25% to 30% of all of the oil produced in the world, yet we only have less than 3% of known oil reserves. These numbers are well known. The amount we could recover from the Arctic Refuge is literally a drop in the bucket by comparison. Also, any oil that is produced, regardless of its source, is bought and sold on the world market. That's how major commodities like this work. Even now, oil from Prudhoe Bay, Alaska, often is exported to Asia. The only way to really enhance national security is to develop alternatives that reduce oil consuption. Our current usage as well as archaic public policy that encourages more oil development and consumption is actually what puts our nation at risk. And why destroy a unique treasure for something that will make no difference in our reliance on foreign oil? 4. Is there evidence that increases in domestic oil supplies translate into savings at the gas pump. No. Crude oil prices and thus the prices at the pump are determined almost solely by OPEC, the Mid-Eastern cartel that controls the majority of the world’s oil supply. Because total known U.S. reserves represent only 2.8 percent of the world’s oil and our nation uses nearly a third of the world’s production. we are really powerless to influence prices in any meaningful way or to reduce our dependence on foreign oil. Back in 1977 when the Alaska pipeline was first opened the oil industry said we'd see lower prices. Prices have gone up considerably since then. In fact, between 1977 and 1981 gasoline prices MORE THAN DOUBLED all while the millions of gallons of Alaskan oil were being pumped. 5. Would the oil from the Arctic National Wildlife Refuge be used in the United States? Not necessarily. Under current laws and regulations, oil companies are allowed to sell oil produced in Alaska to foreign countries. A ban on selling such oil overseas was lifted in 1995 but the Alaska delegates are on record as opposing the reinstitution of a similar ban. 6. Would oil leasing in the Arctic National Wildlife Refuge bring significant revenues to the American public? Not necessarily, revenues are determined by the price of oil and the competitive nature of bidding for leasing rights. According to the Congressional Budget Office, if oil sells for $18 a barrel and the development produces 2.4 billion barrels of oil over a 10 year period, then the government will earn around $1.15 billion (with an equal amount going to the State of Alaska). However, should oil prices fall to $15 per barrel, leasing would not generate any significant proceeds. 7. Would oil leasing in the Arctic National Wildlife Refuge bring significant revenues to oil companies? Yes. While the American public is paying higher and higher prices for petroleum and natural gas products, the oil companies are celebrating a period of prosperity. Based on information reflecting the substantial rise in oil prices, Richard Fineberg, a respected Alaska analyst estimated as of April 2000 that the FY 2000 share of the revenue pie for the industry exceeded $2.8 billion in after-tax profits. 8. What species are put at risk through exploration, drilling and production? Wildlife and plant life that live in or use the seasonally rich coastal plain of the Arctic National Wildlife Refuge are triply at risk. First, oil exploration and extraction activities are concentrated in the refuge’s most critical and sensitive areas such as calving grounds for the Porcupine caribou herd and denning areas for one of America’s two polar bear populations. Second, because the impacts of oil and other chemical spills accumulate in areas such as air holes used by seals and other marine mammals, the impact of even small spills is magnified.
There, because many migrating bird species such as trumpeter swans and arctic terns visit the refuge in anticipation of a short, uninterrupted burst of food resources to feed themselves and develop their young prior to migration, disturbances of any duration could have populationwide impacts. And last, because the coastal plain is the biological heart of a huge arctic/subarctic ecosystem, harm to wildlife there would be expected to reverberate throughout the ecosystem. 9. Can the oil companies guarantee that there will be no spills in the refuge? No. In fact, the current rate of reportable spills on Alaska’s North Slope is about one per every 18 hours. 10. Do the oil companies have connections with the governmental proponents of drilling in the refuge? Yes. President George W. Bush:
Oil and gas firms have donated $1,761,567 to George Bush’s presidential campaign, making the oil and gas industry one of Bush’s top 10 contributors in Election 2000. Enron Corporation–which proclaimed itself as "the world’s leading energy company"- was one of President Bush’s top 10 donors, giving $113,800 to his 2000 presidential campaign. Enron was also Bush’s top career patron, giving $555,275 throughout Bush’s political career. The second greatest Bush career patron–donating $322,400-- is the Sanchez family of Laredo, Texas, owners of Sanchez-O’Brien Oil and Gas. Mr. Bush’s presidential recount fund shows $85,500 in donations from persons who work for oil and oil-affiliated industries. The Presidential Inaugural Committee has received $1,000,000 in funding from the oil and gas industries. Oil and gas companies have contributed at least $556,700 to Bush’s 1994 and 1998 gubernatorial campaigns, and an additional $944,733 in large contributions came from individuals affiliated with oil companies. George Bush is a former oil man himself, having owned the fairly unsuccessful Arbusto Energy Inc. and Bush Exploration. These companies, in 1984, merged with Spectrum 7 (Bush was named chairman and CEO), which was later bought by out Harken Oil and Gas in 1986.
Vice President Richard Cheney:
Mr. Cheney has been CEO of Halliburton Company–the world’s largest oil service company--since 1995. Halliburton has contributed in excess of $1,600,000 to federal candidates since the 1992 elections. Halliburton has a number of operations on the North Slope of Alaska that stand to benefit from increased oil production there. Cheney also serves on the Board of Directors and Public Policy Committee of the American Petroleum Institute. The oil and gas industry was the largest contributor to Cheney’s 1988 congressional race.
Secretary of Interior Gale Norton:
Ms. Norton has worked for the Mountain States Legal Foundation, which has received funding from Amoco, Marathon Oil, and Phillips Petroleum. Energy and natural resource interests contributed over a third of the financing of Norton’s 1996 Senate Race, with the oil and gas segment being her second largest contributor.
Secretary of Energy Spencer Abraham
Mr. Abraham received $211,771 from oil and gas companies in his recent Senate race, making him the fourth largest recipient of oil and gas contributions in the 2000 election. Oil and gas companies were among the top ten contributors to Abraham’s 1996 Senate Race, donating $108,850.