June 15 (UPI) — Oil production from an Alaskan wildlife refuge won’t take place for another decade at least and domestic needs by then are uncertain, a federal report found.
The U.S. tax reform passed late last year included language inserted by U.S. Sen. Lisa Murkowski, R-Alaska, that opened the so-called 1002 Area in the Arctic National Wildlife Refuge. Murkowski’s office said the 1002 Area is a non-wilderness portion of the refuge and her provision carved out only a “small portion” of the acreage for oil and gas drilling. The area in question represents about 8 percent of total ANWR acreage.
President Donald Trump said the parts of ANWR opened to drillers may rank in the top globally in terms of field potential. A study from the U.S. Geological Survey found as much as 10.4 billion barrels of oil could be considered commercial with oil priced at $30 per barrel. Brent crude oil, the global benchmark for the price of oil, was near $75 per barrel early Friday.
The U.S. Energy Information Administration reported in a daily briefing Friday that, under three different scenarios it looked at, production from ANWR wouldn’t start until 2031 “because of the time needed to acquire leases, explore, and develop the required production infrastructure.”
The Center for American Progress, a liberal-leaning group, said the push into the Arctic wilderness is reckless and perhaps non-commercial. Its analysis found oil and gas leases would generate about $37.5 million in federal revenue, “far short of the $1 billion to $1.8 billion that drilling proponents claim could be raised.”
The tax bill outlined two lease sales over the next 10 years. In his State of the State address in mid-January, Alaska Gov. Bill Walker said opening up ANWR was a clear signal from the Trump administration to develop natural resources to support an economy hobbled by the energy market collapse a few years ago.
As of June 8, the four-week moving average for Alaskan oil production was 493,000 barrels per day, 1.7 percent less than the same period last year.
The EIA said it’s been more than 30 years since the only well in ANWR was drilled and those results are confidential. Reserve estimates, meanwhile, are based on information from the mid-1980s.
Its 2018 reference case, meanwhile, found market dynamics could limit Alaskan production and the domestic appetite for more oil because, after 2040, improvements in fuel economy could limit domestic demand.
“For this reason, demand for additional Alaskan crude oil to be processed in its traditional market could be lower,” the report read.
The United States is exporting more of its own oil. Alaskan leaders, meanwhile, have been courting Asian economies, leaving the door open for oil clients overseas.