Wednesday, December 21, 2005

Alaska oil drilling myths

Ben Lieberman wrote in Washington Times Drilling for oil in Alaska's Arctic National Wildlife Refuge (ANWR) makes so much sense, it's no wonder opponents must twist the facts to make it controversial. Yesterday, at last, common sense prevailed when the House passed by 308-106 a bill to authorize development of ANWR.

Why couldn't they have just passed the budget reconciliation act where the Senate had already approved ANWR drilling?
We're talking about 10 billion barrels of domestic oil in an area where there has been a proven track record for environmentally responsible drilling. Yet a host of tall tales from environmental activists and like-minded journalists has made it a tough fight in Washington.
What they should have done is just insisted on the drillers using the environmentally sensitive techniques they have said they will use.
The current action in Congress involves adding ANWR drilling to the defense appropriations bill. Given continued high oil prices and political turmoil in many oil-producing nations, now seems to offer a good chance to get ANWR done. But this will finally occur only if the ANWR myths are exposed. Here are several:
  • ANWR drilling would harm the environment. Some perspective is helpful to understand the ecological insignificance of ANWR drilling. ANWR comprises 19 million acres in Northeast Alaska, 17.5 million of which are totally off-limits to drilling or any other kind of economic activity. This is why the news footage showing beautiful snowcapped mountains is misleading, because the drilling would not be allowed anywhere near those areas. Only the flat and featureless coastal plain would be affected, and even there only a small portion of its 1.5 million acres. The current version of the bill limits the surface disturbance to 2,000 acres, a small piece of a big coastal plain in a very big wildlife refuge in the biggest state in the Union.
    An area more like the size of a postage stamp on a huge sheet of paper.
  • Oil wells would despoil one of the few remaining pristine places. Again, the vast majority of ANWR will be completely unaffected by drilling. It would occur only on a small part of the coastal plain where there already is some human habitation. There are plenty of truly pristine places in Alaska worth preserving, but ANWR's coastal plain isn't one of them. As it is, Alaska has 141 million acres of protected lands, an area equal to the size of California and New York combined.
  • Drilling is incompatible with National Wildlife Refuges. Drilling critics have tried to confuse wildlife refuges with national parks, wilderness areas and other more highly protected categories of federal lands. But national wildlife refuges typically allow limited mining, logging, drilling, ranching or other activities. Indeed, the statute creating ANWR contemplated future oil production on the coastal plain, subject to congressional approval. It is worth noting that another wildlife refuge in Alaska, the Kenai National Wildlife Refuge, has had drilling onsite for decades. The oil production there rarely makes the news because it has not caused any problems, even though Kenai has far more wildlife than ANWR.
  • Oil development harms local wildlife. An extensive track record proves otherwise. In addition to Kenai, Alaska has oil drilling in the Prudhoe Bay field, only 55 miles west of ANWR. Prudhoe Bay has produced more than 10 billion barrels of oil since the 1970s, which has been transported through the Alaska pipeline to the domestic market in the Lower 48 states. Decades of studies show this oil production has affected the environment negligibly. Environmental opponents of drilling cannot cite a single species driven toward extinction or even a decline in numbers attributable to Prudhoe Bay. That drilling also was done with decades-old technology and methods far less environmentally sensitive than ANWR would require.
  • Caribou herds will be devastated. Environmentalists have been particularly excessive in predicting dire harm to the herd of caribou that migrate through ANWR. But the caribou migrating through Prudhoe Bay have increased from 3,000 to 23,000 since drilling began in 1977.
  • Alaskans oppose ANWR drilling. In fact, polls regularly show 75 percent or more of Alaskans support drilling. This includes the native Alaskans who live near the potential drilling site. But the few who oppose drilling get most of the media attention. Alaskans know firsthand that resource extraction can co-exist with environmental protection. They also know how silly are the environmental gloom-and-doom predictions: They have heard such nonsense for decades.
If the average American, and his or her representative in Congress, knew the facts as well as the average Alaskan, ANWR drilling wouldn't be controversial. Fortunately, it's not too late for the Senate to join the House's common-sense step and boost domestic oil supplies by allowing ANWR drilling.

33 comments:

Anonymous said...

Gosh, those are great talking points that Exxon provided to you...how much do they pay you to shill for them?

Anonymous said...

Maybe we shouldn't do it because we made a deal with the Canadians not to develop there....just a thought but maybe we should honor our words for a change.

Lazerlou said...

Some strange arguments in there. The amount of wildlife is somehow relevant to ecological concerns? I'm not sure anyone who wrote that has taken an ecology course or understand the implications of such disturbances.

Instead of drilling for oil in a wildlife refuge, why not support measures taken to deter consumption? Perhaps a tax on gasoline to price people out of using it? Maybe even greater regulation of fuel efficiency?

I know, such regulations and taxes would harm oil compnay profits, I mean economic growth. Perhaps you conservatives should take the time to read some physics, where you would discover that there is a difference between power and work. An analogy of economics to internal combustion: A ferrari is far less efficient and can't take you as far as a toyota on the same amount of gas. Higher output is generally less efficient all things being equal. Short term growth and economic benefit can actually be counterproductive in the long run if maximizing value is your goal.

Don Singleton said...

Maybe we shouldn't do it because we made a deal with the Canadians not to develop there....just a thought but maybe we should honor our words for a change.

Why on earth would we make a deal with a foreign nation not to develop resources on American soil?

The amount of wildlife is somehow relevant to ecological concerns?

Herds of Caribou do at least pass through the area as they migrate, as they do in Prudhoe Bay (and have grown since drilling there). I don't think very many plants migrate in the area.

Instead of drilling for oil in a wildlife refuge, why not support measures taken to deter consumption?

The recent Energy Bill included funds for many source of alternative energy, probably none of which will produce much results.

Anonymous said...

Will oil from ANWR go solely to domestic fuel production, or be sold as a commodity on the global oil market?

Lazerlou said...

Well, how about an energy bill with some teeth then? Alternative fuels are a distratcion while we allow our oil companies to extract every last drop of potential profit out of the ground. When Cheney says conservation is a personal virtue, you know we are f-ed.

How about an actual increase in taxes on gasoline sold to consumers? It would put us in line with the rest of the modern world and would keep mom from hopping in the SUV to go two block for a gallon of milk. Might even get people walking and healthier?
How about stepped up penalties on inefficient cars? A gas guzzler tax with teeth. Better how about funding and research for cold fusion (which is practically non-existent thanks to oil company lobbying - they'd rather advance natural gas as a viable alternative to oil for obvious reasons).

The only reason to justify drilling in some of our last protected wilderness is profit. It will do nothing to help our country decrease its dependance on foreign oil. I just wish conservatives were more honest about that and their motives. It is good for Alaskan workers and oil company owners/execs.

Pete said...

I do not think the Artic Drilling would have any significant environmental impact. The carribou would probably aprreciate a nice, warm, elevated pipeland to stand under during the worst of the winter.

But what it will do is open up our last pristine wilderness area. Once you put in roads and other improvements it will never be the same again. Not a tragedy. But why do it?

If we're lucky, it will generate enough oil to meet US needs for a few months, maybe 3/4 of a year if the most optimistic predictions are correct.

We should hold such oil in reserve for future needs while we make use of all the cheap, foreigh oil that is available. When the foreign oil starts drying up, we'll be very glad we still have some domestic reserves.

Of course, the real reason this keeps coming up has nothing to do with oil It has become a symbolic politic football, the Administration using it to show how they can impose their will on Congress and the Democrats fighting it to show they aren't powerless.

Don Singleton said...

Lazerlou

Well, how about an energy bill with some teeth then? Alternative fuels are a distratcion while we allow our oil companies to extract every last drop of potential profit out of the ground. When Cheney says conservation is a personal virtue, you know we are f-ed.

Do you not find it a vitrue?

How about an actual increase in taxes on gasoline sold to consumers? It would put us in line with the rest of the modern world and would keep mom from hopping in the SUV to go two block for a gallon of milk. Might even get people walking and healthier?

I might support it if the funds could be sequestered and used only for a particular purpose.

How about stepped up penalties on inefficient cars? A gas guzzler tax with teeth. Better how about funding and research for cold fusion (which is practically non-existent thanks to oil company lobbying - they'd rather advance natural gas as a viable alternative to oil for obvious reasons).

I dont think cold fusion has much promise, but I would like to see more use of nuclear power to generate electricity

The only reason to justify drilling in some of our last protected wilderness is profit. It will do nothing to help our country decrease its dependance on foreign oil. I just wish conservatives were more honest about that and their motives. It is good for Alaskan workers and oil company owners/execs.

How can you say that more domestic production will not decrease our dependence on foreign oil. If we could produce all we need domestically, we would have no need for foreign oil at all.

Pete:

I do not think the Artic Drilling would have any significant environmental impact. The carribou would probably aprreciate a nice, warm, elevated pipeland to stand under during the worst of the winter.

I agree completely. Certainly they have thrived in Purdhoe Bay

But what it will do is open up our last pristine wilderness area. Once you put in roads and other improvements it will never be the same again. Not a tragedy. But why do it?

As I understand it, the roads will be ice roads, i.e. they will disappear when the ice melts. And there is a good chance that the area will provide even more oil than Purdhoe Bay

If we're lucky, it will generate enough oil to meet US needs for a few months, maybe 3/4 of a year if the most optimistic predictions are correct.

That is not true; they can't tell until they drill, but there is a good chance that there is more oil there than Purdhoe Bay. And even if it was just a year's worth, it would be a year of total US requirements, including all of the oil we get from the Middle East, Venezuela, etc

We should hold such oil in reserve for future needs while we make use of all the cheap, foreigh oil that is available. When the foreign oil starts drying up, we'll be very glad we still have some domestic reserves.

But I thought you just said it was only a few months worth.

Of course, the real reason this keeps coming up has nothing to do with oil It has become a symbolic politic football, the Administration using it to show how they can impose their will on Congress and the Democrats fighting it to show they aren't powerless.

It certainly does not make sense to block exploration

Don Singleton said...

Will oil from ANWR go solely to domestic fuel production, or be sold as a commodity on the global oil market?

Why does it matter? As far east as it is, I suspect it will come down the pipeline, and that if anything is going to be sold to Japan it would be from Purdohe Bay, but if it was cheaper to ship it to Japan and pay for oil elsewhere to come to the Gulf Coast, why does it matter?

Lazerlou said...

Conservation may be a personal virtue, but it certainly isn't only a personal virtue. It should be (and is) a public policy issue as well as a personal virtue. Cheney was implying conservation is not the stuff governemnet policy should be concerned with, which is patently ridiculous and a poorly veiled excuse for his corrupt handouts to his oil exec buddies.

Cold fusion is nothing but promise-the promise of free electricity with no radioactive biproducts. What it might be is a physical impossibility, until we figure out a way to contain and control a fusion reaction.

Don Singleton said...

Conservation may be a personal virtue, but it certainly isn't only a personal virtue. It should be (and is) a public policy issue as well as a personal virtue. Cheney was implying conservation is not the stuff governemnet policy should be concerned with, which is patently ridiculous and a poorly veiled excuse for his corrupt handouts to his oil exec buddies.

By a government policy are you saying that the government should interfere with the free market and force manufacturers to make products that their customers do not want to buy?

Cold fusion is nothing but promise-the promise of free electricity with no radioactive biproducts. What it might be is a physical impossibility, until we figure out a way to contain and control a fusion reaction.

So in addition to expecting the government to force manufacturers to produce products people don't want to buy, you are recommending it spend money on a physical impossibility.

Lazerlou said...

Why yes, yes I am. Free market economic models only work when you assume unlimited natural resources.
And the governemnt interferes with the free market all the time. We don't allow people to buy or sell sex, we don't allow people, despite the demand, to buy crack, let alone pot, and we don't allow people to buy live grenades or kiddy porn.
Why so protective of individual consumer choices that are so obviously not made by any defensible exercise of individuality? You think the masses all individually choose to listen to Brittney Spears due to her musical merit? You think everyone who wants a Hummer does so out of an exercise of individual chocie? You give far too much weight to certain consumer preferences that should not get the same respect as other kinds of individual choices.
And I'm not for outright prohibition just using taxes to deter consumption, so if having a Hummer is that important to you, you can still get it, you'll just have to pay the appropriate price, factoring in all the externalities.

And harnessable fusion energy isn't a physicial impossibility (any more than splitting the atom was at one time), we just haven't figured out how to do it yet.

Don Singleton said...

Why yes, yes I am. Free market economic models only work when you assume unlimited natural resources.

Not at all. In fact if you have unlimited natural resources, it would be difficult to settle on a value for them.

But if you have 1000 gadgets, and I have 100 doodads, and if I want some gadgets, and you want some doodads, we can come up with an exchange rate for these two very limited products.


And the governemnt interferes with the free market all the time. We don't allow people to buy or sell sex, we don't allow people, despite the demand, to buy crack, let alone pot, and we don't allow people to buy live grenades or kiddy porn.

All of those things hurt the individual. Gas for their cars does not.

Why so protective of individual consumer choices that are so obviously not made by any defensible exercise of individuality? You think the masses all individually choose to listen to Brittney Spears due to her musical merit?

I would not know. I don't listen to her music. But that is my individual choice.

You think everyone who wants a Hummer does so out of an exercise of individual chocie? You give far too much weight to certain consumer preferences that should not get the same respect as other kinds of individual choices.

Considering how expensive they are, I can't imagine why anyone would buy one.

And I'm not for outright prohibition just using taxes to deter consumption, so if having a Hummer is that important to you, you can still get it, you'll just have to pay the appropriate price, factoring in all the externalities.

That is the way it is now, although I still won't buy one.

And harnessable fusion energy isn't a physicial impossibility (any more than splitting the atom was at one time), we just haven't figured out how to do it yet.

Good luck. But until you figure out how to do fusion, I think we should proceed with drilling in ANWR.

Lazerlou said...

Don, trust me on this one. Free market models depend on unlimited *natural resources,* not commodities. The limiting factor in classical economic models when it comes to natural resources is the rate at which business can process those resources, not limited availability.

Assault weapons, live grenades and Kiddie porn do not harm the individual purchasing the goods. Nor do restrictions on say purchasing bootleg movies or prohibitions on buying endangered species.

Finally, while I'm off trying to get cold fusion to work, you should be supporting substantive measures that will adress our energy crisis, namely controlling demand, not advancing bandaid solutions aimed at supply that solve nothing.

Anonymous said...

Interesting points made here. But allow me to toss in a few more.

First, the environmental impact would certainly be there, but I feel it would be minimal. Directional drilling techniques now allow a well to be drilled almost seven miles from the point of entry. A huge area could be developed from a single relatively small footprint.

So why not drill? Well, in the past there was a very good reason not to drill. No oil company wanted to. At least not without tax credits and royalty forgiveness which were included in every previous ANWR resolution.

Today with $50.00 plus per barrel oil I think it is economically feasible. But it would be interesting to see if the past tax credits and royalty forgiveness have been included in this apropriations bill.

However, the idea of keeping it in the ground for down the road does make a lot of sense. Why not burn up all of Nigeria, Angola or Venezuelan oil now and tap ANWR when oil is $100 plus per barrel as a way to ease the pain in what will by then be an unavoidable need to migrate to other energy sources?

Despite being in the oil business, I've always opposed past attempts to open ANWR purely for economic reasons. With the economics now being more feasible, I could be convinced to change my mind. But you'd have to answer the "why not save it for later" question first.

As to the idea of independance from foriegn oil producers, that's pure myth and quite frankly total BS. We will never be independant from foreign producers even if we produced 100% of our energy needs domestically.

Unless you believe an administration, Republican or Democrat, would ever attempt to nationalize US oil companies. Especially considering the fact that it's almost impossible to define what a "US Oil Company" is these days.

Anonymous said...

Who gets the money?

When they drill ANWR, who gets the money from the sale of oil? Does it go to the Federal Government, with a percentage taken out to pay the drillers?

Forgive me for doubting, but I have a feeling all that cash will go straight to an oil company who bought the land at well below any conceivable market value.

Sure, maybe we'll save money on gas. Want to take a bet? I doubt I'll notice anything at all. The amount of oil there is a drop in the lake.

Don Singleton said...

Who gets the money?

When they drill ANWR, who gets the money from the sale of oil? Does it go to the Federal Government, with a percentage taken out to pay the drillers?


I believe the Feds get half, and the state of Alaksa gets half.

Forgive me for doubting, but I have a feeling all that cash will go straight to an oil company who bought the land at well below any conceivable market value.

I dont think they have sold the land. They may have sold drilling rights.

Sure, maybe we'll save money on gas. Want to take a bet? I doubt I'll notice anything at all. The amount of oil there is a drop in the lake.

A very big drop in a very small lake. If it was as little as you suggest then why not let them do it, and they will be out of there once they collect the "drop"

Interesting points made here. But allow me to toss in a few more.

First, the environmental impact would certainly be there, but I feel it would be minimal. Directional drilling techniques now allow a well to be drilled almost seven miles from the point of entry. A huge area could be developed from a single relatively small footprint.


I agree.

So why not drill? Well, in the past there was a very good reason not to drill. No oil company wanted to. At least not without tax credits and royalty forgiveness which were included in every previous ANWR resolution.

Simple answer. Allow drilling, but no tax credits and no royalty forgiveness

Today with $50.00 plus per barrel oil I think it is economically feasible. But it would be interesting to see if the past tax credits and royalty forgiveness have been included in this apropriations bill.

I looked and could not find it

However, the idea of keeping it in the ground for down the road does make a lot of sense. Why not burn up all of Nigeria, Angola or Venezuelan oil now and tap ANWR when oil is $100 plus per barrel as a way to ease the pain in what will by then be an unavoidable need to migrate to other energy sources?

We need it now.

Despite being in the oil business, I've always opposed past attempts to open ANWR purely for economic reasons. With the economics now being more feasible, I could be convinced to change my mind. But you'd have to answer the "why not save it for later" question first.

As to the idea of independance from foriegn oil producers, that's pure myth and quite frankly total BS. We will never be independant from foreign producers even if we produced 100% of our energy needs domestically.


If we produce 100% why would we be dependent on them?

Unless you believe an administration, Republican or Democrat, would ever attempt to nationalize US oil companies. Especially considering the fact that it's almost impossible to define what a "US Oil Company" is these days.

I doubt they will be nationalized, but not certain our sources wont nationalize

Don, trust me on this one. Free market models depend on unlimited *natural resources,* not commodities. The limiting factor in classical economic models when it comes to natural resources is the rate at which business can process those resources, not limited availability.

Since no natural resources are unlimited, I guess you are saying there is no such thing as a free market.

Assault weapons, live grenades and Kiddie porn do not harm the individual purchasing the goods. Nor do restrictions on say purchasing bootleg movies or prohibitions on buying endangered species.

On the first two, they could hurt the purchaser, and certainly hurt others; kiddie porn certainly may encourage child molestation.

Finally, while I'm off trying to get cold fusion to work, you should be supporting substantive measures that will adress our energy crisis, namely controlling demand, not advancing bandaid solutions aimed at supply that solve nothing.

I would rather push for more nuclear energy for electricity production, and increased supply for petroleum

Lazerlou said...

"Since no natural resources are unlimited, I guess you are saying there is no such thing as a free market."

Huh? Get thee to logic 101. based on what I said I would be arguing there is no such thing as an accurate free market model given that natural resources are limited. However some are more limited than others, so approaching the problem from an economic standpoint and protecting the integrity of the free market is only justifyible in situations where natural resources are not strained. You were arguing against regulating consumption based on a free market principles. That is fine so long as the free market is the best way to mazimize utility in that particular situation. In this situation, it is not.
All I am saying is that free market models break down when there is not a presumption of limitless resources. You had cited the free market and individual choice as some kind of mytical creature and the reason why it is wrong to regulate consumption. I can only buy that in terms of utilitarian economic reasoning. Such reasonsing breaks down in this situation.

Anonymous said...

Don Simpleton,

The ANWR holds so little oil that it may supplement -- not cover -- the U.S. needs for, perhaps, two years...

I know that you, rightnutters, being (par for the course) totally ignorant of the realities of supply and demand for petroleum products, have zero clue about the issue.

So, if, perhaps, you were willing to educate yourselves before you open your ideological mouths, the debate over he ANWR's opening to drilling would be meaningful.

Unfortunately, you rightnutters, are oblivious to rational thinking. You just buy the line of the Administration and you run with it.

God forbids you would actually do some research on your own, and have a scholarly approach to the issue. As in pondering all opinions and research on the issue and form your own opinion.

I guess that you, mindless followers of this Administration, are too dumb to form your own opinions. You are mindless sheep.

Heil Bush! If you, morons, believe that drilling for oil in the ANWR will help you drive your ridiculous, gas-guzzling, SUVs, to the next mall, you are in for a surprise!

Society would be much better off if you got your obese asses out off your SUVs and actually walk once in a while!

Emergency rooms would be a whole lot less crowded (and a lot less costly to the taxpayer) if you, rightnutters, lived in a responsible way.

You, rightnutters, are a sourge on U.S. society.

Don Singleton said...

"Since no natural resources are unlimited, I guess you are saying there is no such thing as a free market."

Huh? Get thee to logic 101. based on what I said I would be arguing there is no such thing as an accurate free market model given that natural resources are limited. However some are more limited than others, so approaching the problem from an economic standpoint and protecting the integrity of the free market is only justifyible in situations where natural resources are not strained. You were arguing against regulating consumption based on a free market principles. That is fine so long as the free market is the best way to mazimize utility in that particular situation. In this situation, it is not.


The free market is the regulating mechanism. The price of a limited resource (like gasoline) is defined by the intersection of the supply and demand curves. If the price I am willing to pay for gas is less than the price established by the market, then I need to walk or drive a bicycle.

All I am saying is that free market models break down when there is not a presumption of limitless resources. You had cited the free market and individual choice as some kind of mytical creature and the reason why it is wrong to regulate consumption. I can only buy that in terms of utilitarian economic reasoning. Such reasonsing breaks down in this situation.


The ANWR holds so little oil that it may supplement -- not cover -- the U.S. needs for, perhaps, two years...

If it held as little oil as you think, then let them drain it, and the issue will be moot. In fact there is probably more oil there than there was in Prudhoe Bay, which has been producing for many years since it was expected to dry up.

I know that you, rightnutters, being (par for the course) totally ignorant of the realities of supply and demand for petroleum products, have zero clue about the issue.

And left wing moonbats think they now everything?

So, if, perhaps, you were willing to educate yourselves before you open your ideological mouths, the debate over he ANWR's opening to drilling would be meaningful.

I am very well read on the subject. Perhaps it is you that needs to do something other than reading Democratic talking points

Unfortunately, you rightnutters, are oblivious to rational thinking. You just buy the line of the Administration and you run with it.

And you just buy the Democratic talking points

.... If you, morons, believe that drilling for oil in the ANWR will help you drive your ridiculous, gas-guzzling, SUVs, to the next mall, you are in for a surprise!

I don't have an SUV. I have a ten year old Buick.

Anonymous said...

Interesting comments. Lots of tangents. I would like to put in a few comments. First, some history: As a lifelong Alaskan (born here, but not native), I have been around to see the benefits, consequenses, and machinations of oil on this state. ANWR has been a hotbutton issue in these parts for years. The classic arguments of local control and benefit, environment, and a myriad of other issues are rehashed in the local news almost daily. It is rare to open the largest paper (Anchorage Daily News) and not read at least one letter espousing the virtue or vice of opening ANWR. Ever since the "discovery" of Alaska by foriegn ("Russians, Americans, et.") opportunists and exporters, this state has been subject to amazing boom and bust cycles. Fur, fish, timber, minerals, and oil (along with a relatively low population) have been the pablum that has made this state as wealthy as it is today. Extracting limited natural resources is not without its problems, however. When the resource is gone, or the market finds a cheaper source, the money, and oftentimes the people it originaly brought vanishes as well. Not surprisingly, when Prudhoe Bay was brought on line, the flood of money was, to put it mildly, astonishing. Every urban and some rural schools suddednly had everything they needed (including the highest teacher salaries in the nation), public works projects were just a rubber stamp away, and development (oftentimes reckless and short sighted) was rampant. The population of this state was greatly inflated by both out of state workers looking to cash in and those who came to stay. When state coffers were overflowing, the previously Democratic legistalure, mayors, and other public servants were mostly replaced by oil backed Republicans and other industry-connected individuals. A few Democrats survived, mostly by taking a pro oil, populist stance. Then, the oil started to dry up. The bust of the late eighties decimatied the economy of this state. Formerly high paying oil jobs were downgraded and became scarce. Some people just left. Some stayed for "quality of life," family, etc. Some simply couldn't afford to leave. My folks moved here before the oil and were not directly connected to the oil industry. We stayed. The State wallowed in an economic downturn for years and only recently came out of its yearly budget crisis. Of course this is due to the price of oil (high and low). In fact, the state budget is based in large part on the projected price of crude for the year. Alaska does not have an income tax and property taxes are relatively low compared to other states. Oil royalties and taxes are the lifeblood of the budget. During the bust, politics in this state shifted focus to the consequences of oil prosperity. The Republicans maintained control and the unfinished projects, suddenly underfunded schools, and other issues became troublesome burdens best blamed on Democrats and whining freeloaders. Our veteran congressional delegation (two originally appointed, not elected) relied heavily on their oil connections to get a lot of federal money into the state. Lots of quid pro quo and outright bullying in the house and senate has made Alaska one of the largest recepients of pork per capita in US history.

Now ANWR looms. Some folks here in the state see it as the next Prudhoe Bay. Some see it as a band-aid to shore up diminishing returns on Prudhoe Bay. Quite a few simply see it as something that will provide some ambiguous statewide benefit. One of the many things that one must consider when dealing with ANWR in this day and age is that, unlike Prudhoe Bay, the oil machinery, both literally and figuratively, is already in place. Prudhoe Bay money had a shotgun effect at first- spreading wealth far and fast to quite a few people. The scramble to consolidate money and power took a few years to really get up and running. Now, the oil companies are fewer and vastly more powerful than in the seventies, the stakes (and the price of oil) are much higher, and those who stand to benefit most are poised to reap potentially huge profits from ANWR. British Petoleum, Anadarko, Conoco Phillips, and other associated companies literally write legislation in this state. A majority of the "independent, individualist Alaskans" have been transformed into arrogant, spoiled, entitled, complicit lap dogs to a lifestyle fostered and encouraged by oil companies and lock-step politicians. These folks would do just about anything to keep the marginally good times rolling. Unfortunately, quite a few of these people weren't around during the bust of the eighties. Amazingly, there is a pervasive attitude that the oil and money will flow indefinitely. This is a fine notion, but other, easier, resources are being opened up and will come on line long before the first ice road is built along the coastal plain of ANWR. What happens when it is cheaper to buy oil from Africa than to drill for, transport, process (Alaskan oil is what is known as "heavy crude"), and distribute ANWR oil? America will buy the cheaper option (from the same companies drilling in ANWR) and there will be a massive, cold white elephant way up north that may or may not provide enough oil to get America through a few years of increasing consumption. What if ANWR pans out and produces all of the oil promised? Oil companies become richer (as an avowed capitalist, that's fine with me) and America gets a boost of about 2-4% of domestic oil into its overall supply. Alaska undergoes another boom. Eventually, the oil runs out and the focus turns to Califonia, the Gulf Coast, Alberta, and elsewhere. The same problem of supply exists, only now ANWR is no longer in the picture.

Finally, my two cents: Even with the rosiest forecasts, ANWR is not a panacea to this country's oil woes.

Drilling in ANWR, a federally protected refuge, will set a precedent for other resource extraction around the country. How will you feel when it is in your back yard?

The Kenai rigs exist under a very complicated state/federal mineral rights extraction agreement. These rigs and their pipelines occasionally spill and leak. The companies that run them are required to file environmental reports regularly and have been fined in the past.

It defies all logic that to reduce our dependence on oil, we need to consume more.

The price of oil is set by the world market. ANWR is much too small to have a significant effect. The price at the pump will be virtually unaffected.

Environmentally speaking, Prudhoe Bay is not the pristine environmental Disneyland that some would have you believe. Small spills happen quite frequently. Pipelines leak. There are literally thousands of miles of small pipelines crisscrossing the tundra. Unfortunately, the vegetation that they leak on is incredibly fragile and simply will not fully recover in our lifetime. This may or may not be of import to some, but as a point, it needs to be aired.

Conservation is not the ultimate solution, but it is a part of it. A paradigm shift towards alternative fuels, a less consumptive lifestyle, and a greater awareness of energy and waste are all steps toward independence. I wish that I had the ultimate answer to our energy pickle, but until I have an epiphany, I feel that these are good steps.

One last point: Imagine if all of the time and energy that is going into this debate about ANWR was channeled into researching and developing a sustainable solution to this energy problem. Actually, imagine if just 10% of all the time and money spent on oil over the last 100 years were channeled into researching and developing sustainable energy sources. Just imagine where this world would be...

Don Singleton said...

As you indicated Prudhoe Bay is drying up so the state needs the revenue from ANWR.

It will take a number of years before production really starts rolling, so about the time Prudhoe Bay really does dry up you would begin getting ANWR revenue

I suspect that ANWR will keep Alaska going for a very long time.

If you are concerned about leaks, don't block ANWR, just make sure the legislation is in place to make sure the oil companies have a major incentive to stop as many leaks as possible, and clean up any that do occur.

I would be happy if we did further exploration on government lands here (but I think Oklahoma probably has about all the oil wells the subscrata can support.

I would also like to see more refineries built, and in parts of the country other than the Gulf Coast (so they are not all targets of hurricanes)

Anonymous said...

ANWR is just a huge welfare handout to a state full of useless pigs that can't stop feeding at the federal trough. It's not enough that the bastard Alaskans have their scumbag senators Murkowski and Stevens and their scumbag congresscritter Don Young rip off the lower 48 states (Alaskans get back $1.89 every dollar they send off to Washington.). It's not enough that Alaskans live in a state where they receive a welfare payment from the government every year just for living there. No, these scumbags want to get more money by drilling on federal lands. Screw 'em. Making Alaska a state was a huge mistake, it's a drain on the rest of the US and Alaskans should be stripped of their representation in Congress as all they use it for is voting for more pork for their state in the form of bridges to nowhere, federally subsidised timber cutting programs in the Tongass that cost taxpayers $10 for every dollar of lumber harvested and drilling on federal lands.

Anonymous said...

Also you have to remember that Don is a 62 year old cripple (physical and moral). He's not going to be around much longer so why should he care if the environment gets trashed. Nope, Don just hammers a few more Oxycodone and then goes out and rehashes GOP talking points.

Don Singleton said...

ANWR is just a huge welfare handout to a state full of useless pigs that can't stop feeding at the federal trough. It's not enough that the bastard Alaskans have their scumbag senators Murkowski and Stevens and their scumbag congresscritter Don Young rip off the lower 48 states (Alaskans get back $1.89 every dollar they send off to Washington.)

I dont support things like the bridges to nowhere, but I would not deny them just to Alaska, but I would like to see all earmarks go away.

It's not enough that Alaskans live in a state where they receive a welfare payment from the government every year just for living there. No, these scumbags want to get more money by drilling on federal lands.

Why should the Federal Government own major portions of a state, and prevent the state from doing as it wants with the land?

Screw 'em. Making Alaska a state was a huge mistake,

With global warming most if it will melt.

it's a drain on the rest of the US and Alaskans should be stripped of their representation in Congress as all they use it for is voting for more pork for their state in the form of bridges to nowhere, federally subsidised timber cutting programs in the Tongass that cost taxpayers $10 for every dollar of lumber harvested and drilling on federal lands.

As I said earlier I oppose all earmarks, including bridges to nowhere, but see no problem with the state controlling lumber harvesting and drilling in their state.

It is true that I am physically disabled, but that is better than being mentally disabled, like some I could name, and I dont take pain meds

Alaskan form. Anon said...

Wow,

What a timely response.

The state could use all the revenue it can get right now. Our current governor (former senator Frank Murkowski) and the legislature like to spend it on all manner of projects that woo outside mining, timber, and oil companies. There's also a couple of bridges you may have heard about (one of your senators certainly has) that will need to be funded now that the earmarks have been removed. The Governor's new jet also needs gas. In the beginning of the PB oil boom, the state actually received quite a bit of money from oil revenues. As times got tough and politicians became cheaper, however, the revenue sharing and royalties became leaner. Oil companies found it more profitable to cut back production and force a more oil company favorable agreement than to continue pumping. Essentially saying to Alaska: "We'd love to stay, but the oil is drying up and we can make more money elsewhere. Unless you let us keep more of the money we make from your oil, we will leave your state in an economic shambles." This ploy worked and now Alaska keeps less revenue from oil, less oil comes down the pipeline, and the oil companies hold a sword of Damacles over the heads of Alaskans. ANWR will most likely fall under this same deal. So, as I indicated in my previous comment, because the financial machinery is in place, those who stand to profit most from ANWR are poised to reap maximum benefit at the expense of the state. Don't get me wrong, Alaska will receive some cash- the Gov. and Legislature have to keep up appearances. I am often perplexed as to why with the price of oil as high as it is, this state always manages to just barely fund education and road maintenance, but will somehow fund a bridge or new road in or to the middle of nowhere at usually a million dollars per mile minimum.

One point that really needs to be made before we go any further is that you are assuming that ANWR will actually produce oil. Just a few years ago, the oil companies invested heavily in two super-duper can't miss fields called Alpine and Kuparuk. Smaller than Prudhoe Bay, but very promising. The state jumped on board with tax breaks and other perks, the oil companies produced an ad campaign telling Alaskans just how rich we were all going to be, and the future looked bright. There was relatively little public opposition to the fields- after all, they weren't in a wildlife refuge or something like that. Guess what. These super duper fields didn't and haven't even come close to the projections. Come to think of it, Prudhoe Bay has not lived up to the rosy projections either. Anyway, the state was left holding most of the bag, the oil companies merged, sold, and cut losses, and attention shifted east of Prudhoe Bay to ANWR.

As far as a production timeline is concerned, the most optomistic figures for actual oil through the pipeline are between seven and ten years. A lot can happen in that time frame. Your cold fusion commenter may find his holy grail, other resources may come on line, or a whole myriad of factors may change the world so fundamentally, that ANWR will be an afterthought. Who knows?

Legislate away the leaks? In addition to laws regarding spills and leaks, the oil companies already have tremendous incentive to prevent leaks and spills- money. Every drop of crude from the North Slope is precious. Hardly a quart is unaccounted for. When a feeder line ruptures, it costs thousands of dollars per hour. The spill response measures are swift and often highly scrutinized. Incidentally, there is a law on the books that makes shooting the trans-Alaska pipeline a federal offense with severe penalties (I believe ten years is the number that I read in the paper). This "incentive" didn't stop some dude up north from shooting and rupturing the pipeline. This little plink cost several million dollars per hour in addition to spilling thousands of gallons of oil onto the pristine Alaska landscape. This also brings up the vulnerability of the supply of oil from ANWR. I wonder how much it would add to the cost of a barrel of oil to guard every mile of the pipeline?

Unlike yourself, the sight of drilling rigs does not fill my heart with joy. Just because oil is there does not mean that it has to be drilled. There is value in untouched wilderness. When there is little to no wilderness left the value will become apparent. I realize that beauty is subjective, but this area is unique and rightfully set aside for preservation. As an aside, the 2000 acre footprint is a bit misleading. While the rigs can be as small as a good sized house, the feeder lines that carry all of that oil back to the terminal will have to run for miles. These lines are all above ground and necessarily visible.

Alaska actually has a refinery here in the state. Strange how we still pay $2.33 (in Anchorage)for unleaded. Interestingly, there are more than 42 refineries currently off-line in the US. They were taken off-line by- you guessed it- oil companies. Amazing what happens to the price of gas when a scarcity (artificial or otherwise) is created.

Looking forward to your comments...

Don Singleton said...

The state could use all the revenue it can get right now. Our current governor (former senator Frank Murkowski) and the legislature like to spend it on all manner of projects that woo outside mining, timber, and oil companies.

I don't vote for your state legislators and Governor. You will have to take that one up with other Alaskans

There's also a couple of bridges you may have heard about (one of your senators certainly has) that will need to be funded now that the earmarks have been removed.

Actually you got the money for them, just without the earmark. And I would be very surprised if Alaska decides to build the bridges. When you have a Senator chairing the appropriations committee you get all sort of earmarks, but if you are spending your own money you would have to be fools to build bridges to nowhere.

The Governor's new jet also needs gas. In the beginning of the PB oil boom, the state actually received quite a bit of money from oil revenues. As times got tough and politicians became cheaper, however, the revenue sharing and royalties became leaner. Oil companies found it more profitable to cut back production and force a more oil company favorable agreement than to continue pumping. Essentially saying to Alaska: "We'd love to stay, but the oil is drying up and we can make more money elsewhere. Unless you let us keep more of the money we make from your oil, we will leave your state in an economic shambles." This ploy worked and now Alaska keeps less revenue from oil, less oil comes down the pipeline, and the oil companies hold a sword of Damacles over the heads of Alaskans.

Again I don't make internal Alaska policy, or vote for those that do.

ANWR will most likely fall under this same deal.

I may be wrong, but I thought it was a 50/50 split.

.... One point that really needs to be made before we go any further is that you are assuming that ANWR will actually produce oil. Just a few years ago, the oil companies invested heavily in two super-duper can't miss fields called Alpine and Kuparuk. Smaller than Prudhoe Bay, but very promising. The state jumped on board with tax breaks and other perks, the oil companies produced an ad campaign telling Alaskans just how rich we were all going to be, and the future looked bright. There was relatively little public opposition to the fields- after all, they weren't in a wildlife refuge or something like that. Guess what. These super duper fields didn't and haven't even come close to the projections.

Drilling for oil is always a gamble; maybe that is why they want a bigger share of Prudhoe.

Come to think of it, Prudhoe Bay has not lived up to the rosy projections either.

It is producing a lot MORE than when it was first drilled.

Anyway, the state was left holding most of the bag, the oil companies merged, sold, and cut losses, and attention shifted east of Prudhoe Bay to ANWR.

As far as a production timeline is concerned, the most optomistic figures for actual oil through the pipeline are between seven and ten years. A lot can happen in that time frame. Your cold fusion commenter may find his holy grail, other resources may come on line, or a whole myriad of factors may change the world so fundamentally, that ANWR will be an afterthought. Who knows?


Anything can happen, but I suspect we will still need the domestic sources in 7 to 10 years

Legislate away the leaks? In addition to laws regarding spills and leaks, the oil companies already have tremendous incentive to prevent leaks and spills- money. Every drop of crude from the North Slope is precious. Hardly a quart is unaccounted for. When a feeder line ruptures, it costs thousands of dollars per hour. The spill response measures are swift and often highly scrutinized. Incidentally, there is a law on the books that makes shooting the trans-Alaska pipeline a federal offense with severe penalties (I believe ten years is the number that I read in the paper). This "incentive" didn't stop some dude up north from shooting and rupturing the pipeline. This little plink cost several million dollars per hour in addition to spilling thousands of gallons of oil onto the pristine Alaska landscape. This also brings up the vulnerability of the supply of oil from ANWR. I wonder how much it would add to the cost of a barrel of oil to guard every mile of the pipeline?

Do you guard every mile of the current pipeline just because of one crazy?

Unlike yourself, the sight of drilling rigs does not fill my heart with joy. Just because oil is there does not mean that it has to be drilled. There is value in untouched wilderness.

Most of the value is in the parts of the wilderness far from the projected drilling site.

When there is little to no wilderness left the value will become apparent. I realize that beauty is subjective, but this area is unique and rightfully set aside for preservation. As an aside, the 2000 acre footprint is a bit misleading. While the rigs can be as small as a good sized house, the feeder lines that carry all of that oil back to the terminal will have to run for miles. These lines are all above ground and necessarily visible.

Alaska actually has a refinery here in the state. Strange how we still pay $2.33 (in Anchorage)for unleaded. Interestingly, there are more than 42 refineries currently off-line in the US. They were taken off-line by- you guessed it- oil companies.


Actually environmental demands took most of them offline.

Amazing what happens to the price of gas when a scarcity (artificial or otherwise) is created.

Alaskan form. anon said...

Don,

Timely comments.

This discussion has really got me thinking. I was beginning to see a degeneration in the conversation, so I actually went out and sought some advice and comments from some friends of mine that actually work in the oil fields on the North Slope. I actually play hockey with four drilling engineers from BP, a friend that I grew up with is a geologist with a drilling company (formerly with Schlumberger), his father was an engineer with Schlumberger for 20+ years on the slope (two weeks on two weeks off for 20+ years) and actually worked on the original infrastructure and drilling starting in '67, and for about four years, I played hockey on a team sponsored by and populated with BP employees (mostly North Slope engineers, some local corporate). These guys were a fount of ingformation let me tell you. I was really taken aback by some of their comments and facts concerning ANWR and the state of drilling and extraction here in Alaska. I'll get to their points in a few, but first I'd like to address you comments...

As far as the governor and legislature are concerned: The best government money can buy is not just a saying up here. To play ball in the political arena, one must have money. An inordinate amount of that money comes from oil. If a candidate doesn't take a pro-oil, pro-development stance, there is a very good chance that the oil companies will put someone in who does and then finance them very, very well. In a perfect world, candidates would be judged on their merits, integrity, etc. This, unfortunately is simply not true, especially in Alaska. Smear campaigns, nepotism, cronyism, and outright fraud are rampant in this system (I could argue this is the case nationally as well). There are a number of Alaskans who are not knee-jerk Rpublicans or Democrats, but their numbers are small compared to those who simply vote according to party lines, the latest ad, or most often, the guy who promises them that once he's in, they won't have to think about politics and how it affects them for the next four to six years. To illustrate, Frank Murkowski has the second lowest approval rating of all of the governors in this country, yet he is seriously talking about a re-election campaign and getting "support" thanks in no small part from oil, mining, and gas companies. This support will "grow" as the election draws nearer. Amazing. He is currently conducting "secret" gas line negotiations with oil companies most likely because any sunlight on the negotiations would reveal a lopsided deal that enriches not Alaskans, but those in power and in the money. I could go on about the roads to nowhere paid for with YOUR money (your federal taxes), the famous bridges that benefit in great part the Murkowski and Young friends and families (again, YOUR MONEY), the Ted Stevens investment enrichment scam (100+% over three years) thanks to inside information, and a varitable circus of both federal and state pork projects. To get to the point, most of the money coming into the state is funneled into an apparatus that is set up to greatly enrich a few while the majority of the population gets a mush smaller percentage. Every year, steps are put in place to rectify this and every year, steps are taken to dismantle them. It is an uphill battle that sees some progress, but with the advent of ANWR and its possible wealth, an undercurrent has grown geared toward putting that wealth into the hands of a few rather than benefitting a majority of Alaskans and, by extention, you folks in the lower 48. Jobs are great, but when you see the disparity between the average wage and the top guys' salaries, it raises some questions. Don't get me wrong, I am an avowed capitalist and don't begrudge anyone their money, but please realize that there is quite a bit of high-money politicking that goes into the- dare I say it- "distribution of wealth."

Earmarks. As you know, the earmarks were removed from the "bridges to nowhere." Despite that removal, Governor Mrukowski placed the maximum allowable amount ofthat money ($90+ million) back into the bridges. As far as the rest of it goes, quite a bit has been put towards projects like the 40 million dollar road to nowhere through one of the most avalanche-prone areas in the entire United States. Ooops, I maen the raod to the newly proposed gold mine west of Juneau that wouldn't even have been considered had the mining company been required to pay for said raod. The rest of the cash? Going toward road maintenance for roads originally paid for by your federal taxes, road improvements on those same roads, and various other projects. As above, a good amount of that money somehow finds its way to a very small percentage of well-connected folks. A flawed system that is only too ready to accept ANWR.

The ANWR money distribution: The numbers change almost weeky. When it is favorable, Artic Power (our state funded ANWR lobby)trots them out. When they become more like the current (some would say unfavorable) distribution, Arctic Power starts "working on it." They have "worked on it" at least a dozen times. What this should say to you is that the oil companies hold almost all of the cards and they know it. If the state asks for too much, the companies will lease, but won't drill. Effectively locking up ANWR until it is most favorable for them. This happens all the time. In fact the state is currently locked in battle with a gas company for doing just that with some fairly large gas fields. If the Exxon Valdez court debacle is any indication (20+ years and still under appeals), I think that this issue will not be answered for a very long time. Bottom line: A promise from an oil company is not worth the paper is is written on. And besides, the oil companies are in business to make money, not accomodate you, the state, the government, or anyone else for that matter, so until the folks in this world decide that it really is in their best interest to decrease dependence and eventually start using oil much more efficiently, this will be the situation.

Of course Prudhoe Bay is producing more than when it was first drilled. There are more wells, rigs and infrastructure. The projections for Prudhoe (according to my engineer friend who actually worked on the original wells and for 20+ years on the North Slope) were that it would produce at near peak volume through 2012 (rosiest estimates). In 1988, the decline began and the scramble began to find new untapped field. Between profitability estimates, mergers, and acquisitions, oil companies have been using the latest technology to squeeze every drop of oil out of that field.

As far as domestic sources of oil are concerned, until the US collectively decides to cut its consumption by about 80-95% (forgive me, this is an estimate from a not so reliable source), domestic oil cannot ever fuel our need all by itself. Besides, oil is finite. It will run out eventually. What will we do when it goes away or becomes too expensive? Technology? Maybe. Coal? Likely. I really don't know. This is a question that really deserves quite a bit more time than I currently have.

Guarding the pipeline. Currently, there are a fleet of helicoprters that survey the entire pipeline on a continuous basis. Mostly looking for structural problems. They fly every day that the weather allows. Since 9/11, the number of flights, helicopters, and actual security measures have become secret even to oil company employees not directly involved. Remember that a majority of the 700+ mile pipeline is in wilderness. So its vulnerability to "just one crazy" has proven real and is being taken seriously. So to answer your question, yes, apparently, one does need to guard every mile of the pipeline. Especially as it becomes more precious.

Wilderness Value. As I said before, beauty is subjective. Some find beauty in vast, untouched coastal plains, others find beauty in pipelines, airstrips, gravel mines, and drill rigs running across that coastal plain. I would encourage you to come to Alaska and see ANWR one of these days and decide for yourself. Heck I'll even go with you. One of the guys that I work with guides out there and I'm sure that he would be happy to show us around. He's an amazing camp cook as well. If higher value is placed on something as it becomes scarcer, then I would argue that the Arctic Coastal Plain is quite valuable in that it is one of the last easily accessible places on this planet with an untouched coastline.

Environmental demands and refineries: If refining capacity is so valuable, why wouldn't companies invest in upgrades to comply with environmental demands? The remaining operational refineries seem to be operating under these demands. I recall a time when coal powered power plants were required to "scrub" their emissions, they cried bloody murder, but they were forced to do it. I am running out of time, but I would love to continue the refinery question later.

New thought: After talking with some frinds in the oil industry, I came away with some new understanding and some new questions. One of the big ones was "Well, what does this guy (you, Don Singleton) see as the benefit of drilling in ANWR? How does he think that it will positively or negatively affect him and others?" This, I was told is the question that exploration divisions and companies put to themselves to help determine and develop feasability, PR, and other factors. Some more from a geologist this time: "The coastal plain is huge. I've surveyed there. We (the oil companies)are going to be spread out all over the place." When I asked if there was oil there he said: "Maybe, maybe not. There are good indications in some areas, but it's always a crap shoot to some degree. To find out, we've got to at least test drill." Test drilling involves at least 20 acres of industrial structure and a fiarly large investment. I asked a frind who works in the financial department over at BP what she thought of the notion that ANWR would provide lots of jobs for Americans. Her response: "If you count every store clerk, lawnmower, carpenter, etc. who gets paid to serve an oil field employee, then this field will "provide" (quotes denote sarcasm) lots of jobs. You have to count jobs as a part of the hourly rate that each oil field worker will contribute to that grocery bagger. In reality, most of the really good jobs are sewn up by the companies already up in Prudhoe. Plus the unions. They still have guys on lay-offs from four years ago that are itching to get back up there. Actually, most of our guys (BP) would be coming over from Aberdeen (Scotland) and Perth (Australia). But yeah, there will be some new jobs, but nothing even close to what AP (Arctic Power) wants you to think. And definitely not nearly as many as Prudhoe. Not even close." There are still more quotes, but I am really running out of time. Looking forward to your response.

Don Singleton said...

As far as the governor and legislature are concerned: The best government money can buy is not just a saying up here. To play ball in the political arena, one must have money.

Alaska is not the only place where that is true. It may be that more of that is Oil money than from other sources, but it is true everywhere.

It is an uphill battle that sees some progress, but with the advent of ANWR and its possible wealth, an undercurrent has grown geared toward putting that wealth into the hands of a few rather than benefitting a majority of Alaskans and, by extention, you folks in the lower 48.

So what you are saying is that unlike many of the other anti ANWR, you think it will be a success, and there will be a lot of money but that it will go to the wrong hands. Surely the way to fix that is not to kill ANWR, but to fix the corruption. Surely it can't be as bad as Louisiana.

Jobs are great, but when you see the disparity between the average wage and the top guys' salaries, it raises some questions.

My father used to work for Brown and Root, and he said that a North Slope crane driver made more money than the B&R Vice President, who was at least 10 levels above him in the B&R Organization Chart.

Earmarks. As you know, the earmarks were removed from the "bridges to nowhere." Despite that removal, Governor Mrukowski placed the maximum allowable amount of that money ($90+ million) back into the bridges.

That does not make any sense. The appropriations chairman that got the money earmarked is term-limited out of his chairmanship, and the number of people affected is so small, and I would assume therefore their political clout so small, that I am surprised the money was not spent elsewhere. Perhaps spent foolishly, but I am surprised the bridge to nowhere will be built.

As far as the rest of it goes, quite a bit has been put towards projects like the 40 million dollar road to nowhere through one of the most avalanche-prone areas in the entire United States. Ooops, I maen the raod to the newly proposed gold mine west of Juneau that wouldn't even have been considered had the mining company been required to pay for said raod. The rest of the cash? Going toward road maintenance for roads originally paid for by your federal taxes, road improvements on those same roads, and various other projects.

So oil is not the only resource getting the bucks. How many people can now get jobs at the gold mine that otherwise could not have gotten there.

If the state asks for too much, the companies will lease, but won't drill. Effectively locking up ANWR until it is most favorable for them.

Write the lease agreement to require production or the lease goes back to the state.

And besides, the oil companies are in business to make money, not accomodate you, the state, the government, or anyone else for that matter,

They call that Capitalism

so until the folks in this world decide that it really is in their best interest to decrease dependence and eventually start using oil much more efficiently, this will be the situation.

I am happy with decisions being made by the market place, rather than government deciding what they think is best for people.

Of course Prudhoe Bay is producing more than when it was first drilled. There are more wells, rigs and infrastructure. The projections for Prudhoe (according to my engineer friend who actually worked on the original wells and for 20+ years on the North Slope) were that it would produce at near peak volume through 2012 (rosiest estimates). In 1988, the decline began and the scramble began to find new untapped field.

That is still lasting a lot longer than was projected when production first began. Stripper wells might still be able to get production past 2012.

As far as domestic sources of oil are concerned, until the US collectively decides to cut its consumption by about 80-95% (forgive me, this is an estimate from a not so reliable source), domestic oil cannot ever fuel our need all by itself.

I suspect that number is not reliable, but we don't have to provide all our needs, just cut back on the increasing need for foreign sources, and provide more domestically.

Besides, oil is finite. It will run out eventually. What will we do when it goes away or becomes too expensive? Technology? Maybe. Coal? Likely. I really don't know. This is a question that really deserves quite a bit more time than I currently have.

Clean coal technology is certainly an option. I would like to see more electricity generated by nuclear plants, and more cars to use electricity generated by nuclear plants (does not make sense to have electric cars if oil, gas, or coal is used to generate the electricity

Guarding the pipeline.... Remember that a majority of the 700+ mile pipeline is in wilderness.

How about putting more of it underground. I know the ground is frozen in many places, so it would not be easy, and you might need pipes within pipes, with heated water between the pipes.

Wilderness Value. As I said before, beauty is subjective. Some find beauty in vast, untouched coastal plains, others find beauty in pipelines, airstrips, gravel mines, and drill rigs running across that coastal plain. I would encourage you to come to Alaska and see ANWR one of these days and decide for yourself.

The scenic parts of the reserve are not where they want to drill, and if you find desolation pretty, there will still be a LOT of that.

Environmental demands and refineries: If refining capacity is so valuable, why wouldn't companies invest in upgrades to comply with environmental demands? The remaining operational refineries seem to be operating under these demands.

We have enough refineries to produce as long as all are operational. There is a shortage for a month or two each year as they have to change and generate different blends, but people put up with the increased prices resulting from the shortage in supply.

But if a state wants to prevent that annual increase, and to cover for possible hurricanes in Gulf Coast it should build some refineries itself.


I recall a time when coal powered power plants were required to "scrub" their emissions, they cried bloody murder, but they were forced to do it.

Some did it, but most converted to burning natural gas or even oil.

New thought: After talking with some frinds in the oil industry, I came away with some new understanding and some new questions. One of the big ones was "Well, what does this guy (you, Don Singleton) see as the benefit of drilling in ANWR?

Find out for certain how much oil is really there, and improve our domestic/foreign supply figures.

When I asked if there was oil there he said: "Maybe, maybe not. There are good indications in some areas, but it's always a crap shoot to some degree. To find out, we've got to at least test drill."

Precisely.

I asked a frind who works in the financial department over at BP what she thought of the notion that ANWR would provide lots of jobs for Americans. Her response: "If you count every store clerk, lawnmower, carpenter, etc. who gets paid to serve an oil field employee, then this field will "provide" (quotes denote sarcasm) lots of jobs.

Also construction jobs to build them houses, etc. etc. etc.

They still have guys on lay-offs from four years ago that are itching to get back up there.

Whether a laid off worker or a newly trained person does the work, it is a job.

Actually, most of our guys (BP) would be coming over from Aberdeen (Scotland) and Perth (Australia).

Are those fields being shut down? Who will replace them?

Alaskan form. anon said...

Alaska is not the only place where that is true. It may be that more of that is Oil money than from other sources, but it is true everywhere.

Ah, Don, you are a master of the obvious. You also must realize that a majority of policy and laws in this country revolve around enriching those who are in power. Why give them more?

So what you are saying is that unlike many of the other anti ANWR, you think it will be a success, and there will be a lot of money but that it will go to the wrong hands. Surely the way to fix that is not to kill ANWR, but to fix the corruption. Surely it can't be as bad as Louisiana.

I think nothing of the sort. The whole point is that just the possibility of wealth has some really powerful and a lot of not-so-powerful people just waiting for the money to start flowing- mostly to them. I really don’t have any experience with Louisiana politics, so I cannot comment on the comparison. I do however know that the smell coming out of Juneau and DC is probably not gumbo. What’s so terribly ironic about this whole ANWR deal is that the amount of money spent on attorneys, PR firms, lobbying, and other costs have thus far amounted to tens of millions of dollars- at least enough to fund school upgrades throughout most of rural Alaska.

My father used to work for Brown and Root, and he said that a North Slope crane driver made more money than the B&R Vice President, who was at least 10 levels above him in the B&R Organization Chart.

Your father either terribly misled, or B&R vice-presidents were not terribly well paid. I actually happen to know some heavy equipment operators from the pipeline days (crane operators included) and let me assure you that the pay, while good and high for operators, was not exactly the lottery it has been made out to be. I would imagine that the numbers quoted to your father were either exaggerated or an errantly multiplied top-scale hourly rate. In an earlier post, I mentioned that most of the jobs on the North Slope were downgraded. Many jobs simply ended when the project was finished. In addition, many of the projects were, like most construction, done on a bid basis. Getting a crane and other equipment up to Prudhoe Bay takes a lot of money and the operator is only a small part of the overall bid. Perhaps your father was quoted the full bid price of the project. At any rate, please understand that a vast majority of pipeline and oil field jobs are short-term. Even if an operator made buckets of money from a six-month stint, there is really no assurance that there will be more work at the same pay. Or even any more work at all once the project or sub-project is over. By the same token, however, there were, and still are, some long-term positions that took some folks from college to retirement with great pay. These positions were never that easy to get and are now incredibly rare and very subject to corporate nepotism (it’s not what you know, it’s who you know). A good number of these guys with the “good” jobs got transferred when the decline hit. Some stuck around, got lower paying jobs and rode out the lean years, but most just left. More recently, most of my drilling engineer buddies actually make the same pay in a nice warm office in Anchorage as they would on the -40 North Slope. Trust me; the office guys are much happier than the “Slopers.” One last point about oil money: To rely so heavily on one thing is to become a slave to it.

That does not make any sense. The appropriations chairman that got the money earmarked is term-limited out of his chairmanship, and the number of people affected is so small, and I would assume therefore their political clout so small, that I am surprised the money was not spent elsewhere. Perhaps spent foolishly, but I am surprised the bridge to nowhere will be built.

Don Young was the chairman of the appropriations committee and managed to get huge cash for two Alaska bridges ($452 million). This money, by law (the earmark), could not be spent on anything else. Then came Katrina. After some posturing, Don Young conceded the earmarks- releasing the money for other projects around Alaska. Former senator, now Governor, Murkowski then took that money and placed $90 million dollars back into the bridges. $90 million is the maximum allowable by law to be put into any one project. Don Young is one of the most powerful congressmen in the house. He has been there for over 30 years and is mean, arrogant, and a tremendous bully. To go a bit further with this, $90 million, heck, $452 million would have only started the bridges. The latest cost of just one bridge is at least $640 million. Nobody wants to talk about who is going to pick up the rest of the tab but in true Alaska fashion, our good politicians will worry about that later.

So oil is not the only resource getting the bucks. How many people can now get jobs at the gold mine that otherwise could not have gotten there.

So you are willing to pay a portion of $40 million (through your federal taxes) for 30-46 Joe Alaskans to be able to drive through some of the most treacherous, avalanche prone, hard to maintain road to their job? How very generous of you. Next you’ll be lobbying for money to build a $650 million bridge to nowhere. Again, Don, you’ve missed the point. The mine is purely a product of political favor. The mine could not even begin to support itself without a massive boost from government

Write the lease agreement to require production or the lease goes back to the state.

Been there, tried that. In court right now about gas wells. Please read this carefully. If the deal is not favorable to the oil company, they walk away and nobody gets anything.

They call that Capitalism

Again Don, you are a master of the obvious.


I am happy with decisions being made by the market place, rather than government deciding what they think is best for people.

So I can count on you to call for the end to all tax breaks, subsidies, and favorable legislation for any and all businesses in the US? After that miracle takes place, can I also count on you to make up the difference at the pump?

That is still lasting a lot longer than was projected when production first began. Stripper wells might still be able to get production past 2012.

Wrong. Prudhoe Bay was supposed to produce close to its maximum output until 2012 and then begin its decline. Instead, 1988 turned out to be the start of its declination. Stripper wells? Pal, this is Alaska. If it doesn’t produce enough to fill the pipeline, it is just too expensive, too hard, or just a waste of time to mess with that. Just kidding Don. But seriously, the arctic is not the easiest of places to put in a bunch of low output pumps, pipes, and enclosures. Actually, huge advances have been made in cold-weather drilling and extraction technology up on the North Slope but it is still pretty hard to be cost effective with a low-output field. Still trying though. Maybe when oil is hovering around $100 or so per barrel, the strippers will become more feasible. I honestly don’t know.

I suspect that number is not reliable, but we don't have to provide all our needs, just cut back on the increasing need for foreign sources, and provide more domestically.

Even if America tapped every reserve available, ANWR included, we would still be dependent on foreign oil to maintain our current consumption. And, the oil is FINITE. Finite means that it will be gone at some point. For the sake of this conversation, let’s say that more oil is provided domestically via ANWR, the Gulf, and other reserves. Okay, our foreign purchases are now smaller, but by how much? Let’s assume a 10% decrease in imports (this demands a 16.5% increase in current domestic production) as well as a static consumption of 21 million barrels per day. So, in our hypothetical world, the US is importing and consuming 11.7 million barrels per day rather than 13 million b/d and producing and consuming 9.3 million b/d rather than 8 million b/d. Now then, based on the 22 billion barrel estimate of proven and projected reserves in the US, we can figure out that US oil reserves will last for a whopping 6.48 years (9.3 million x 365=3.395 billion b/y. 22 billion / 3.395 billion=6.48 years). All of the raw figures come from Gibson Consulting. This whole scenario doesn’t take into account the literally hundreds of factors like export contracts, strategic reserve requirements, military needs overseas, etc. that lessen available domestic production.

Clean coal technology is certainly an option. I would like to see more electricity generated by nuclear plants, and more cars to use electricity generated by nuclear plants (does not make sense to have electric cars if oil, gas, or coal is used to generate the electricity

Ah nuclear power. If it weren’t for the radioactive waste and meltdown danger, I’d jump on that bandwagon. Until those minor inconveniences are eliminated completely, I think that I’ll throw my support behind less toxic solutions.


How about putting more of it underground. I know the ground is frozen in many places, so it would not be easy, and you might need pipes within pipes, with heated water between the pipes.
Some of it is underground.

By necessity, most of it has to be above ground. I must admit that I laughed out loud when I read this comment, but then I realized that you probably don’t know much about the AK pipeline. Google it. It really is an amazing feat of engineering. When you learn more about it, you will see that “putting it underground” is about as easy as putting an elephant inside a VW beetle.

The scenic parts of the reserve are not where they want to drill, and if you find desolation pretty, there will still be a LOT of that.

Some would say that Oklahoma is desolate. I personally don’t terribly enjoy the scenery in that state, but hey, I'll bet that some folks actually enjoy looking out at that waving wheat. As I said before, come to Alaska. Look for yourself. I’ll even show you around. When you have actually seen and experienced the area that you so desperately want to develop, then I will give your opinions of desolation and beauty some credence. Until then, you simply do not know what you are talking about.

We have enough refineries to produce as long as all are operational. There is a shortage for a month or two each year as they have to change and generate different blends, but people put up with the increased prices resulting from the shortage in supply.

But if a state wants to prevent that annual increase, and to cover for possible hurricanes in Gulf Coast it should build some refineries itself.

Alaska has a refinery. Gas is still $2.30/gallon. Refineries still need oil regardless of where they are. It is not economically prudent to put a refinery far from the oil. It is also not prudent to put a refinery in a residential area. Just ask the good folks in Oakland.

Well Don, I am about out of time again. I must say that this little conversation has been an interesting time waster. Before I go, I must tell you that I had dinner tonight with some oil industry friends. They had some chuckles when I told them some of your comments and offered some pretty interesting responses. In a nutshell: The oil companies haven’t been actively pursuing ANWR for several years. There are better, easier, more profitable fields other places in the world. His company, like so many others is a multi-national conglomerate. Stevens, Murkowski, and Young got it in their heads years ago that ANWR was the holy grail and have been fighting for it ever since. According to my friend (very high up, actual decision maker), the real winners in this little game are the lobbyists, PR guys, and other vultures along for the ride. His company is actually a lot more interested in the 30 million acres to the west of Prudhoe Bay. This is an area known as the National Petroleum Reserve. It was set aside years ago solely for oil/gas development and exploration. No wilderness restrictions, few off-limits areas, and very few obstacles to drilling. My friend was even very frank about the reason ANWR is there in the first place. A deal was made. Oil got the NPR to the west and to the east ANWR was set aside for preservation. He even went so far as to say that he personally was opposed to drilling in ANWR for this very reason. A few quotes: “Imagine drilling in Yellowstone. Should not ever happen. Ever.” “ANWR simply cannot be the answer to America’s problem, no matter how good they make it sound.” and finally: “Tell the blogger (that’s you, Don) that he needs to learn a lot more about ANWR, Alaska, and oil, quit staring at that computer, and get out once in a while. Pass the salad please.” Couldn’t have said it better myself. This will probably be my last comment. Let me say that this little conversation has been interesting and I appreciate the time you have put into it. Best of luck.

Don Singleton said...

Alaska is not the only place where that is true. It may be that more of that is Oil money than from other sources, but it is true everywhere.

Ah, Don, you are a master of the obvious. You also must realize that a majority of policy and laws in this country revolve around enriching those who are in power. Why give them more?

That does not make a lot of sense. You said that the Alaskan politicians were in the pocket of the Oil industry (and so you suggest blocking more oil revenue). But you also implied they were in the pocket of the gold mining industry. If you could prevent any more oil drilling, they are still going to find people willing to line their pockets for something else, whether it is gold, tourism, or something else.

So what you are saying is that unlike many of the other anti ANWR, you think it will be a success, and there will be a lot of money but that it will go to the wrong hands. Surely the way to fix that is not to kill ANWR, but to fix the corruption. Surely it can't be as bad as Louisiana.

I think nothing of the sort. The whole point is that just the possibility of wealth has some really powerful and a lot of not-so-powerful people just waiting for the money to start flowing- mostly to them. I really don’t have any experience with Louisiana politics, so I cannot comment on the comparison. I do however know that the smell coming out of Juneau and DC is probably not gumbo. What’s so terribly ironic about this whole ANWR deal is that the amount of money spent on attorneys, PR firms, lobbying, and other costs have thus far amounted to tens of millions of dollars- at least enough to fund school upgrades throughout most of rural Alaska.

One can always bemoan the money someone else spends, and wish they had spent it elsewhere, but it is their money.

However if there is drilling in ANWR, and the state gets a pot of money, at least there is a chance it can be persuaded to spend some of it on schools in rural Alaska.


My father used to work for Brown and Root, and he said that a North Slope crane driver made more money than the B&R Vice President, who was at least 10 levels above him in the B&R Organization Chart.

Your father either terribly misled, or B&R vice-presidents were not terribly well paid. I actually happen to know some heavy equipment operators from the pipeline days (crane operators included) and let me assure you that the pay, while good and high for operators, was not exactly the lottery it has been made out to be. I would imagine that the numbers quoted to your father were either exaggerated or an errantly multiplied top-scale hourly rate.

The pay of executives is printed in a company's Annual Report, and he was up there helping with something for a short time, and he knew the pay the crane operators made, and how much overtime they got (and what they were paid for it), plus the additional pay they got for working in that extreme climate. I believe what he told me was true.

In an earlier post, I mentioned that most of the jobs on the North Slope were downgraded. Many jobs simply ended when the project was finished.

Most jobs end when the project is finished. That is sort of implied in the word "finished."

In addition, many of the projects were, like most construction, done on a bid basis. Getting a crane and other equipment up to Prudhoe Bay takes a lot of money and the operator is only a small part of the overall bid. Perhaps your father was quoted the full bid price of the project.

No, he was talking about the money the crane operator was paid vs the money the VP was paid.

At any rate, please understand that a vast majority of pipeline and oil field jobs are short-term. Even if an operator made buckets of money from a six-month stint, there is really no assurance that there will be more work at the same pay. Or even any more work at all once the project or sub-project is over.

Which is why they move on to other projects, just as you said that the BP person told you they would probably move people to ANWR from two other BP projects that were shutting down.

By the same token, however, there were, and still are, some long-term positions that took some folks from college to retirement with great pay. These positions were never that easy to get and are now incredibly rare and very subject to corporate nepotism (it’s not what you know, it’s who you know). A good number of these guys with the “good” jobs got transferred when the decline hit. Some stuck around, got lower paying jobs and rode out the lean years, but most just left. More recently, most of my drilling engineer buddies actually make the same pay in a nice warm office in Anchorage as they would on the -40 North Slope. Trust me; the office guys are much happier than the “Slopers.” One last point about oil money: To rely so heavily on one thing is to become a slave to it.

I never said Alaska should not diversify. Just that they should drill ANWR.

That does not make any sense. The appropriations chairman that got the money earmarked is term-limited out of his chairmanship, and the number of people affected is so small, and I would assume therefore their political clout so small, that I am surprised the money was not spent elsewhere. Perhaps spent foolishly, but I am surprised the bridge to nowhere will be built.


Don Young was the chairman of the appropriations committee and managed to get huge cash for two Alaska bridges ($452 million). This money, by law (the earmark), could not be spent on anything else. Then came Katrina. After some posturing, Don Young conceded the earmarks- releasing the money for other projects around Alaska. Former senator, now Governor, Murkowski then took that money and placed $90 million dollars back into the bridges. $90 million is the maximum allowable by law to be put into any one project.

I am surprised he would waste the $90 million, since there are only 50 people (or is it 50 families) on the island.

Don Young is one of the most powerful congressmen in the house. He has been there for over 30 years and is mean, arrogant, and a tremendous bully. To go a bit further with this, $90 million, heck, $452 million would have only started the bridges. The latest cost of just one bridge is at least $640 million. Nobody wants to talk about who is going to pick up the rest of the tab but in true Alaska fashion, our good politicians will worry about that later.

Senator Stevens also helped when he was chairman of appropriations.

So oil is not the only resource getting the bucks. How many people can now get jobs at the gold mine that otherwise could not have gotten there.

So you are willing to pay a portion of $40 million (through your federal taxes) for 30-46 Joe Alaskans to be able to drive through some of the most treacherous, avalanche prone, hard to maintain road to their job? How very generous of you. Next you’ll be lobbying for money to build a $650 million bridge to nowhere. Again, Don, you’ve missed the point. The mine is purely a product of political favor. The mine could not even begin to support itself without a massive boost from government

Not at all. I believe that ALL Earmarks should be cancelled. I dont think I should pay for a road in Alaska, any more than you should pay for a road in Oklahoma.

Write the lease agreement to require production or the lease goes back to the state.


Been there, tried that. In court right now about gas wells. Please read this carefully. If the deal is not favorable to the oil company, they walk away and nobody gets anything.

Which should make you happy, since you dont seem to want oil production because of the money going to a few. But I have news for you. If there was no oil production, there would be money from something, and it would go to the ones in power.

.... I am happy with decisions being made by the market place, rather than government deciding what they think is best for people.


So I can count on you to call for the end to all tax breaks, subsidies, and favorable legislation for any and all businesses in the US?

No. I think that tax breaks to encourage investment and R&D are appropriate. I dont like sugsidies, and some favorable legislation is appropriate, and some is not.

After that miracle takes place, can I also count on you to make up the difference at the pump?

I am disabled, with no real income other than disability payments. You can't count on me for any financial support.

Ah nuclear power. If it weren’t for the radioactive waste and meltdown danger, I’d jump on that bandwagon. Until those minor inconveniences are eliminated completely, I think that I’ll throw my support behind less toxic solutions.

Feel free. Put up windmills and spoil Ted Kennedy's view. I still prefer nuclear power.

By necessity, most of it has to be above ground. I must admit that I laughed out loud when I read this comment, but then I realized that you probably don’t know much about the AK pipeline. Google it. It really is an amazing feat of engineering. When you learn more about it, you will see that “putting it underground” is about as easy as putting an elephant inside a VW beetle.

The main problem, as I indicated in my previous post, is the frozen tundra, but the fact that they took the easy way out and out it above ground does not mean it could not have been put underground.

Some would say that Oklahoma is desolate. I personally don’t terribly enjoy the scenery in that state, but hey, I'll bet that some folks actually enjoy looking out at that waving wheat. As I said before, come to Alaska.

Actually there is more waving wheat in Kansas, Nebraska, etc. A lot of Oklahoma is desolate. Not as much as West Texas, but still desolate.

Refineries still need oil regardless of where they are. It is not economically prudent to put a refinery far from the oil.

How about anywhere along the oil pipeline.

It is also not prudent to put a refinery in a residential area. Just ask the good folks in Oakland.

No one likes a refinery near where they live. I used to live in Pasadena Texas, and I know the smell. But if you want gas for your car...

Well Don, I am about out of time again. I must say that this little conversation has been an interesting time waster. Before I go, I must tell you that I had dinner tonight with some oil industry friends. They had some chuckles when I told them some of your comments and offered some pretty interesting responses. In a nutshell: The oil companies haven’t been actively pursuing ANWR for several years. There are better, easier, more profitable fields other places in the world. His company, like so many others is a multi-national conglomerate. Stevens, Murkowski, and Young got it in their heads years ago that ANWR was the holy grail and have been fighting for it ever since. According to my friend (very high up, actual decision maker), the real winners in this little game are the lobbyists, PR guys, and other vultures along for the ride. His company is actually a lot more interested in the 30 million acres to the west of Prudhoe Bay. This is an area known as the National Petroleum Reserve. It was set aside years ago solely for oil/gas development and exploration. No wilderness restrictions, few off-limits areas, and very few obstacles to drilling. My friend was even very frank about the reason ANWR is there in the first place. A deal was made. Oil got the NPR to the west and to the east ANWR was set aside for preservation. He even went so far as to say that he personally was opposed to drilling in ANWR for this very reason. A few quotes: “Imagine drilling in Yellowstone. Should not ever happen. Ever.”

The very small part of ANWR proposed for drilling does not look anything like Yellowstone.

“ANWR simply cannot be the answer to America’s problem, no matter how good they make it sound.” and finally: “Tell the blogger (that’s you, Don) that he needs to learn a lot more about ANWR, Alaska, and oil, quit staring at that computer, and get out once in a while. Pass the salad please.” Couldn’t have said it better myself. This will probably be my last comment. Let me say that this little conversation has been interesting and I appreciate the time you have put into it. Best of luck.

Have a very Merry Christmas and a Happy New Year.

hvwatson said...

If only our oil was nationalized, perhaps this would be a great idea. Right now, the United States owns oil in Alaska. After the oil companies go in and drill, WE will no longer own oil in Alaska - the oil companies will own oil in Alaska. Then they can sell it back to us for a huge profit. Why should we whore out our natural resources? If you want to drill, fine. But right now, that oil belongs to the American citizens. Let's keep it that way.

Don Singleton said...

Oil in the ground is worthless, and because we can't buy it, we have to import it from halfway around the world from people that don't like us.

I would rather buy it from an American oil company that has to lease the land from the government