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Bush calls for more U.S. production President sees American oil and gas, including ANWR, as a way to meet growing demand and cure increasing prices at the pump Eric Lidji Petroleum News
A run of record oil and gasoline prices prompted President George Bush to renew calls for domestic drilling, especially in the 1002 area of the Arctic National Wildlife Refuge, during a press conference on April 29.
“One of the main reasons for high gas prices is that global oil production is not keeping up with growing demand,” Bush said, speaking to reporters at the Rose Garden.
The delivered price of Alaska North Slope crude oil closed at $113.71 per barrel on April 30, while regular unleaded gasoline hit $3.75 per gallon in Anchorage.
Bush estimated the oil under ANWR “could allow America to produce about a million additional barrels of oil every day” which he said “would likely mean lower gas prices.”
The 2,000-acre 1002 area is believed to contain between 4.3 billion and 11.8 billion barrels of recoverable oil, according to a 1998 evaluation by the U.S. Geological Survey, the most recent figures available to the public. Many geologists think that number is very low, but only drilling will tell for sure and, to date, only one well has been drilled in ANWR’s coastal plain. Results from it are confidential, but several state and industry geologists who have seen the results are strong proponents for opening the 1002 area to exploration.
Open ANWR to lower prices? From the perspective of increasing domestic supplies, opening the 1002 area to development would most likely not result in lower prices at the pump any time soon, because the oil resources at ANWR will take a decade or more to develop.
However, Bush said a public commitment to develop those and other U.S. resources would start to immediately ripple through the market.
“If Congress is truly interested in solving the problem, they can send the right signal by saying we’re going to explore for oil and gas in the U.S. territories, starting with ANWR,” Bush said.
Others in both government and industry carried that theme following Bush’s remarks. In a CNN interview on April 30, Shell Oil Co. President John Hofmeister said increased production is the answer to rising gasoline prices.
“If the U.S. set a goal to produce 2 to 3 million barrels more a day in this country, we would send a shock around the world that would immediately say to the speculators, ‘Hey, U.S. is serious,’” Hofmeister said.
Support from Alaska congressional delegation Currently two bills, one in the House and one in the Senate, would open ANWR’s 1002 area for oil and gas drilling, although neither is expected to pass. The Senate bill, co-sponsored by Sen. Lisa Murkowski, R-Alaska, would automatically open ANWR when oil prices hit $125 a barrel for a period of five consecutive days.
All three members of the Alaska congressional delegation and Gov. Sarah Palin praised Bush’s call to open ANWR as a way to lower prices.
“It is absurd that we are borrowing hundreds of billions of dollars from one foreign country to buy oil from another,” Palin said. “It is a threat to our national security and economic well-being. It is well past time for America to develop our own supplies.”
“The high cost of energy is simply unacceptable when we have the ability to produce more oil without any harm to the environment,” Murkowski said.
Sen. Ted Stevens, R-Alaska, said Bush’s message “was right on target” and said “with oil at $120 a barrel and gasoline at more than $5 a gallon in parts of Alaska, financially strapped families are demanding a new U.S. energy policy.”
Rep. Don Young, R-Alaska, said production from ANWR would be online today if President Bill Clinton had not vetoed a bill in 1995 to open the refuge.
Bush has pushed domestic drilling since taking office in 2001, but a majority in Congress that opposes opening ANWR because of environmental concerns has prevailed.
In a statement released after Bush spoke with reporters, Cindy Shogan, executive director of the Alaska Wilderness League, challenged the assumption that opening ANWR would shift world markets.
“These markets are not driven by signals — they will do what it takes to keep prices high as long as demand remains where it is. The only answer is to wean ourselves from our addiction to oil. … Drilling in the Arctic refuge will not lower prices; it will only contribute to more global warming and seal the polar bear’s fate.”
ANWR proponents have a limited amount of time to pass a bill opening the coastal plain to exploration and development, at least judging just by campaign promises; Sens. Hillary Clinton, John McCain and Barrack Obama all oppose opening the 1002 area.
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