Murkowski encouraged by EIA study of ANWR’s 16 billion barrel oil potential

Petroleum News Alaska Staff

Alaska Sen. Frank Murkowski said May 24 he was encouraged by a report by the non-partisan Energy Information Administration, that concludes that if there are 16 billion barrels of oil in the Arctic coastal plain, that much of it is economically recoverable.

The report, requested by Murkowski, says the oil could last for 30 to 60 years and produce between $125 and $350 billion in value for America, if the oil is produced.

“This study shows that the total U.S. undiscovered technically recoverable oil for the onshore Lower 48 states from tens of thousands of likely small oil fields is about 23 billion barrels total. That’s all we have. The Arctic could yield more than 16 billion barrels of oil over its lifetime, yet this Administration has ignored that resource in favor of begging OPEC to send us more oil. It makes no sense,” said Murkowski.

He noted the EIA report, which is based on U.S. Geological Survey estimates of oil potential of the Arctic coastal plain, indicates there is a 95 percent probability of at least 5.7 billion barrels of oil being found; a 5 percent probability of at least 16 billion barrels of oil being there, with a mean value of 10.3 billion barrels.

The EIA projects peak production rates of from 600,000 to 1.9 million barrels of oil per day, with production estimated to occur for more than 30 years. The EIA says that based on the U.S.G.S. predictions, more than 80 percent of the technically recoverable oil will be commercially developable — economic — at an oil price of $25 per barrel. At a price of $28 a barrel, all of the plain’s technically recoverable oil is economic to produce.

At $22.04 a barrel, the agency’s estimate for long-term oil price, the potential oil to be recovered from the coastal plain would have a value of between $125 billion and $350 billion (in 1998 dollars). OPEC members set $22 as the floor price they hope to gain for their oil in the years ahead.

Murkowski noted that oil development on the coastal plain would involve just 2,000 acres of the 1.5-million-acre plain — one one-hundredth of a percent of the total area of the 19-million-acre Arctic National Wildlife Refuge.