New USGS Oil Study Revives Old Arctic Temptations

New U.S. Geological Survey Oil Study Revives Old Temptations

In a just released study, the U.S. Geological Survey (USGS) announced that the Arctic may hold 90 billion barrels of oil, more than the known reserves of Nigeria, Kazakhstan and Mexico combined, and enough to supply current U.S. demand for 12 years.

One third of the potential deposits lie beneath Alaskan territory, which is good news for the U.S. given the recent flare up over Arctic land claims among the U.S., Canada, Norway, Denmark, and Russia. Moscow sparked a race to lay claim to the Arctic and its resources last year when a state-supported exploration team descended to the seabed and planted a Russian flag directly on the North Pole.

The USGS study comes at a time when President Bush and many lawmakers are urging Congress to rescind the ban against offshore drilling. Its findings lend credence to claims by supporters of lifting the ban that new drilling could bring significant quantities of oil to the market. Furthermore, the study only included reserves that could be tapped using existing techniques. Experimental or unconventional procedures, such as oil shale, weren't included in the assessment.

Critics counter by pointing to the fact that the study didn't include an estimate for how long it will take to bring the oil to the market. Offshore fields in the Gulf of Mexico and West Africa typically take 10-15 years of development before they start pumping oil. That is a long time to wait, even if it is assumed that extreme Arctic conditions won't cause further delays. Additionally, critics contend that the environmental cost of drilling far outweighs its benefits in oil.

However, the biggest problem with drilling for more oil as a solution to the recent spike in prices is that the current period of expensive petroleum should be looked upon as more of an opportunity to embrace than a crisis to avert.

High gas prices have driven the United States to emphasize efficiency and alternative sources of energy for the first time in over 30 years. If interest in these areas remains strong, the U.S. could implement an alternative to gasoline within the time span it would take for Arctic oil to reach the market.

The U.S. has been on a gasoline binge for the past 50 years. Right now we are sobering up and seeing the errors of our ways. Those who want us to drill in the Arctic as relief against high energy prices are trying to lure us back to old familiar ways. But what happens when oil in the Arctic dries up? We will have wasted a golden opportunity and countless years that could have been devoted to developing and prospering from a renewable energy source.

The U.S. already made this mistake in the 1980s when efforts towards efficiency and developing a renewable energy source were scuttled in light of record-low oil prices. We must learn from our past mistakes and resist having one more drink from the oil well.

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This analysis was prepared by COHA Research Associate Stephen Okin

August 5th, 2008

ENDS

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