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Opening ANWR cuts gas prices TWO cents in 2025

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"Opening ANWR cuts gas prices TWO cents in 2025"

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In the climate and energy debate, conservatives continue to argue that the only solution to high gasoline prices is drill, drill, drill, especially in the Arctic National Wildlife Refuge (see Eco-Gingrich says, “Drill Here. Drill Now. Pay More”). This argument is false, false, false.

The Administration’s own Energy Information Administration found differently in a 2004 Congressionally-requested “Analysis of Oil and Gas Production in ANWR” (see “Note to Bush, media: Opening ANWR cuts gas prices one penny in 2025“). I pointed out then that the 2004 analysis was based on low oil prices, and that higher oil prices would raise the savings.

A May 2008 re-analysis by EIA, “Analysis of Crude Oil Production in the Arctic National Wildlife Refuge,” in fact found

In the mean ANWR oil resource case, additional oil production resulting from the opening of ANWR reaches 780,000 barrels per day in 2027…

The opening of ANWR is projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, light crude oil prices of … $0.75 per barrel in 2025 for the mean oil resource case,

There are 42 gallons in a barrel, so that’ll be about two cents a gallon. I’ve said it before and I’ll say it again — don’t spend it all in one place, America.

Now, in “fairness” to the EIA, they have gone from a 2004 prediction that world oil price in 2025 of $27 per barrel (2002 dollars) to a May 2008 prediction that oil in 2030 will be a mere $70 a barrel (in 2006 dollars).

[Note to self: Find out what EIA forecasters are smoking and stay far away from it.]
This mainly proves the EIA is really lousy at energy forecasting (see “Peak Oil? Bring it on!“).

Let me propose a rule of thumb based on the EIA analyses — ANWR will cut future gasoline prices about 1%. You can pick your own gasoline price in 2030 and do the math.

If we want to avoid gasoline prices, $6 or $7 a gallon and then much more, we need to get off of oil as our primary transportation fuel ASAP. That, of course, is a primary goal of climate legislation.

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6 Responses to Opening ANWR cuts gas prices TWO cents in 2025

  1. David B. Benson says:

    Joe, is that your $0.02 worth? :-)

  2. Andy Bauer says:

    Ba-Dum-Bump!

  3. Tom G says:

    Don’t know if you missed it not, but the Canadian Government just closed the bids on oil exploration in a section of the Beaufort Sea.
    Considering the frozen methane on the shallow Arctic sea floors…is this wise??

  4. Dennis says:

    George Will wrote in today’s (thursday) Washington Post that Chuck Schumer said the price at the pump would fall 50 cents per gallon if Saudi Arabia pumped an additional 1 million gallons a day. Will of course jumps on that comments to claim that ANWR would reduce the pump price by that amount. I don’t know where Schumer gets his number, but perhaps someone here knows …

  5. Chaz says:

    **Crude oil prices are about 2 times where they were just 1 year ago.

    **Now, what about the causes? Honestly, can you agree to ANY of the following:
    –Are there 2x as many cars out there?
    –How about gas mileage? Did it decrease by 50% over that time?
    –Are there only 1/2 of the countries in OPEC producing oil now versus 2007?
    –Did 1/2 of the oil fields dry up?
    –Are there 1/2 less oil tankers to move oil?
    –Did 1 out of every 2 oil pipelines close down, break, or be destroyed?
    –Are 2 times more homes heated by oil now?
    –Are there now twice as many companies in the world, producing 2x more G.N.P. for their homeland economies and consuming 2x more oil?

    THE ANSWER TO ALL OF THESE IS AN EMPHATIC “NO!”

    You know it.

    I know it.

    The world knows it.

    Let’s fix the problem by using the same belief system that created it:

    VISIT http://abundant-oil.blogspot.com/

    Here, you will receive:
    1)A more complete explanation of the idea
    2)Thoughts behind the technique of visualization
    3)Action steps to take
    4)News and Video on the Oil and Gas industry.

    Believe. Help yourself. Help the economy. Help your world.

  6. John Mashey says:

    ANWR should be opened … but only after suitable delay, so that current people’s grandchildren might have a little oil. Think of it as a piggy bank – every 10 years, starting in 2020, Congress can vote on it, but if they vote yes, there’s a10-year delay before anything even starts, so there’s a 15+-year delay before oil flows, to take it out of the realm of day-to-day political combat.

    In any case, they might as well wait until the permafrost has melted – right now seems a really dumb time to build anything up there.