Potential Oil Production from Coastal Plain of Arctic National Wildlife Refuge: Updated Assessment
May 1, 2000
Preface
Potential Oil Production from the Coastal Plain of the Arctic National Wildlife Refuge: Updated Assessment is a product of the Energy Information Administration’s (EIA) Reserves and Production Division. EIA, under various programs, has assessed foreign and domestic oil and gas resources, reserves, and production potential. As a policy-neutral agency, EIA’s standard analysis of the potential of the Alaska North Slope (ANS) has focused on the areas without exploration and development restrictions.
EIA received a letter (dated March 10, 2000) from Senator Frank H. Murkowski as Chairman of the Senate Committee on Energy and Natural Resources requesting an EIA Service Report “with plausible scenarios for ANWR supply development consistent with the most recent U.S. Geological Survey resource assessments.” This service report is prepared in response to the request of Senator Murkowski. It focuses on the ANWR coastal plain, a region currently restricted from exploration and development, and updates EIA’s 1987 ANWR assessment.
Recognizing the value of this study, readers should be aware of the limitations of the projections. There are many underlying forces of energy markets that cannot be known with certainty, such as the speed of technological development, the impact of variations in oil prices, changes in legislation, and impacts of the economy on supply and demand. The USGS resource estimates, on which the production estimates are based, have a sizeable range of uncertainty around them, of which readers should be aware. To allow timely completion of this study, simplifying assumptions were made which add to the uncertainty of the projections. For example, production schedules were postulated without specifying the effect of various levels of oil prices and technology advancements. Rapid technology growth can yield lower costs and faster development, with the reverse effect given slower technology growth. Oil price is a key factor in determining when production becomes economic.
General information about this publication may be obtained from John H. Wood, Director of the Reserves and Production Division, (214) 720- 6150. Specific information regarding the contents or preparation of this report may be obtained from Floyd Wiesepape, (214) 720- 6166, fax (214) 720-6155, or e-mail floyd.wiesepape@eia.doe.gov.
Executive Summary
This Service Report, Potential Oil Production from the Coastal Plain of the Arctic National Wildlife Refuge: Updated Assessment, was prepared for the U.S. Senate Committee on Energy and Natural Resources at the request of Chairman Frank H. Murkowski in a letter dated March 10, 2000. The request asked the Energy Information Administration (EIA) to develop plausible scenarios for Arctic National Wildlife Refuge (ANWR) supply development consistent with the most recent U.S. Geological Survey (USGS) resource assessments.
This report contains EIA projections of future daily production rates using recent USGS resource estimates. The Coastal Plain study area includes 1.5 million acres in the ANWR 1002 Area, 92,000 acres of Native Inupiat lands and State of Alaska offshore lands out to the 3-mile limit which are expected to be explored and developed if and when ANWR is developed. About 26 percent of the technically recoverable oil resources are in the Native and State lands.
The Coastal Plain region, which comprises approximately 8 percent of the 19 million-acre ANWR, is along the geologic trend that is productive in the Prudhoe Bay area, 60 miles west. This is the largest unexplored, potentially productive onshore basin in the United States. The 1002 area is now closed to exploration and development, although Native and State lands are open.
The USGS made the following estimates in 1998 of technically recoverable oil and natural gas liquids from the ANWR Coastal Plain:
- There is a 95 percent probability (a 19 in 20 chance) that at least 5.7 billion barrels of oil are recoverable.
- There is a 5 percent probability (a 1 in 20 chance) that at least 16 billion barrels of oil are recoverable.
- The mean (expected value) estimate is 10.3 billion barrels of recoverable oil.
By comparison, total 1998 U.S. proved reserves of crude oil were estimated to be 21 billion barrels and the 1993 estimate of undiscovered technically recoverable oil for the onshore lower 48 States (that would come from tens of thousands of small fields) was about 23 billion barrels.
EIA postulated yearly development rates of the resources without specifying the effect of various levels of oil prices and technology advances, and then projected daily production rates based on the USGS estimates, as follows:
- Low and high ANWR yearly development rates ranging from 250 to 800 million barrels per year are postulated for each of the three USGS estimates, forming 6 cases.
- Projected ANWR peak production rates range from 650,000 to 1.9 million barrels per day across the 6 cases.
- For the mean resource case (10.3 billion barrels technically recoverable), ANWR peak production rates range from 1.0 to 1.35 million barrels per day.
- Even with nearby production infrastructure, 7 to 12 years would be needed for lease sales, permitting and environmental reviews after approval for leasing. It is projected that initial ANWR production could occur around 2010 if leasing approval occurred within the next few years.
- The imported refiner acquisition cost in 2020 is projected in EIA’s Annual Energy Outlook 2000 reference case at $22.04 (1998 dollars). At this price, the potential ANWR oil recovered would have a value between $125 and $350 billion (in 1998 dollars.)