How Much Is Under The Tundra?

By Adam Zagorin

Is there enough oil beneath the Arctic National Wildlife Refuge to help secure America's energy future? President Bush certainly thinks so. He has argued that tapping ANWR's oil would help ease California's electricity crisis and provide a major boost to the country's energy independence. But no one knows for sure how much crude lies buried beneath the tundra, with the last government survey, conducted in 1998, projecting output anywhere from 3 billion to 16 billion bbl.

The oil industry goes with the high end of the range, which could equal as much as 10% of U.S. consumption for as long as six years. ANWR would ease America's more than $100 billion annual foreign-oil bill, the argument goes. And by pumping more than 1 million bbl. a day from the reserve for the next two to three decades, lobbyists claim, the nation could cut back on imports equivalent to all shipments to the U.S. from Saudi Arabia, the world's largest producer. Sounds good. An oil boom would also mean a multibillion-dollar windfall in tax revenues, royalties and leasing fees for Alaska and the Federal Government. Best of all, proponents of drilling say, damage to the environment would be minimal. "We've never had a documented case of an oil rig chasing caribou out onto the pack ice," says Alaska State Representative Scott Ogan.

Not so fast, say environmentalists. Sticking to the low end of government estimates, the National Resources Defense Council says there may be no more than 3.2 billion bbl. of economically recoverable oil in the coastal plain of ANWR, a drop in the bucket that would do virtually nothing to ease America's energy problems. The NRDC further claims that ANWR's total output would amount to no more than a six-month supply of oil for the U.S.--far too little to have a long-term impact on prices. And consumers could wait up to a decade to reap any benefits, because drilling could begin only after much wrangling over leases, environmental permits and regulatory review. As for ANWR's impact on the California power crisis, environmentalists point out that oil is responsible for only 1% of the Golden State's electricity output--and just 3% of the nation's.

Americans make up 5% of the world's population but gobble up 25% of global energy. So cutting back on domestic oil consumption offers far greater potential savings than drilling in ANWR. An obvious step: boosting the fuel efficiency of America's truck and auto fleet. The NRDC claims that more than three times the amount of ANWR's petroleum could be saved if American fuel economy was raised to an average of 39 m.p.g. from current levels of 20.7 m.p.g. Efficiencies generated by a simple upgrade of the replacement tires installed on U.S. vehicles could save nearly 5.5 billion bbl. of oil over the next 50 years, the greens say.

None of these arguments carry much weight among the oilmen. Phillips Petroleum, BP Amoco and ExxonMobil all hope to profit from ANWR leases. So do Halliburton--the oil-field services giant headed until recently by Vice President Dick Cheney--and Enron, a large energy marketer run by Bush buddy Kenneth Lay. For them, it seems, the only good oil field is a tapped oil field.

--By Adam Zagorin