May 16, 2002
12:00 AM
WASHINGTON, D.C. - Sen. Frank H. Murkowski, Ranking Member of the Senate Energy Committee, today welcomed updated estimates for the oil potential of the National Petroleum Reserve-Alaska, calling the new estimates heartening. Murkowski noted though, that the estimates from the U.S. Geological Survey confirm that more economic oil is likely to be found in the Arctic coastal plain, from a footprint 15 times smaller. “I certainly appreciate the work of the U.S.G.S. They confirm what we all knew, that NPRA may hold tremendous amounts of natural gas and significant amounts of oil. The report is certainly good news for the future of Alaska as a world-class energy provider. It means that with our neighbors in Canada, the region could become the future energy province that can replace some of the currently unstable sources of North American energy supplies. “But the report also proves that ANWR is a far better source of oil. Development in the coastal plain would be far more concentrated, likely improving the economics and certainly lessening the environmental impacts. The report builds the case for energy development in both ANWR and NPRA,” said Murkowski. The new report predicts that the 23.3-million acres of the NPRA contains between 6.7 and 15 billion barrels of technically recoverable oil -- the mean estimate being of 10.6 billion barrels available. That is similar to predictions from the 1.5 million acres of the coastal plain where 5.7 to 16 billion barrels are predicted to be technically recoverable. But given the huge area of NPRA -- 15 times larger than the coastal plain -- the oil is expected to be far less economic. The report predicts that just 620 barrels per acre will be found in NPRA, compared to 8,400 in ANWR, making the fields far less economic. For example, at $25 per barrel prices, the report predicts that only 3.7 billion barrels are recoverable from NPRA, compared to 5.8 billion from ANWR (based on the mean predictions). Only at $40 per barrel long-term prices could NPRA produce more oil than ANWR, according to the U.S.G.S. report. The report also estimates that NPRA contains between 39.1 and 83.2 trillion cubic feet of natural gas, with a mean value of 59.7 tcf -- a very large supply of natural gas. Murkowski said the report provides more ammunition for efforts in Congress to create incentives to build an Alaska natural gas pipeline system to bring NPRA and other North Slope gas to market. The Senator last month won a “safety net” in the Senate energy bill that would provide tax incentives to gas producers if the price of gas was to fall below what was needed to finance the $19.4 billion gas gas line. The tax break would be fully repaid to taxpayers from future higher gas prices. Murkowski noted the new report ignores environmental issues, where environmentalists already have pressed to close a large part of the Northeast corner of the petroleum reserve to oil exploration because of environmental concerns for waterfowl. He said he expects environmentalists might also press against leasing in other parts of the preserve that is home to the 450,000-member Western Arctic caribou herd, and the 25,000-member Teshekpuk caribou herd. And Murkowski noted any comparison of NPRA versus ANWR oil potential ignores that the U.S.G.S. estimates for ANWR may markedly underestimate oil potential there by assuming no production from the area at the Marsh Creek Anticline, which some geologists believe could produce another Prudhoe Bay-sized oil field. “Some will mistakenly say we don’t need oil from the coastal plain since NPRA, theoretically, is open for development. We need to press for additional oil and gas lease sales in NPRA and I support new efforts to open other parts of the reserve for exploration and leasing. “But what this report really shows is that given our 59 percent dependence on foreign oil that we should be pressing to open both the tiny area of ANWR and some of the far larger areas of NPRA to oil and gas development. Opening both would truly help reduce our dependence on foreign oil, guarantee America access to the 80+ tcf of natural gas in NPRA and the additional 29 tcf already proven at Prudhoe Bay. “These actions would protect our national security and promote our energy independence, as well as increase the likelihood of a natural gas pipeline project. This would also guarantee continued operation of the trans-Alaska oil pipeline and fuel jobs and revenue for the U.S. Treasury and Alaska for generations to come,” said Murkowski. ###