On PBS, WSJ 's Strassel exaggerated significance of potential ANWR oil production


Kimberly A. Strassel, a senior editorial page writer for The Wall Street Journal, falsely claimed that "most of the estimates" indicate that allowing oil production in Alaska's Arctic National Wildlife Refuge (ANWR) "could be really significant" and "could replace most of the oil we get from Saudi Arabia in 20 or 30 years." But a U.S. Department of Energy study, conducted by the Energy Information Administration (EIA) to assess the potential impact of oil production in ANWR, concludes otherwise: By 2025, the United States would import an estimated 66 percent of its oil if ANWR production were permitted, compared with an estimated 70 percent if production were not allowed.

Further, according to EIA estimates, the United States presently imports about 58 percent of the oil it consumes; in 2003, some 9 percent came from Saudi Arabia.* So even if Strassel had been correct that ANWR production could "replace most" U.S. oil imports from Saudi Arabia, this would still constitute only a small portion of total U.S. imports.

Finally, even if the United States decreased its oil imports through increased domestic production in places like ANWR, Persian Gulf states would still control oil prices, since oil markets are global and these states control most of the world's oil supply and decide on the quantity they pump on a given day. As conservative Washington Post columnist Robert J. Samuelson explained on October 6, 2004: "Even if we eliminated Persian Gulf imports, we'd still be vulnerable. Oil scarcities and prices are transmitted worldwide. The global economy -- on which we depend -- remains hugely in need of Persian Gulf oil." Indeed, EIA's 2004 analysis estimated that oil production in ANWR would reduce oil prices by a relatively insignificant 30 to 50 cents per barrel by 2025, "relative to a projected 2025 world oil price of $27 per barrel."

On the January 7 edition of PBS's Journal Editorial Report, host and Wall Street Journal editorial page editor Paul Gigot asked Strassel about the effect ANWR drilling could have on oil imports:

STRASSEL: When, you know, Republicans go to take up on an energy bill this year, the hope is that we will have some sort of thoughtful debate about supply in this country --

GIGOT: Particularly drilling in Alaska. How much of foreign imports would that displace, if any?

STRASSEL: Well, It could be really significant. People like to talk about our dependence on the Middle East. The reality is, if we got ANWR up and running, most of the estimates is -- are that it could replace most of the oil we get from Saudi Arabia in 20 or 30 years. That's not insignificant.

*Calculation: 1,774,000 barrels per day imported from Saudi Arabia (from this EIA chart) divided by 20,034,000 barrels per day consumed (from this EIA chart) equals approximately 8.9 percent.

Posted In
Environment & Science, Drilling
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