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In response to continued high gasoline prices, President Joe Biden recently announced an extension of withdrawals of about 1 million barrels per day from the Strategic Petroleum Reserve (SPR), the nation’s emergency oil stockpile. We could be getting at least that much oil from additional domestic drilling. Alaska’s Arctic National Wildlife Refuge (ANWR) alone has the potential to provide up to 1 million barrels a day, but drilling there has been blocked by the Biden administration since Inauguration Day. Here are five reasons why ANWR is a superior source of oil to the SPR.
1. ANWR would provide additional oil, not borrowed oil that must be paid back
The SPR contains previously produced oil purchased by the federal government and held in reserve for an emergency. Because of the Biden administration withdrawals over the last several months, the SPR is currently at 30-year lows and at some point will have to be refilled if it is ever to be available again. Indeed, energy markets recognize that the SPR must be paid back barrel for barrel, which is one reason why tapping it rarely reduces oil prices as much as hoped. In sharp contrast, ANWR would of course never have to be refilled and thus could provide a genuine addition to oil supplies. It is like the difference between an unemployed person taking out a bank loan to meet expenses or landing a new job.
2. ANWR would supply oil for decades rather than months
Withdrawals of 1 million barrels a day from the SPR can only go on for a matter of months before the reserve gets dangerously low – in fact we are already there. But, as demonstrated by the fact that drilling around Alaska’s Prudhoe Bay – the project most similar to ANWR – has surpassed 40 years of production, ANWR would very likely make a daily addition to domestic oil supplies for a long time. At its peak, ANWR is estimated to be able to supply a mean of 880,000 barrels per day and possibly more.
3. ANWR generates revenues while the SPR costs them
The SPR, like all federal programs, requires tax dollars to maintain and operate. In contrast to the SPR’s drain on government resources, the costs of developing ANWR would be undertaken entirely by the private sector. In addition, ANWR would generate leasing revenues, royalties, and income tax revenues that, by one estimate, could total $150 billion to $296 billion dollars for the federal government and state of Alaska.
4. Unlike the SPR, ANWR doesn’t strain existing infrastructure
One under-reported drawback to the SPR is that its storage facilities in Louisiana and Texas are located in the vicinity of an oil boom. As it is, the infrastructure needed to transport that region’s oil to refineries, refine it, and get the refined products out to customers is already at or near capacity, with occasional bottlenecks. To the extent we would have to make room in the system for SPR oil by dialing back domestic production, the entire purpose is defeated. In contrast, ANWR oil would be transported through the currently underutilized Trans-Alaska Pipeline and could then be shipped to any of a number of refineries that need it.
5. Locals support ANWR drilling, but not SPR withdrawals
In Alaska, drilling in ANWR enjoys considerable and bipartisan support, thanks to the above-mentioned revenues along with job creation projections well into the tens of thousands. And, judging by their elected leaders, most Louisianans and Texans similarly support local oil production and see the Biden administration withdrawals from the SPR as a poor substitute for real drilling.
To be sure, ANWR drilling cannot happen instantly. But the mere fact of so much future oil is on the way would have a beneficial effect on current prices.
Unfortunately, the reason Biden prefers borrowing oil rather than drilling is the climate change-inspired fantasy that we’ll only need fossil fuels for a little while longer before his “incredible transition” to clean energy takes hold. Tapping the SPR to reduce prices is a short-term fix that fits in with the administration’s wishful thinking, while ANWR and other domestic drilling is a sensible long-term response to the pain at the pump, not just for today but for years to come.
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