About ANWR And Gas Prices

There has been pressure for years to open up the Arctic National Wildlife Reserve (ANWR) to oil exploration, based on the belief that there is huge supply of oil there that could lower gas prices for American drivers.

I've been trying to find one good, readable summary of the situation, so let's check the facts in this one.

The conclusions are that potential benefits are years, decades away, for what would be most likely minimal savings for consumers.

"But even in the best case, the price impact — decades from now — would amount to about 1 percent of current market prices. If work started today, production would peak in 2027 — when increased production would have the biggest impact on prices. According to Department of Energy projections, that impact would cut the prices of light sweet crude (in 2006 dollars) by 41 cents per barrel in 2026 for the low estimate, 75 cents per barrel in 2025 for the mean oil resource case, and $1.44 per barrel in 2027 for the high estimate."

Setting aside the environmental issues, which are important to enough Members of Congress that oil exploration and drilling in the ANWR has been blocked by both parties, the author of the piece cited above concludes that conservation now is a workable, available alternative.

That's because we as consumers help set the price. If we use more, the price goes up, and we use less, we help force the price down.

What I find most interesting is that $4-a-gallon gasoline has begun to push individuals towards personal conservation, which is reducing driving and demand for gasoline.

If and when transit improvements become a national priority, and industry begins to supply better gas/electric hybrid vehicles and alternative fuel vehicles, the demand for gasoline in the US should continue to fall.

However, the growth of the automobile industries in both China and India are big problems, and it would make little sense to drill in ANWR or off the coasts of Florida and California just to supply burgeoning car ownership in these two fast-growing countries.