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So far, ANWR has been a bust

After spending literally decades trying to get access to Alaskan wilderness areas, it turns out that oil companies don't really want it after all. This is from the Anchorage Daily News on Thursday:

Another oil company backs out of leases in Alaska’s Arctic National Wildlife Refuge

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The only oil company that bought a single lease in the Arctic National Wildlife Refuge early last year has canceled its lease, according to the U.S. Interior Department.

The move by Regenerate Alaska is the latest example of the industry stepping away from possible oil and gas development in the 19-million-acre refuge. Hilcorp and Chevron have also canceled their interest in separate, older leases, on a small tract of Alaska Native corporation-owned land within the refuge’s boundaries.

Regenerate Alaska was the only company to bid on ANWR leases in the waning days of the Trump administration. None of the majors showed any interest, and now, even the companies that already have leases are getting out. This is partly because the Biden administration hasn't been friendly toward ANWR leasing, but it's also because ANWR was never a huge pot of gold in the first place.

This has long been my main gripe about ANWR: Both sides have invested way more into the fight than they can justify. On the one hand, ANWR doesn't really have all that much oil,¹ and it's expensive to get out. On the other hand, a pipeline wouldn't do all that much damage to the caribou.² I'd just as soon not drill in ANWR, partly because we need to stop opening new oil fields regardless, but it's just not a big deal either way.

¹EIA estimates that over the period 2031-2050, ANWR would increase US production about 4% and world production by about 0.2%.

²You'll have to check this out for yourself. There are hundreds of assessments, almost all of them coming from organizations with an axe to grind, and my meta-sense is that taken together they suggest only moderate effects. But reasonable people can differ about this.

17 thoughts on “So far, ANWR has been a bust

  1. Salamander

    ANWR was always just a way to stick it to the Libz. And they did. The fact that no further drilling will take place is irrelevant ... except to the environment, particularly the immediate environment of the Refuge itself.

    Theoretically, both sides could claim a "win."

  2. Pingback: But the leases… | ok-cleek

  3. robaweiler

    One thing I saw in connection to another arctic oil field is that the pipeline to get the oil out was going to require refrigeration units at the pylon bases as during the summer the permafrost is no longer frosted enough to support the weight. You would think that this kind of thing would give the "Drill baby drill" crowd pause for a moment, but of course it doesn't.

  4. MrPug

    And cue the Republicans to blame Biden for no one drilling in ANWR which is the main reason gas prices are so high.

    1. Spadesofgrey

      Won't work. Traders set prices. Not surprisingly, they ignore actual supply and demand. US dirty oil doesn't make for cheap gas.

  5. MontyTheClipArtMongoose

    The long shadow of history's greatest monster, James Earl Carter, Jr., continues to rain torment on the financial wellbeing of the Working Class.

  6. D_Ohrk_E1

    In general, it probably has more to do with the break-even point. Arctic oil is roughly $75+/barrel whereas shale oil is closer to $50. Even with oil prices floating around $100, the assumption is that this is temporary and OPEC could simply increases production (as they have spare capacity) to force those Arctic facilities to shut down.

    But I think the point of it all is to show that it was Big Oil that chose to leave ANWR rather than Biden Administration blocking ANWR.

    1. spatrick

      And it also shows their not serious. The U.S. is still one of the largest oil exporters the world. Oil output has been rising ever since March 2020. It's just not enough to meet with pent up demand (after witnessing traffic on the roads yesterday, people are still driving places. High gas prices can't be that bad). And then they don't drill on the leases they do own and can explore with government approval. Why would they and bring prices down? They're making a killing after hemorraging profits and debt for years with fracking production from 2008-2020 and they're not going to threaten that. That's why the Biden Administration is going, hat in hand apparently to the Saudis, because they are only ones who can ramp up oil production in such volume quickly enough to affect global market prices. It's the only choice they have if they really want to get gas prices down. Of course, the Saudis are going to have demands first before doing so. Bottom line is the prices are as much about Saudi determination to show they have to be paid attention to, especially with sanctions on Russian oil.

  7. illilillili

    > Both sides have invested way more into the fight than they can justify

    No. You can justify a lot of expense to set a precedent that there is some line we can draw somewhere. If we can't draw a line at highly sensitive wilderness areas that provide very little profit, we're fucked.

  8. Anandakos

    I have driven the Dalton Highway to past the Brooks Range twice and will testify that the pipeline has underpasses for caribou every couple of miles. They placed them where there there was clear evidence of migration routes if there was any. So the caribou are not terribly inconvenienced. In fact, they wander around the Prudhoe Bay installation during the winter regularly.

    The pipeline was designed with "radiators" on all the supports, but it was built by an oil company, so of course they didn't believe that Global Warming was a thing.....

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