Thursday, March 18, 2004
By H. Josef Hebert, Associated Press

WASHINGTON — America's dependence on oil imports will continue to grow even if the government were to allow oil drilling in an Alaska wildlife refuge, according to an Energy Department analysis.

The report released Tuesday by the Energy Information Administration also said that while domestic production would be higher, the impact on oil prices would be negligible — perhaps 30 cents to 50 cents a barrel if prices were in the $27 a barrel range.

The price of light sweet crude was $37.48 a barrel on Tuesday on the New York Mercantile Exchange.

Developing the coastal plain of the Arctic National Wildlife Refuge in Alaska has been a centerpiece of President Bush's energy agenda. The House approved such drilling, but the Senate has refused to go along because of strong opposition from environmentalists.

Opponents of drilling argue the refuge's coastal plain where the oil is located should remain pristine to protect calving caribou, polar bears, musk oxen, and millions of migratory birds who use it during parts of the year. Pro-drilling advocates argue the oil — 10.4 billion barrels, according to some estimates — can be developed while protecting the environment.

The EIA report released Tuesday was expected to provide fodder for both sides.

It said that if Congress gave the go-ahead to pump oil from the refuge the crude could begin flowing by 2013 and reach a peak of 876,000 barrels a day by 2025, stemming the decline in domestic production. It would mean domestic production would be 20 percent greater than what it would be without the refuge's oil, and slightly higher than today.

But even at peak production, the United States would still have to import two-thirds of its oil because of growing demand, said the EIA analysis, as opposed to an expected 70 percent if the refuge's oil remains off the market. Increased demand would outpace the additional domestic production.

Currently the United States imports about 56 percent of the oil it consumes.

Congress has grappled for years over whether to allow oil companies access to the Alaska refuge's 1.5 million acre coastal plain.

Rep. Richard Pombo, R-Calif., chairman of the House Resources Committee, seized on the EIA finding that ANWR development would boost domestic oil production by 20 percent over what it otherwise would be in 2025.

"Given America's energy crunch, ANWR production is a must," said Pombo, who requested the EIA analysis.

But environmentalists said the report only debunks the arguments pushed by the drilling advocates that the refuge is important for national security and economic independence.

"It underscores what we've been saying all along: that oil drilling in the refuge would do next to nothing to actually meet America's energy needs.... We're still going to be reliant, if not more reliant, on foreign sources of oil," said Justin Tatham of the U.S. Public Interest Research Group, an environmental organization active in protecting the refuge from development.

U.S. domestic oil production will increase over the next four years from the current 5.7 million barrels a day to 6.1 million barrels a day, according to the EIA report, largely because of additional oil coming from the Gulf of Mexico.

But after that, domestic production declines steadily without access to ANWR and is expected to fall to 4.6 million barrels a day by 2025. With demand increasing, imports will jump from the current 9.7 million barrels a day to nearly 16 million barrels a day, or 70 percent of what is consumed.

Source: Associated Press