Responding to a prompt by National Journal’s Amy Harder about the importance of Arctic energy, CEA President David Holt wrote the following, posted in the Journal’s Energy Experts Blog:
Arctic Energy Vital to Our Future
The Obama Administration must remain steadfast in its support for Arctic offshore energy exploration while continuing to enforce strict safety standards over drilling operations. Recent calls to end Arctic exploration are overly reactionary, short-sighted and based on hyperbolic fears. The Obama Administration should ensure that the regulations in place can effectively minimize the risks of drilling without discouraging the most-capable operators from moving forward in this vital energy frontier. In undertaking this 60-day review, the Administration must understand that its actions could have sweeping, generational impacts for the future of Arctic energy. Its decision not only affects the prospects for Shell’s venture, but also efforts by other operators invested in the region, and America’s role as a global leader in Arctic development and Arctic policy.
The Alaskan Outer Continental Shelf (OCS) holds significant influence on the future of U.S. economic and energy security as well as global geopolitical relations. The U.S. Chukchi and Beaufort Seas could well be one of the most prolific energy reserves in North America, holding an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Given its immense natural resource potential as well as strategic importance, it’s clear why the U.S. government declared that our nation has “broad and fundamental national security interests in the Arctic.”
Failure to increase Arctic oil production could force the premature closure of the Trans-Alaska Pipeline System. TAPS – one of the most critical energy infrastructures in the United States – is averaging less than 600,000 barrels of throughput a day, down from a high of nearly 2 million barrels a day in 1988. Low throughput increases the likelihood of inoperability due to the hazards that compound with low volumes of warm oil in the pipeline. Closing the pipeline would strand Alaskan oil, which currently accounts for nearly 10 percent of U.S. production, and cause a supply crisis for consumers on the West Coast who consume over half a million barrels daily of Alaskan crude.
Additionally, the United States needs to be a leader in Arctic, particularly a leader in how to face environmental challenges with science, technology and thoughtful regulation. Premature calls to end exploration because the Arctic is too harsh, too unpredictable, or too risky for any type of economic activity will put the United States on the sidelines. Greenland and Norway, both of which have already established oil and gas programs, demonstrate that Arctic exploration, while challenging, can be accomplished safely. In fact, Norway’s even laid out a 20-year plan to expand its development of Arctic resources, noting it’s “a project of a generation.” This is the kind of determination and vision the United States projected when it launched its space program. One would only hope will still possess these attributes today.
The economics, technology and outlook all point to the viability of Arctic OCS development and the need for it. While it may be years before any meaningful production of oil comes online, the United States should be taking steps now to expand exploration and production in order to meet future demand – not to discourage it.
Energy security, economic growth, and scientific understanding and leadership are reasons to “do big things” in the Arctic. No one is trying to abdicate the responsibility for protecting the environment. But now is not the time to let fear drive public policy. Let’s take a leading role and make the Arctic with all of its economic and energy security benefits, a resource for all Americans.
Source: Energy Experts Blog.