Alaska’a Arctic Is Key To North American Energy Self-Sufficiency: In an op-ed recently published in the Anchorage Daily News, CEA-Alaska Communications Director Mary Ann Pease wrote about the 160% increase in the cost of regular gasoline since 2002 and the role of Alaska’s Arctic in achieving increased price and supply stability. Alaska’s annual contribution to global energy supply has fallen 44% from 377 million barrels of crude oil (2002) to an estimated 210 million barrels (2012). Alaska’s resources will play a key role if North America is to achieve energy self-sufficiency by 2020, but roadblocks include state tax and fiscal policies and federal overreach into state resource development. This op-ed also ran in the Alaska Journal of Commerce.
COMMENTARY: Shell’s Arctic effort can stem production decline
MARY ANN PEASE, GUEST COMMENTARY
Dec 27, 2012 – 10:27 AM AKST
In 2002 a gallon of regular gasoline cost U.S. consumers $1.44. Ten years later that same gallon cost $3.65, a 160 percent leap. U.S. median household income increased 20 percent during the decade. A recent “Frontline” TV show on PBS noted that some families in America are choosing between food for the children and gasoline for the family vehicle. Energy costs are taking a larger share of the family budget than ever before.
The vast majority of changes to retail gasoline prices are due to changes in crude oil prices that are driven by worldwide supply and demand. Alaska’s contribution to global energy supply dropped from 377 million barrels of crude oil in 2002 to an estimated 210 million barrels in 2012. Had Alaska production remained steady, $16 billion in additional annual economic activity would exist here at home, contributing to jobs and increasing price and supply stability. Instead, that $16 billion in cash is exported each year to prop up foreign regimes.
This astounding 44 percent decline in oil production, while other energy producing provinces thrive, sends a clear and convincing message that state and federal policies are out of whack with the best interests of energy consumers in Alaska and the U.S. Consumer Energy Alliance, or CEA, believes North America can achieve energy self-sufficiency by 2020.
CEA’s “New Energy Future” report provides a path to use new technologies to increase conventional and alternative energy supplies as well as improve efficiency to reach that goal.
Alaska will play a key role in achieving self-sufficiency. With over 50 billion barrels of recoverable oil, untold amounts of natural gas, and millions of tons of mineral resources required to develop alternative energy sources, Alaska’s onshore and offshore resources rival those of any place on the planet. Roadblocks include state tax and fiscal policies — which everyone seems to agree need modification — and mindboggling federal overreach into state resource development.
While opposition to onshore oil field development in such places as the Arctic National Wildlife Refuge seems to be falling off a cliff as science replaces emotional appeals (Alaskans want it, the caribou like it, and America needs it), offshore Arctic exploration faces greater challenges. For those who favor domestic jobs, energy, and scientific research, this is particularly vexing since drilling in Alaska coastal waters began in the 1960’s and has occurred with no associated irreparable harm.
Technology continues to improve. Investments in environmental and personnel safety have exploded. Permitting processes are more stringent than anywhere in the world. Cultural, subsistence and societal concerns are now addressed before any activity occurs. While Alaskans have a right to expect due diligence with respect to these issues, they also have a right to expect progress on providing economic opportunities and bringing domestic energy supplies to market.
Royal Dutch Shell’s Arctic offshore experience is demonstrative of an effort where all Alaska stakeholders — consumers, students, labor unions, businesses, governments, local communities, environmental groups— can work together to advance the best interests of the economy as well as the global environment. After spending over $5 billion and years of effort, Shell came tantalizingly close to completing exploration wells this year, but extreme caution, adverse sea ice conditions and certification issues for an oil spill containment vessel thwarted a well-organized and fully mobilized drilling effort.
While Shell now has all necessary permits to drill and will have a fully certified fleet of vessels for the 2013 drilling season, drilling opponents may continue to attempt to derail this properly permitted and extensively vetted exploration activity. It is unclear why these national and international groups want to force offshore exploration out of Alaska to parts of the world where permitting lacks environmental, scientific, and regulatory rigor.
While oil and gas exploration in Alaska is expensive and protracted, all Alaskans, especially young Alaskans, should welcome the opportunity to take on this challenge of demonstrating to the world how to do this correctly. Alaskans need to support a robust drilling program in the Arctic.
Mary Ann Pease is the Communications Director for Consumer Energy Alliance Alaska, and has been involved in local energy issues for over two decades. You can reach CEA at consumerenergyalliance.org.