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If you open it, oil will come U.S. interests advanced by drilling in Alaskan wilderness

By Marshall Loeb, CBS.MarketWatch.com Last Update: 5:44 PM ET Feb 16, 2001 NewsWatch Latest headlines Get Alerted

NEW YORK (CBS.MW) -- By all logic, President Bush's call to open one-twelfth of the Arctic National Wildlife Refuge (ANWR) for oil exploration should be a slam dunk.

It makes sense for the U.S. to develop as much oil at home as feasible. Consider: The U.S. needs oil desperately but produces not nearly enough for its requirements. So the nation must import about half of all the oil that it burns. Those imports alone build a trade deficit of $55 billion a year.

Trouble is, oil is seldom found where it's needed, and seldom needed where it's found.

A dangerous addiction

Much of America's foreign oil comes from rogue states headed by dictators or thugs -- oppressive places like Saddam Hussein's Iraq, Muammar Gaddafi's Lybia, Hugo Chavez's Venezuela -- plus Iran, Indonesia, Saudi Arabia, Nigeria, among others. The Organization of Petroleum Exporting Countries (OPEC), a blatant monopoly that possesses 77 percent of the world's oil deposits, sets production quotas for its members, and seeks to fix prices.

The ANWR reserves could supply an estimated 10 percent of U.S. requirements for about 20 years. Rather than be beholden to these people, politically and economically, it makes sense for the U.S. to develop as much oil at home as feasible. But the lush areas in the Lower 48 -- Texas, Oklahoma, Louisiana, others -- have long been largely tapped out.

The richest potential field remaining is thought to be beneath ANWR (pronounced anwar), a barren, desolate plain in northernmost Alaska about the size of South Carolina.

No one knows for sure how much oil lies beneath the refuge, but the U.S. Geological Survey reported in 1998 that there could be anywhere from 5.7 billion barrels to as much as 16 billion barrels of recoverable oil, with an expected average of about 10.3 billion barrels of extractable crude. That amount would be enough to supply U.S. needs for about two years, without importing any oil. More likely, it could supply 10 percent of U.S. requirements for about 20 years.

We're not currently exploring in ANWR because opponents argue that drilling would despoil this sensitive wilderness area and decimate the wildlife -- caribou, muskoxen, wolves, and 180 bird species -- that populate it.

Environmental dispute redux

I've been through this ideological battle before. A quarter century ago, just after the first oil crisis, the nation was locked in impassioned debate over whether to build the Trans-Alaskan Pipeline System.

Next to the U.S. Interstate Highway system, the $8 billion Trans-Alaskan Pipeline was the most awesome and important construction project of the 20th Century. Opponents' arguments were almost identical then and now: the pipeline would ruin the tundra and desecrate the environment. The rich wildlife wouldn't be able to scale the four-foot wide pipe, and would not be able to reach breeding and calving grounds, so their numbers would plunge.

We journalists had many bitter discussions in our newsrooms over the pipeline.

Ultimately, Congress in 1973 authorized the pipeline to be built -- and what a marvel it turned out to be! Next to the U.S. Interstate Highway system, the $8 billion Trans-Alaskan Pipeline was the most awesome and important construction project of the 20th Century. Snaking 789 miles across three mountain ranges and three earthquake zones, and underneath 350 rivers and streams, it carries oil from the North Slope fields at Prudhoe Bay to Valdez, Alaska's northernmost deep-water port, where massive tankers haul it out.

The North Slope provides the U.S. with almost 20 percent of its domestically produced oil. But production peaked in 1980 at two million barrels a day, and now is down to about one million barrels and sliding. All the more reason to develop ANWR. If drilling began there tomorrow, it might be 10 years before oil could be produced and shipped.

History as a guide

The experience of oil drilling and development so far in Alaska should calm environmentalists' fears. Yes, the tanker Exxon Valdez ran aground on Bligh's Reef in 1989, and hemorrhaged 11 million gallons of crude into Prince William Sound. But that disaster didn't involve the drilling or the pipeline, and in the 12 incident-free years since then, ships have adopted many new safeguards.

On the North Slope, oilmen and state officials are taking painstaking steps to preserve the wildlife. For example, around 580 special crossings for caribou and other animals have been built on the pipeline. Since construction of the pipeline began, the population of the Central Arctic herd of caribou has surged to 20,000 from less than 5,000; the Western Arctic herd has increased to 463,000 from 70,000.

As New York Times reporter Andrew C. Revkin wrote from Anchorage in January, "Oil drilling is still far from a green industry, but advances in computing and exploration methods, new techniques that allow dispersed underground targets to be reached from a single drilling site and different waste disposal practices have greatly reduced the environmental damage from a modern-day oil path."

I can attest to all than, having visited the Alaskan oil country three times, most recently in June. The rigs and pipelines and industrial buildings on the North Slope and in Valdez are as neat and clean as any I've ever seen.

And many are the times I consider how fortunate we are that we made the correct decision in the 1970s and built the pipeline. Just think of how squeezed we would be by the OPEC cartel today if we were almost totally dependent on imports and didn't have those million barrels a day flowing down from Alaskan to the Lower 48.

-------------------------------------------------------------------------------- Marshall Loeb, former editor of Fortune, Money, and The Columbia Journalism Review, writes "Your Dollars" exclusively for CBS.MarketWatch.com. Editorial assistant Elizabeth Carson contributed to this column