Posts filed under ‘oil’

ANWR Oils Well That Ends Well

The opponents of opening up ANWR to drilling love to quote a study by the Energy Information Administration, or EIA, but they never, and I mean never, quote the part that gives it some context. Yes the study did say opening ANWR to drilling would likely have little impact on world oil prices, perhaps reducing the price by 30 to 50 cents a barrel but they stop there. They don’t quote the other part of the statement “if prices were in the $27-a-barrel range.” (Emphasis mine)

The Catholics in my family would probably call that a sin of omission – I call it outright lying. Prices aren’t in the $27-a-barrel range are they? They are above $120 a barrel as of this writing. Opening up ANWR would have an immediate impact on prices even if it will be a few years before oil starts flowing.

Joel Alicea, a junior at Princeton University, is from El Paso, Texas posted on National Review Online about a study, The Effect of Opening Up ANWR to Drilling on the Current Price of Oil, [Update, now the link is showing a not found error. I’ll look for another link.] [Update the second – it’s working again] showing opening ANWR would reduce the price of oil now which didn’t get published. The reason wasn’t that it was in error, it was that economists had known about the effect for decades, at least.

“Although the referees, and I, are in agreement with your basic argument, I regret to say
that we will not be able to publish this work. Basically, your main result (the present
impact of an anticipated future supply change) is already known to economists (although
perhaps not to the Democratic Policy Committee). If Hotelling didn’t exactly spell this
out in his original article, certainly Herfindahl and others had done so by the 1960s. It is
our policy to publish only original research that adds significantly to the body of received
knowledge regarding energy markets and policy.”

Here’s a link to the rejection letter. PDF download here

Another sleight-of-tongue trick opponents use is to say that the amount of oil coming out of ANWR would be negligible. Suddenly they start talking about world production and how little ANWR would add to that. What they don’t do is simple addition. If you add the oil we can get from ANWR to the oil we can get from opening up the off-shore fields to the oil we can get from Colorado oil shale the numbers add up quickly.

Let’s not let some enviro-nuts drive public policy. I don’t know anyone who doesn’t believe in conservation, the question is always at what cost and how can we mitigate the effects of action or inaction. Right now the cost of doing nothing is astronmical.


August 8, 2008 at 3:19 am Leave a comment


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