Drill Drill Drill

Ok...so I have heard so much about offshore drilling and drilling in ANWR that I finally decided to go out and figure out what the heck is the real story about ANWR in particular. I found a very interesting online piece by a guy who used to work at Prudhoe Bay. You can read the whole thing here...but basically here are a few key highlights:

• Prudhoe Bay is only 15 miles x 40 miles. A lot smaller than I thought...and produces about 1 million barrels per day (more on that in a second)
  
• "The oil itself lies in porous rock formations anywhere from 5,000 to 20,000 feet below the surface. It rises to the wellhead under its own geologic pressure, so no pumping is required. Produced oil normally comes up mixed with water, natural gas, and even paraffin wax crystals."...kind of makes it sound like a pretty low impact deal to me.
• "In order to protect the tundra, drill sites are constructed on 4' thick gravel pads. Even if a 1" drop of crude oil drips onto the pad, workers are required to shovel it up for proper disposal."...Maybe Pelosi and Boxer should hold car repair shops in CA to the same standards???
  
• The Alaska pipeline runs from Prudhoe Bay to Valdez, Alaska ~800 miles in 5.5 days...or about 6 mph...faster than traffic in CR!
  
• "the pipeline is designed to allow 5 feet of vertical movement and up to 20 feet laterally just in case"...if total travel due to an earthquake exceeds 21 feet...then we probably have a bigger issue than some spilt oil.
  
• "Vehicles are left running from September through May, 24 hours a day... Otherwise, they just wouldn't start again."...reminds me of crapchester...I mean Rochester.
• "If you need to throw any trash in the dumpster at the end of the day, you must first bump the dumpster with the front of your pickup truck. This ensures that you're inside the truck if there's a brown bear in the dumpster! "...that is just funny!
  

Anyway...the first bullet above. If 600 square miles can produce 1Mbpd that is a pretty awesome return. So let's assume that we can replicate Prudhoe Bay in the neighboring ANWR area...what do you think an additional 1Mbpd would buy us? Well according to the Energy Information Administration the total crude imports for the US in May'08 was about 9.6Mbpd....making 1Mbpd a sizable chunk....especially when you look at the list of where we get the crude:

Crude Oil Imports (Top 15 Countries) (Thousand Barrels per Day)
Country	May-08	Apr-08	YTD 2008	May-07	YTD 2007
CANADA	1,840	1,952	1,889	1,858	1,876
SAUDI ARABIA	1,579	1,453	1,531	1,574	1,389
MEXICO	1,116	1,259	1,207	1,461	1,467
VENEZUELA	1,030	1,019	998	1,232	1,103
NIGERIA	851	1,115	1,053	882	1,048
IRAQ	583	679	670	341	456
ANGOLA	464	579	468	680	581
ALGERIA	440	393	329	496	492
BRAZIL	318	201	209	152	165
KUWAIT	263	176	227	162	179
COLOMBIA	245	149	184	104	101
ECUADOR	162	160	194	201	200
RUSSIA	119	106	86	232	156
LIBYA	96	85	73	33	51
EQUATORIAL GUINEA	93	40	58	0	52

So if we assume that we are OK buying oil from our neighbors Canada and Mexico...that knocks off about 3Mbpd making the "bad" crude imported only 6.6Mbpd. So we could in theory knock that down by ~15%. Now the fun begins...who would you like to send a message to the most? The Saudis? The Venezuelans - or more directly Hugo Chavez? (that one seems like a great place to start).

One downer though...oil production from the North Slope is decreasing every year since '88 (see chart). The Alaska pipeline is currently only running about 50% capacity (can handle ~2.1Mbpd). As such, we better start drilling more in the North Slope/ANWR before that continues to slide. It would be a real shame to have a pipeline at 50% capacity sitting there when you could have it running at 100% capacity...environmentally I would think it a better option to fully utilize the existing infrastructure than to build more in new places. But what do I know...

Oh yeah...here is a quick quote from ANWR.ORG

"The 10-02 Area of ANWR specifically set aside for oil and gas exploration by Congress lies only 55 miles away from Pump Station One of TAPS [Trans-Alaska-Pipeline-System]. The 10-02 is estimated by the USGS to contain the best potential for a “super-giant” oil field on the North American continent. Contributions by ANWR oil will have the capability to fill the TAPS for over 25 years. Had then President Clinton not vetoed ANWR legislation when it passed Congress in 1995, using EIA’s current figures, Alaska would have saved the nation $100,800,000 every single day in 2005. And in 2006 the savings to the nation would be an average of $114,450,000 per day!"

FYI - Someday we will get started talking oil shale...where the US sits on ~2 trillion barrels of the total world oil shale reserves of ~3 trillion barrels (a.k.a., 3 million-million barrels)...just talk to Grandpa-Russel and great grandpa-Rocky about this one! ...But not tonight.

FYI - last picture is of the pristine ANWR region. Does that mean we can not drill in TX or KS?