The United States took a giant step toward securing its energy future this month with the initiation of drilling exploratory wells in the Beaufort and Chukchi seas. The development of these wells marks the first time in nearly two decades that multiple oil drilling rigs have been working off Alaska’s shore simultaneously. While this may seem like a minor development, it has the potential to profoundly change America’s economic and energy future.
This begs the question, how can two oil wells have such a significant impact on the energy future of the United States? The answer lies in the abundance of the resources being tapped. Federal officials estimate the Chukchi and Beaufort seas could contain upward of 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Put another way, that’s the largest untapped source of proven oil reserves in North America.
For the West Coast in particular, these resources represent a tremendous economic opportunity that could provide the foundation for the region’s future. After all, development is expected to provide more than 50,000 jobs nationwide, significant state and local government revenues, and a more affordable and reliable source of energy for the entire West Coast, one of the largest economic regions of the United States.
A more affordable source of energy is critical to the western United States’ long-term success, as the region currently must import more than 1 million barrels of oil a day to meet its energy needs. After being self-sufficient in the 1980s, the West Coast has quadrupled its reliance on OPEC over the past two decades.
The production of oil and gas resources in Alaska’s North Slope is also critical for the longevity of one of our nation’s most critical infrastructure assets, the Trans-Alaska Pipeline System. With Prudhoe Bay production declines, the volume of oil transported through the pipeline has dropped to an average of 595,000 barrels a day. Operating at such a low capacity could force the pipeline to close because of weather challenges. If this happens, the main source of domestic crude oil to Western refineries would be sacrificed, and the West Coast’s economy would suffer.
The road that led to this situation was paved with a combination of prohibitive regulations, declining production and the lack of a national energy plan. This didn’t begin with the current president, but he hasn’t helped much, either. Since President Obama took office in 2009, oil production on federal lands has reached its lowest point in nearly a decade. Last year alone, production on federal lands dropped 13 percent, and federal offshore production dropped by 17 percent.
While the president approved the operations in the Arctic, it took him four years to do so, and final approvals came only after strident objections of opponents that the administration failed to rein in.
These opponents would like us to believe it’s too risky to safely explore the Arctic. They argue we should forget about these resources that are nearly a quarter of our known, technically recoverable Outer Continental Shelf reserves.
While opponents are concerned with the safety of the Arctic’s sensitive ecosystem, it is unfair to assume the oil and gas industry does not share the same sentiment. For companies such as Royal Dutch Shell PLC, the launch of this project is the culmination of more than $5 billion in investments and six years of preparation, which have enabled the project to receive approval from the Environmental Protection Agency as well as multiple other federal agencies with oversight of the operations.
Commandant of the Coast Guard Adm. Robert J. Papp Jr. has stated his belief that both the industry and the Coast Guard are ready for the task. “[Shell] truly did their homework, I believe,” Adm. Papp said, “and I think they are going to be well prepared.”
Other Arctic nations — including Canada, Russia, Norway and Greenland — already have established or will soon establish Arctic offshore oil and gas programs. In fact, the United States is one of the last nations to tap into the resources off our own coastline. Doing so is a critical part of any “all of the above” energy portfolio.
Technological advances have led to the shale revolution, and they are enabling Arctic exploration as well. As a world leader, the United States needs to seize this opportunity to raise the bar for responsible energy production that will propel our economy forward. We can no longer afford to block access to our natural resources, placing our own economy and quality of life at risk. In the case of Arctic oil and gas programs, the economic health of the entire West Coast of the United States is at stake — which, in California, includes the world’s ninth-largest economy.
David Holt is president of Consumer Energy Alliance.