Friday, March 18, 2005

Alaska Ho! The AWNR

Last I heard the US Congress has approved a budget bill that could include massive drilling fot oil & gas in the Alaska Nation Wildlife Reserve (AWNR), something set aside for over 50 years. Well, the budget bills are in trouble for other reasons, but this section of the appropriations bill was passed with flying colors. Legislation by appropriation. Whatever you think, here's the reality of the situation.

Alaskan crude oil comes down all the way from North Slope oil fields to the port of Valdez, of major distinction because the largest oid spill happened off there in Prince Edward Sound - the Exxon Valdez, of all boat names. The oil is transported by oil tanker to ports mainly near Los Angeles and El Segundo, California, although some goes to other port refineries on the West Coast.

Now, there is little way to transport crude oil over the Rockies, so the oil and refined products tend to stay on the West Coast. Only the West Coast. So if the West Coast refineries are full of crude oil, the excess would go to places like China and Korea and Japan, since the US cannot absorb much more volume of crude oil on the US West Coast.

So one might draw the correct conclusion that opening up the ANWR would not do dookie for the US balance of crude oil consumption. I've been in this business for many years and the major oil companies really do not want to develop the AWNR because it is so expensive. It was purely political. The soonest something could happen would be 2010, and by then the oil flow would only be a million barrels a day, or less than a tenth of one percent of our daily imported crude oil consumption. It would come at billions of dollars worth of investment and, frankly, the oil exploration and production companies would want some government money just to get it out of the ground. Wow, you didn't know that that, did you? Heck, the oil companies can't even drive a truck over the ground except when it is totally frozen. It's bad for the permafrost but also the trucks get stuck real bad in the mud.

Opening the Western Gulf of Mexico to drilling makes more sense to me, even though South Padre Island is in that part of the world. We don't want drilling on the beaches here but some gas wells about 13 miles out to sea would provide not only some needed energy but also some real good fish habitat. We've seen some small-time wilcatters driling on Padre Island National Seashore south of Corpus Christi but they are small time operators. The real big drill rigs are out in water at least a 200 feet to a half-mile deep, or more.

I feel bad about the ANWR going to heck over some misguided energy policy. Find it on the map; it is a horrible place to extract hydrocarbons, about as far from Valdez as you can get. What happened was that the old wells in Prudhoe Bay have been playing out, much diminished. Not as much oil is coming out of Valdez any more. The local senators and highly connected polls want to keep the boondoggle going, however, no matter what the cost. It is a shame; we all know just a little bit about the unique wildlife and natural beauty up there.

We can safely get more bang for the buck from the Gulf of Mexico and I don't think it would hurt us on South Padre Island. The worst problem is the towing of oil platforms into the port of Brownsville, which sometimes causes tar to end up on our beaches. Something can be done about that, too. And that, friends, is the news!


Everett said...

I've been a member of the NRDC for about eight years and have sent numerous letters to Senators and Congressmen and all for naught so it would seem. I read or heard that if ALL the oil could be gotten out of the ground in one fell swoop, and injected into the US economy, it would be all used up in under six months! So why bother? As you said the big oil companies don't appear to be all that anxious to get up there and get busy drilling. They would do better to begin serious implimentation of renewable energy initiatives. One of the major oil companies has in fact just recently admitted that they are going to have to get going on wind and solar in a big way. When I hear them finally admit that, why do I get this gut-wrenching feeling that in a few years you will only be able to buy a windmill or a solar panel from of their stooge companies? Keep up the good fight down there! Oh BTW, how tall does a Plumeria tree grow and how much shade does one put out? That could be your 'retirement' business down there Sam! Regards, Everett

Sam said...

Hey Everett! THe only good news I've heard is that the House and Senate budgets are out of synch and the President hates what the Senate did on Medicaid so it is still not a done-deal yet.

How's the windmill? With all those winter winds I'm surprised the prop hasn't flown south. I'm all for that kind of renewable thing, and am looking at solar hot water on South Padre (not a much wind as you guys). Rain barrells for the plumerias, too! If things go right, I'll try to buy the empty property next door and really go big-time. Best regards,