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In response to continued high gasoline prices, President Joe Biden recently announced an extension of the withdrawal of about 1 million barrels per day from the Strategic Petroleum Reserve (SPR), the country’s emergency reserve of oil. We could get at least that much oil through additional domestic drilling. Alaska’s Arctic National Wildlife Refuge (ANWR) alone has the potential to deliver up to 1 million barrels per day, but drilling there has been blocked by the Biden administration since Inauguration Day. Here are five reasons why ANWR is a superior oil source for the SPR.
1. ANWR supplies extra oil, not borrowed oil that has to be paid back
The SPR contains previously produced oil purchased by the federal government and held in reserve for emergencies. Because of the Biden administration’s withdrawals for the past few months, the SPR is currently at its 30-year low and will need to be topped up at some point if it ever becomes available again. Indeed, the energy markets recognize that the SPR must be paid back barrel by barrel, which is one reason why tapping it rarely brings oil prices down as much as hoped. ANWR, on the other hand, of course never needs to be topped up and can therefore be a real addition to the oil supply. It’s like the difference between an unemployed person taking out a bank loan to cover expenses or getting a new job.
2. ANWR would supply oil for decades rather than months
Withdrawals of 1 million barrels a day of the SPR could only take a few months for the reserve to fall dangerously low – in fact, we’re already there. But as evidenced by the fact that drilling around Prudhoe Bay in Alaska – the project most similar to ANWR – the production of 40 years, ANWR would very likely be a daily supplement to the domestic oil supply for a long time. At its peak, ANWR is estimated to be able to deliver an average of 880,000 barrels per day and possibly more.
3. ANWR generates revenue while the SPR costs them
The SPR, like all federal programs, requires taxpayer money to maintain and operate. In contrast to the SPR’s burden on government resources, the cost of developing ANWR would be borne entirely by the private sector. In addition, ANWR would generate lease, royalty and income tax revenues estimated to reach $150 billion to $296 billion dollars for the federal government and the state of Alaska.
4. Unlike the SPR, ANWR does not burden the existing infrastructure
An underexposed drawback of the SPR is that the storage facilities in Louisiana and Texas are located near an oil boom. The infrastructure required to transport the region’s oil to refineries, refine it, and deliver the refined products to customers is already at or near capacity, with occasional bottlenecks. To the extent that we should make room in the system for SPR oil by scaling back domestic production, the entire goal has failed. ANWR oil, on the other hand, would be transported through the currently underutilized Trans-Alaska Pipeline and then shipped to one of the many refineries that need it.
5. Locals support ANWR drilling, but not SPR withdrawals
In Alaska, drilling in ANWR enjoys significant and bipartisan support, thanks to the aforementioned revenues and job creation projections in the tens of thousands. And, judging by their elected leaders, most Louisianans and Texans similarly support local oil production and see the Biden administration’s withdrawal from the SPR as a poor alternative to real drilling.
Naturally, ANWR drilling cannot happen right away. But the mere fact that so much oil is on the way in the future would have a beneficial effect on current prices.
Unfortunately, the reason why Biden would rather borrow oil than drill is the climate-change-inspired fantasy that we’ll only need fossil fuels for a short time before his “incredible transition” to clean energy holds. Tapping into the SPR to lower prices is a short-term solution that fits the government’s wishful thinking, while ANWR and other domestic drilling is a sensible long-term response to the pain at the pump, not just for today but for years to come.