Environmental and petroleum resource conflicts: a simulation model to determine the benefits of petroleum production in the Arctic National Wildlife Refuge, Alaska
The Arctic National Wildlife Refuge (ANWR), located on the Alaska North Slope, is believed to contain high petroleum production potential. This region also has outstanding wildlife and wilderness values. Currently ANWR is closed to oil and gas leasing. However, Congress is considering an Interior Department recommendation to open a portion of ANWR to oil and gas production. Environmentalists maintain that petroleum exploration and development will have severe environmental impacts. A draft study by the Interior Department reports values that are used to generate an expected present value of the net economic benefits of petroleum development in ANWR of $2.98 billion. Alternatively, using updated oil price projections and revised tax and financial assumptions, the Arctic National Wildlife Refuge Financial Analysis Simulation Model (AFAM) projects the expected present value of net economic benefits of oil production at between $0.32 and $1.39 billion. AFAM results indicate that, within most drilling cost scenarios, oil producers would earn an aftertax profit in 100% of the simulation trials. However, in a high-cost drilling scenario, AFAM projects aftertax losses to oil producers in 45% of the simulation trials. Although the Interior Department does not report a range of net economic benefits from oil development of ANWR, AFAM indicates that the distribution of net economic benefits across all scenarios is positively skewed. Net economic benefits from oil development range from $0 to $4.75 billion with a greater probability of benefits closer to the lower value. Decision makers considering whether or not to open ANWR to petroleum development can use these values to judge if the economic benefits outweigh the projected negative wilderness and wildlife impacts. 10 references, 9 figures, 6 tables.
- Research Organization:
- Wilderness Society, Washington, DC
- OSTI ID:
- 6180681
- Journal Information:
- Mater. Soc.; (United States), Vol. 11:3
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
29 ENERGY PLANNING
POLICY AND ECONOMY
ALASKAN NORTH SLOPE
NATURE RESERVES
PETROLEUM DEPOSITS
ENERGY SOURCE DEVELOPMENT
COST BENEFIT ANALYSIS
ENVIRONMENTAL IMPACTS
PETROLEUM INDUSTRY
WILDERNESS PROTECTION ACTS
DECISION MAKING
WILD ANIMALS
ALASKA
FEDERAL REGION X
GEOLOGIC DEPOSITS
INDUSTRY
LAWS
MINERAL RESOURCES
NORTH AMERICA
RESOURCES
USA
020900* - Petroleum- Environmental Aspects
294002 - Energy Planning & Policy- Petroleum
290300 - Energy Planning & Policy- Environment
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& Safety