Environmental and petroleum resource conflicts: a simulation model to determine the benefits of petroleum production in the Arctic National Wildlife Refuge, Alaska

Journal Article · Thu Jan 01 04:00:00 EST 1987 · Mater. Soc.; (United States)

OSTI ID:6180681

Goerold, W T

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), Journal Name: Mater. Soc.; (United States) Vol. 11:3; ISSN MSOCD
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020900* -- Petroleum-- Environmental Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290300 -- Energy Planning & Policy-- Environment
Health
& Safety
294002 -- Energy Planning & Policy-- Petroleum
ALASKA
ALASKAN NORTH SLOPE
COST BENEFIT ANALYSIS
DECISION MAKING
ENERGY SOURCE DEVELOPMENT
ENVIRONMENTAL IMPACTS
FEDERAL REGION X
GEOLOGIC DEPOSITS
INDUSTRY
LAWS
MINERAL RESOURCES
NATURE RESERVES
NORTH AMERICA
PETROLEUM DEPOSITS
PETROLEUM INDUSTRY
RESOURCES
USA
WILD ANIMALS
WILDERNESS PROTECTION ACTS