It is a fallacy to think that drilling in ANWR will increase our oil supply. In this series, we look at the reasons why building closer trading ties with Canada will get more oil to U.S. markets than could ever be extracted from ANWR.
Let's take a closer look at the estimated reserves for ANWR and Canada:
ANWR: 5.7 to 10.4 billion barrels
Canada: 5.0 to 178.8 billion barrels
Canada has at least as much oil as ANWR with a big upside -- if the country's oil sands can be exploited. How realistic is that?
According to the Canadian Association of Petroleum Producers [CAPP], 994 million gallons of petroleum were extracted from oil sands in 2004. CAPP estimates that oil sand production will range from 2,098 to 2,264 million gallons in 2012 -- the earliest year that ANWR production could begin if the go-ahead were given today.
The U.S. Department of Energy [DoE] estimates it would take 7 to 12 years for oil to begin flowing from ANWR and that output could reach 422 million gallons a year 6 years after exploitation began. That would be 2018 to 2023 if Congress said yes today.
In summary, Canadian oil sand production in 2012 will be five times that of ANWR in 2018 at the earliest. The U.S. could benefit from this increase in Canadian oil production -- unless Canada, ruffled by recent and ongoing trades disputes with the U.S., decides to export the oil to Asia.
Look at the whole chessboard. Canada, our ally to the north and one of the most stable democracies on the planet, is expected to produce far more oil faster that we ever could by opening up ANWR to drilling. It is in our interest to see to it that Canada's bounty is used to our benefit.
An expanded version of this series, including links to resources, can be found at tommywonk.blogspot.com. Tommywonk thanks Bill Detwiler for providing the inspiration and a great deal of research and analysis for this series.
