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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (138583)	8/6/2001 12:03:37 PM
From: tejek	Read Replies (2) \| Respond to of 1571399

ANWR Doesn't Hold the Answers By Christopher Edmonds Special to TheStreet.com 8/6/01 9:47 AM ET Congress' move last week to open for drilling a tiny part of the Arctic National Wildlife Refuge, or ANWR, may appear to give the Bush energy plan a boost. But a closer look suggests the victory is hollow, both for the president and in the bill's lofty claim in its title to secure our future energy. And, as your investments go, ANWR is irrelevant. If the watered-down bill passed by the House of Representatives is any indication, it isn't likely the Alaskan tundra will see a drill bit anytime soon. To gain passage, the bill's supporters accepted amendments limiting drilling to just 2,000 acres of the protected refuge -- dramatically less than Bush's proposal to open the 1.5 million acres of ANWR that could be developed under current land preservation laws. (The entire refuge encompasses more than 19 million acres.) But that drop in the bucket may be more than can be expected in the Democratic-controlled Senate, where even if it were to sneak its way to the floor, Sen. John Kerry (D-Mass.) has said he would filibuster any legislation authorizing ANWR drilling. Insignificant and Untimely When the Bush administration claims that ANWR is a panacea to the nation's energy future, it's thinking about your children's future. In fact, the most optimistic pundits say we wouldn't see a drop of oil from ANWR until at least 2006, likely later. As G. Bryan Dutt of Ironman Energy Capital and a member of the TSC Energy Roundtable quipped earlier this year, "The cycle will probably change three or four times between now and the time real ANWR production occurs." Indeed, the cycle has already changed, leaving many wondering if we really need to disturb ANWR at all. Current estimates suggest that the entire Arctic National Wildlife Refuge could provide the equivalent of 10 billion-20 billion barrels of oil. The 2,000-acre House plan would likely yield somewhere around 20 million barrels, equivalent to one day of U.S. consumption -- hardly a legacy for future generations. Those figures make rhetoric of arguments that drilling in ANWR will result in everything from a significant improvement in national security to a solution to the California power crisis. While exploring ANWR may be in the nation's long-term energy interests, it's time to be more realistic about benefits from the Alaskan tundra. Opportunity Costs As this column has noted before, from an investment perspective, the beneficiaries of any ANWR drilling will be limited to those companies that already have a presence in Alaska and the integrated super-majors with resources to build out uncharted exploration and production territories. The shortlist would include BP Amoco (BP:NYSE - news - commentary), Exxon Mobil (XOM:NYSE - news - commentary), Chevron (CHV:NYSE - news - commentary) and Phillips (P:NYSE - news - commentary). But if only 2,000 acres of ANWR are opened for production, many of the integrated names might choose to pass on the opportunity. After all, the fixed costs to establish drilling infrastructure would be significant -- even for 2,000 acres -- possibly making limited exploration uneconomical. The cost per barrel of production from a limited area may be high enough to eliminate the benefits of drilling altogether. Clearly, ANWR, especially as Congress has cast it, isn't a panacea at all for either investors or those looking for a fix to future energy security. -------------------------------------------------------------------------------- Christopher S. Edmonds is president of Resource Dynamics, a private financial consulting firm based in Atlanta.

To: tejek who wrote (138583)	8/6/2001 9:56:48 PM
From: hmaly	Respond to of 1571399

Ted Re.....more oil producers are non OPEC and eventually, they are expected to undercut OPEC and the price will drop to around $18. From what I understand below that price, drilling becomes economically unfeasible.<<<<<<<< You can bet Exxon and the rest know better than you or I what the future price of oil will be, and whether at that price, drilling ANWR will make money. You can also bet that if it isn't profitable, ANWR won't get anything more than test wells. In other words, that article is hardly off in its evaluation of the situation. <<<< It is off if they feel that big oil would still drill in ANWR without any hope of a profit. Either their estimate of the costs/barrel or their estimate of the future price is off, because big oil wouldn't care less about ANWR if they didn't feel they could make money. . Even at 5.6 billion barrels, the high end of expected recovery, the ANWR could satisfy the US's consumptive needs for only 10 mos. <<<<< This is such a silly argument. How many other oilfields are bigger than this one in the US. Ten months is ten months. The ANWR is home for a significant number of species including the Porcupine Caribou. There herd is huge consisting of 130k animals. The number of caribou per square mile is considerably higher than any other area in Alaska and is 5 times denser than the caribou population near Prudhoe Bay, another drilling site. For the Porcupine herd, the ANWR is critical for the dropping of their calves, providing forage, an area relatively free of predators and ocean breezes that repel the mosquitos.<<<<<<< There are oil wells all over texas, the the cattle still give birth, and there still are fish in the gulf, and people still surf on the CA beaches. Why is an oil well incompatible with the caribou; especially after the herd around Prudoe doubled in size since 1960. Many oil proponents say the infrastructure footprint would be smaller than that of Prudhoe because of new tech. However Alaskan environmentalists are concerned, that unlike Prudhoe which has one large pool of oil, the ANWR's oil is scattered over many small pockets over a larger area and may end up with a much larger infrastructure and subsequent footprint.<<<< Could be. Even more reason to do some exploratory drilling and find out. Then we can give our arguments based on facts, not scaremongering. The Wildlife Service contends there is only enough river water for ten miles of ice roads.....the oil industry believes it will need considerably more than ten miles to service the drilling site<<< I hate to shock you, but that is why oil companies hire engineers. To overcome the mundane problems. And while winter drilling will not interfere with the caribou and the migratory birds, the ANWR is the spot where pregnant polar bears set up their dens and drop their newborn....and they do that in winter.<<<<<< So now you are telling me that those 130,000 caribou you referred to 2 par. earlier are ok, but now big oil is going to bother the bears in their dens. Just how will they do that. Politically, the ANWR abuts two Canadian national parks and any drilling or commercial activity has been prohibited in those parks Just as the Beaufort sea abuts the two Canadian parks. That didn't stop Canada from drilling. The Canadians expect us to do likewise in the ANWR. < We are doing just like Canada. Canada is drilling in the Beaufort sea, which abuts their national parks. If we drill in ANWR, we also will be drilling next to their parks.