For every action, government or otherwise, there are costs and benefits. Since the government owns the Arctic National Wildlife Refuge and no private citizen has claim to it, the relevant question to ask when considering harvesting its oil reserves is not one of rights, but one of costs and benefits.
The benefit of drilling would be that the quantity of oil on the world market would increase, causing prices to decline. This would be a boon to the nation’s economy. According to Jerry Taylor, Director of Natural Resources Studies at the Cato Institute, “Industry’s best estimate is that ANWR could produce about 1 million barrels of oil per day at its peak. That’s a 1.25 percent increase in global production that, all things being equal, would reduce world oil prices from $20 per barrel to about $18.
While that’s not inconsequential, it’s not an Organization of the Petroleum Exporting Companies cartel-breaker either. But assume for the sake of argument that ANWR holds about 5 billion barrels of economically recoverable reserves ? a reasonable estimate given what we know. That oil would have a discounted value of about $30 billion. That’s a lot of wealth we could create for an economy trying to escape a recession.”
However, it is vital to note that the major cost of drilling is one of future national security ? of having sufficient reserves in the unlikely event of a war emergency, not of environmental impact.
If the benefit of keeping the land undisturbed was truly greater than the benefit of using the oil, the land would be purchased from the government by those with such a high evaluation of it. The government could use the money from the sale to buy its oil from some other source. This is highly unlikely because there is such an abundance of environment for enthusiasts to enjoy that does not happen to be situated atop a U.S. oil reserve.
The answer to whether or not the United States should indeed drill in Alaska lies in a comparison between the net benefits of cheaper fuel and the benefits of future security that it provides. President Bush, as an official subject to termlimits, does have an incentive to use the oil now for economic growth rather than saving it for later in the unlikely event that the U.S. oil supply could be cut off during a war. We need an objective second opinion drawn from further unbiased studies on defense requirements, not environmental policy.
UR Libs can be reached at libertarian@campustimes.org.
