Effect of Offshore Drilling on US Oil Production
When we noted how little effect on oil prices ANWR might have, we had to endure the following comment from a certain troll:
PGL it is you who needs to take in the entire analysis by not focusing exclusively on ANWR, it isn’t the issue, it is only one tiny piece of the issue, and that is opening up all US oil fields that are currently off limits. Any one field would have, as you pointed out, little impact and that many years away. But the cumulative affect of all of the fields being opened will have a substantial impact.
But Kevin Drum notes:
Offshore oil reserves affected by the federal ban are estimated at 18 billion barrels, which is indeed larger than ANWR. However, EIA projects that offshore production rates would be about half of ANWR production rates, which means that lifting the ban on offshore drilling would probably have an even smaller effect on future oil prices than ANWR’s 75 cents a barrel in 2025. In other words, “tiny” was probably the wrong word in my concluding sentence above. “Minuscule” is more like it.
Kevin noted this in a “correction” after he read this report:
The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017. Total domestic production of crude oil from 2012 through 2030 in the OCS access case is projected to be 1.6 percent higher than in the reference case, and 3 percent higher in 2030 alone, at 5.6 million barrels per day. For the lower 48 OCS, annual crude oil production in 2030 is projected to be 7 percent higher—2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case (Figure 20). Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.
OK – if we open everything up, maybe the effect in 20 years will be closer to $0.03 a gallon with the effect today being next to nothing. That’s not exactly a “substantial impact”.