Obama on wrong track with Alaska energy | Don C. Brunell

In his State of the Union address, President Obama highlighted plunging gas prices. Ironic, since Obama has done everything in his power to curtail domestic oil production and drive up gas prices.

For example, the president wants to lock up untapped federal oil reserves surrounding the Trans-Alaska pipeline. If he succeeds, he will choke off future oil supplies to the pipeline, bleeding it dry and forcing it to shut down and be dismantled.

That will not only hurt Alaska, but Washington and the Pacific Northwest as well. Refineries in our state process Alaska crude into the gasoline and diesel we use every day and provide thousands of family-way jobs with good benefits.

Put succinctly, since the 800 mile Trans-Alaska pipeline was constructed forty years ago, it has been an economic boom to Alaska and the Pacific Northwest and an energy lifeline for our country.

The pipeline was built between 1974 and 1977 in response to the 1973 oil crisis, which caused a sharp rise in U.S. gas prices. It provided us with an important domestic oil supply and a way out of captivity from Middle East oil sheiks.

Washington benefitted directly from the project. Our seaports shipped much of the construction materials and thousands of workers packed supplies and built parts for the pipeline.

Alaska has produced more than 17 billion barrels of oil since the first wells were tapped. In 1988, it accounted for 25 percent of domestic production. Now, production is declining at Prudhoe Bay and Kuparuk where oil was first discovered on the North Slope. However, there is great potential for new discoveries in the Arctic, both onshore and offshore.

A U.S. Department of Energy report estimates there are 22 billion barrels of recoverable oil reserves on the North Slope, including reserves from existing fields as well as undiscovered resources. Natural gas estimates reach as high as 124 trillion cubic feet.

But the president has vowed to ban energy exploration on 22 million acres of federal land, despite a law that specifically says he cannot do so without the consent of Congress. Rather than declare much of Alaska’s federal lands off limits, President Obama needs to allow environmentally safe exploration in three important areas.

First, west of Prudhoe Bay, the U.S. Geological Survey estimates there are 900 million barrels of oil and 17.5 trillion cubic feet of natural gas in the National Petroleum Reserve-Alaska.

Second, in a very small portion of the Arctic National Wildlife Refuge there are 10.4 billion barrels of recoverable oil using today’s technology.

Finally, the Alaska Outer Continental Shelf constitutes one of the world’s largest untapped resources with as much as 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Interestingly, the Russians are already producing oil from Arctic Ocean platforms.

Federal oil leases can bring in billions of dollars to support federal spending. Instead of expanding those opportunities, the president is proposing $85 billion in new taxes on the oil and gas industries to help pay for his historic federal spending programs. Those are costs that we ultimately pay in higher fuel and heating prices.

There is another way. Rather than putting proven reserves off limits to production, open them to exploration. Remember, in Alaska oil field and pipeline construction is done in the winter using ice roads which disappear in the spring.

Alaska is an example of what oil revenue can provide. Currently, it accounts for more than 90 percent of Alaska’s general fund revenues and provides one-third of Alaska’s jobs. Developing our domestic energy supplies in Alaska and the lower 48 will bring similar economic benefits to the entire nation.

That makes better sense for America.

Don C. Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.