SR/OIAF/2008-03

Analysis of Crude Oil Production in the 

Arctic National Wildlife Refuge

May 2008

Energy Information Administration 

Office of Integrated Analysis and Forecasting 

U.S. Department of Energy 

Washington, DC 20585

This report was prepared by the Energy Information Administration, the independent statistical and 

analytical agency within the Department of Energy. The information contained herein should be attributed 

to the Energy Information Administration and should not be construed as advocating or reflecting any 

policy position of the Department of Energy or any other organization. Service Reports are prepared by 

the Energy Information Administration upon special request and are based on assumptions specified by 

the requester. 
Contacts 

This report was prepared by the staff of the Office of Integrated Analysis and Forecasting, 

Energy Information Administration (EIA). General questions concerning the report can be 

directed to John Conti (john.conti@eia.doe.gov, 202/586-2222), Director of the Office of 

Integrated Analysis and Forecasting, and Michael Schaal (michael.schaal@eia.doe.gov, 202/586-

5590), Director of the Oil and Gas Division in the Office of Integrated Analysis and Forecasting. 

Specific questions regarding Alaska resources and production can be directed to Philip Budzik 

(philip.budzik@eia.doe.gov, 202/586-2847). 

For ordering information and questions on other energy statistics available from EIA, please 

contact EIA’s National Energy Information Center at: 

National Energy Information Center, EI 30 

Energy Information Administration 

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 Washington, DC 20585 

 

 Telephone: 202/586-8800 

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FTP Site: ftp://ftp.eia.doe.gov/

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge ii 
Preface 

On December 6, 2007, Senator Ted Stevens requested that the Energy Information 

Administration (EIA) provide an assessment of Federal oil and natural gas leasing in the coastal 

plain of the Arctic National Wildlife Refuge (ANWR) in Alaska (Appendix A). This report 

responds to that request. 

The legislation that established EIA in 1977 vested the organization with a degree of statutory 

independence. EIA does not take positions on policy questions. It is the responsibility of EIA to 

provide timely, high-quality information and to prepare objective, credible analyses for use by 

the Congress, the Administration, and the public. This report should not be construed as 

representing the official position of the U.S. Department of Energy or the Administration. 

The projections in the reference case used in this report are not statements of what will happen 

but of what might happen, given the assumptions and methodologies used. The reference case 

projections are business-as-usual trend forecasts, given known technology, technological and 

demographic trends, and current laws and regulations. Thus, they provide a policy-neutral 

starting point that can be used to analyze policy initiatives. EIA does not propose, advocate, or 

speculate on future legislative and regulatory changes. All laws are assumed to remain as 

currently enacted; however, the impacts of scheduled regulatory changes, when defined, are 

reflected. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge iii 
Table of Contents 

Contacts........................................................................................................................................... ii 

Preface............................................................................................................................................iii 

Table of Contents........................................................................................................................... iv 

Introduction..................................................................................................................................... v 

Summary........................................................................................................................................ vi 

Background..................................................................................................................................... 1 

Methodology and Assumptions...................................................................................................... 2 

Timing of First Production...................................................................................................... 3 

Timing of Continuing Development....................................................................................... 4 

Field Size Distributions........................................................................................................... 4 

Production Profiles.................................................................................................................. 5 

Current Oil Market Conditions............................................................................................... 6 

Results............................................................................................................................................. 8 

ANWR Production Uncertainties ................................................................................................. 15 

Appendix A: Request Letter from Alaska Senator Ted Stevens.................................................. 16 

Tables

Table 1. Oil Field Sizes and Their Date of Initial Production for the Three ANWR Resource 

Cases....................................................................................................................................... 5 

Table 2. Liquid Fuels Supply Impact of Opening ANWR 1002 Area to Petroleum Development 

under Three Oil Resource Cases........................................................................................... 10 

Figures 

Figure 1. Map of Northern Alaska Showing ANWR and the Coastal Plain 1002 Area................ 1 

Figure 2. Domestic Crude Oil Production for the AEO2008 Reference Case and the Three 

ANWR Resource Cases, 2005-2030....................................................................................... 9 

Figure 3. Net Import Share of Liquid Fuels Consumed in the United States for the AEO2008 

Reference Case and the Three ANWR Resource Cases, 2015-2030 (percent) .................... 13 

Figure 4. Net Expenditures for Crude Oil and Liquid Fuel Imports for the AEO2008 Reference 

Case and the Three ANWR Resource Cases, 2015–2030 .................................................... 14 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge iv 
Introduction 

On December 6, 2007, Senator Ted Stevens requested that the Energy Information 

Administration (EIA) provide an assessment of Federal oil and natural gas leasing in the coastal 

plain of the Arctic National Wildlife Refuge (ANWR) in Alaska (Appendix A). In his request, 

Senator Stevens said that the analysis should develop “plausible scenarios for development of the 

Coast Plain consistent with the most recent USGS resource assessments and oil price situation.” 

Senator Stevens also requested that the new EIA analysis be based on the approach developed in 

EIA’s 2000 Service Report entitled Potential Oil Production from the Coastal Plain of the Arctic 

National Wildlife Refuge.

1

 This analysis assumes that the authorization for Federal oil and 

natural gas leasing occurs during 2008.

This analysis presents three ANWR cases that assess the potential impact of oil and natural gas 

leasing in the 1002 Area of ANWR.2

 These ANWR cases represent the following potential oil 

resource levels: 

• A mean oil resource case, which is based on the U.S. Geological Survey (USGS) mean 

probability estimate3

 of technically recoverable oil resources in the 1002 Area of 

ANWR; 

• A low oil resource case, which is based on the USGS 95-percent probability estimate of 

technically recoverable oil resources in the 1002 Area of ANWR; and 

• A high oil resource case, which is based on the USGS 5-percent probability estimate of 

technically recoverable oil resources in the 1002 Area of ANWR. 

These three ANWR scenarios are compared to the Annual Energy Outlook 2008 (AEO2008) 

reference case,4

 which serves as the analytical baseline for this report. A similar analysis was 

requested by then-Chairman Richard W. Pombo in a February 23, 2004, letter to EIA.5

 

1

 Energy Information Administration, Potential Oil Production from the Coastal Plain of the Arctic National 

Wildlife Refuge: Updated Assessment, SR/O&G/2000-02 (Washington, DC, May 2000) web site 

www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/arctic_national_wildlife_refuge/html/summary.html. 2

 The 1002 Area refers to the coastal plain of ANWR, which is roughly north of the Sadlerochit Mountains and west 

of the Aichilik River. 

3

 The mean probability estimate refers to a 1-in-2 chance of there being oil resources at least equal to the size of that 

estimate; the 95-percent probability estimate refers to a 19-in-20 chance of there being oil resources at least equal to 

the size of that estimate; and the 5-percent probability estimate refers to a 1-in-20 chance of there being oil resources 

at least equal to the size of that estimate. 

4

 Energy Information Administration, Annual Energy Outlook 2008, DOE/EIA-0383(2008) (Washington, DC, May 

2008) web site www.eia.doe.gov/oiaf/aeo/index.html. 5

 Energy Information Administration, Analysis of Oil and Gas Production in the Arctic National Wildlife Refuge, 

SR/OIAF/2004-04 (Washington, DC, March 2004) web site 

www.eia.doe.gov/oiaf/servicerpt/ogp/pdf/sroiaf(2004)04.pdf. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge v 
Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge vi 

Summary 

The opening of the ANWR 1002 Area to oil and natural gas development is projected to increase 

domestic crude oil production starting in 2018. In the mean ANWR oil resource case, additional 

oil production resulting from the opening of ANWR reaches 780,000 barrels per day in 2027 and 

then declines to 710,000 barrels per day in 2030. In the low and high ANWR oil resource cases, 

additional oil production resulting from the opening of ANWR peaks in 2028 at 510,000 and 

1.45 million barrels per day, respectively. Between 2018 and 2030, cumulative additional oil 

production is 2.6 billion barrels for the mean oil resource case, while the low and high resource 

cases project a cumulative additional oil production of 1.9 and 4.3 billion barrels, respectively. 

 

Crude oil imports are projected to decline by about one barrel for every barrel of ANWR oil 

production. Opening ANWR results in the lowest oil import dependency levels during the 2022 

through 2026 time frame, when oil import dependency falls to the minimum values of 46 and 49 

percent for the high and low oil resource cases, respectively. During that timeframe, the mean 

resource case and AEO2008 reference case project an average oil import dependency of 48 and 

51 percent, respectively. Because ANWR oil production is declining after 2028, U.S. oil 

dependency rises to 51 percent in 2030 in the mean resource case, compared to 54 percent in the 

AEO2008 reference case. The high and low resource cases project a 2030 oil import dependency 

of 48 percent and 52 percent, respectively. 

Additional oil production resulting from the opening of ANWR improves the U.S. balance of 

trade. Cumulative expenditures on foreign crude oil and liquid fuels between 2018 and 2030 are 

reduced by $202 billion dollars (2006 dollars) in the mean oil resource case and reduced by $135 

and $327 billion dollars in the low and high oil resource cases, respectively. 

Additional oil production resulting from the opening of ANWR would be only a small portion of 

total world oil production, and would likely be offset in part by somewhat lower production 

outside the United States. The opening of ANWR is projected to have its largest oil price 

reduction impacts as follows: a reduction in low-sulfur, light crude oil prices of $0.41 per barrel 

(2006 dollars) in 2026 for the low oil resource case, $0.75 per barrel in 2025 for the mean oil 

resource case, and $1.44 per barrel in 2027 for the high oil resource case, relative to the reference 

case. 
Background 

Federal law currently prohibits oil and natural gas development in ANWR. ANWR is located on 

the northern coast of Alaska due east of both Prudhoe Bay, the largest oil field ever discovered in 

the United States, and the National Petroleum Reserve-Alaska (NPRA) (Figure 1). In 1998, the 

USGS estimated that between 5.7 and 16.0 billion barrels of technically recoverable oil1

 are in 

the coastal plain area of ANWR (also referred to as the 1002 Area), with a mean estimate of 10.4 

billion barrels, of which 7.7 billion barrels falls within the Federal portion of the ANWR 1002 

Area.2

 In comparison, the estimated volume of undiscovered, technically recoverable oil in the 

rest of the United States is about 120 billion barrels.3

 

Figure 1. Map of Northern Alaska Showing ANWR and the Coastal Plain 1002 Area 

Source: United States Geological Survey. 

In developing ANWR’s technically recoverable oil resources, the USGS estimated both the 

original-oil-in-place (OOIP) volumes and the recovery factors for those volumes. This 

additional information is important for analyses of very long-term issues, such as discussions 

surrounding the peaking of world oil supply, where the recovery factors implicit in an estimate of 

 

1

 Technically recoverable resources are resources that can be produced using current technology. 

2

 U.S. Department of Interior, U.S. Geological Survey, The Oil and Gas Resource Potential of the Arctic National 

Wildlife Refuge 1002 Area, Alaska, Open File Report 98-34, 1999; U.S. Geological Survey, USGS Fact Sheet FS028-01, April 2001; and, Oil and Gas Resources of the Arctic Alaska Petroleum Province, by David W. 

Houseknecht and Kenneth J. Bird, U.S. Geological Survey Professional Paper 1732–A, 2005.

3

 U.S. Department of Interior, Minerals Management Service, Assessment of Undiscovered Technically Recoverable 

Oil and Gas Resources of the Nation’s Outer Continental Shelf, 2006, MMS Fact Sheet RED-2006-01b, February, 

2006; and U.S. Geological Survey, USGS National Assessment of Oil and Gas Resources Update, USGS website: 

http://certmapper.cr.usgs.gov/data/noga00/natl/tabular/2007/

summary_07.pdf, December 2007. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 1
technically recoverable resources may be significantly changed by price and technology 

developments over time. However, for the present analysis, which focuses on production 

profiles over the next two decades, the technically recoverable resource estimates provided by 

USGS provide a reasonable starting point. 

For the purposes of this analysis, any reference to ANWR pertains to all Federal, State, and 

Native lands within and adjacent to the 1002 Area. Both the State officials and Native 

corporations have expressed a strong interest in developing their respective oil resources, which 

are legally and/or economically linked to a Congressional decision to allow development in 

ANWR, as discussed in EIA’s 2004 report.4

 

ANWR was created by the Alaska National Interest Lands Conservation Act (ANILCA) in 1980. 

Section 1002 of ANILCA deferred a decision on the management of oil and natural gas 

exploration and development of 1.5 million acres of potentially productive lands in the coastal 

plain of ANWR. The coastal plain area represents about 8 percent of the total area of ANWR. 

The USGS estimates that 74 percent of the oil resources in ANWR’s coastal plain area are on 

Federal lands, with the remaining 26 percent on State and Native lands. 

To date, there has been no assessment of the oil and natural gas resources in the rest of ANWR 

outside of the coastal plain area. However, it is unlikely that the non-coastal plain area of ANWR 

has the same level of resources that are estimated to be in the coastal plain area, due to 

differences in geology. 

Methodology and Assumptions 

The effects of opening the coastal plain area of ANWR were determined by incorporating the 

ANWR region into the National Energy Modeling System (NEMS).5 The key assumptions 

required to project crude oil production from the coastal plain of ANWR include: 

• timing of first production, 

• timing of continuing development, 

• field size distributions, 

• production profiles, and 

• current oil market conditions. 

 

4

 Energy Information Administration, Analysis of Oil and Gas Production in the Arctic National Wildlife Refuge, 

SR/OIAF/2004-04 (Washington, DC, March 2004) web site www.eia.doe.gov/oiaf/servicerpt/ogp/pdf/sroiaf

(2004)04.pdf. 5 Energy Information Administration, The National Energy Modeling System: An Overview, DOE/EIA-0581(2003) 

(Washington, DC, March 2003) web site www.eia.doe.gov/oiaf/aeo/overview/index.html. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 2
Timing of First Production 

At the present time, there has been no crude oil production in the ANWR coastal plain region. 

This analysis assumes that enactment of the legislation in 2008 would result in first production 

from the ANWR area in 10 years, i.e., 2018. 

The primary constraints to a rapid development of ANWR oil resources are the limited weather 

“windows” for collecting seismic data and drilling wells (a 3-to-4 month winter window) and for 

ocean barging of heavy infrastructure equipment to the well site (a 2-to-3 month summer 

window). 

The assumption that ANWR oil production would begin 10 years after legislation approves the 

Federal oil and natural gas leasing in the 1002 Area is based on the following 8-to-12 year 

timeline: 

• 2 to 3 years to obtain leases, including the development of a U.S. Bureau of Land 

Management (BLM) leasing program, which includes approval of an Environmental 

Impact Statement, the collection and analysis of seismic data, and the auction and award 

of leases. 

• 2 to 3 years to drill a single exploratory well. Exploratory wells are slower to drill 

because geophysical data are collected during drilling, e.g., rock cores and well logs. 

Typically, Alaska North Slope exploration wells take two full winter seasons to reach the 

desired depth. 

• 1 to 2 years to develop a production development plan and obtain BLM approval for that 

plan, if a commercial oil reservoir is discovered. Considerably more time could be 

required if the discovered oil reservoir is very deep, is filled with heavy oil, or is highly 

faulted. The petroleum company might have to collect more seismic data or drill 

delineation wells to confirm that the deposit is commercial. 

• 3 to 4 years to construct the feeder pipelines; to fabricate oil separation and treatment 

plants, and transport them up from the lower-48 States to the North Slope by ocean barge; 

construct drilling pads; drill to depth; and complete the wells.

The 10-year timeline for developing ANWR petroleum resources assumes that there is no 

protracted legal battle in approving the BLM’s draft Environmental Impact Statement, the 

BLM’s approval to collect seismic data, or the BLM’s approval of a specific lease-development 

proposal. 

The Alaska North Slope Badami and Alpine oil fields are recent examples of how long it might 

take to develop new ANWR oil fields. Located near the western border of ANWR, on State 

lands, the Badami field was discovered in 1990 and went into production in 1998, thereby taking 

8 years between the oil discovery and initial production.6

 On the western border of the State 

 

6

 Alaska Department of Natural Resources, Division of Oil and Gas, 2002 Report: Tables & Graphs Edition, pages 

1-27 and 2-4. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 3
lands, near the National Petroleum Reserve-Alaska, the Alpine field was discovered in 1994 and 

initial oil production occurred in 2000, thereby taking 6 years from discovery.7

 These Alaska 

North Slope oil field development time delays do not include the time delays associated with 

BLM leasing, the collection and interpretation of seismic data, and the drilling of exploratory 

wells. 

Timing of Continuing Development 

This analysis assumes that much of the oil resources in ANWR, like the other oil resources on 

Alaska's North Slope, could be profitably developed given the current levels of technology and at 

current and projected oil prices. This analysis also assumes that new fields in ANWR will begin 

development 2 years after a prior ANWR field begins oil production. 

The decision to use a 2-year time lag in bringing ANWR fields into production is driven by four 

factors. First, there is the large expected size of the ANWR fields, which complicates the 

logistical problems associated with their development. Second, there is considerable investment 

infrastructure required both to begin production in these fields and to link these fields to the 

TransAlaska Pipeline System (TAPS). Third, there is competition in investment and drilling 

resources from other domestic and foreign projects, which potentially limits the resources 

available for ANWR development. Finally, increasing the rate of ANWR development might 

also require an expansion of TAPS throughput capacity. 

This study does not assume that the expected rate of technological change in the oil and natural 

gas industry will affect the rate of development of ANWR. While a higher rate of technological 

development might reduce costs and lead to more efficient development of ANWR resources, the 

primary impediment to the development of ANWR resources is the current legal restriction that 

precludes access to these oil resources. 

Field Size Distributions 

The current analysis uses the USGS assessment of potential field sizes in the coastal plain area, 

based on its assessment of the underlying geology. For the purposes of evaluating the impact of 

opening ANWR for U.S. markets, EIA assumed that State and Native lands within the coastal 

plain of ANWR would be opened for development. In the mean oil resource case, the total 

volume of technically recoverable crude oil projected to be found within the coastal plain area is 

10.4 billion barrels, compared to 5.7 billion barrels for the 95-percent probability estimate, and 

16.0 billion barrels for the 5-percent probability estimate. Because the USGS 5-percent and 95-

percent probability oil resource estimates are asymmetric around the mean estimate, the expected 

field size distribution and, in turn, the distribution of projected oil production are also 

asymmetric with respect to the mean estimate’s field sizes and projected production. 

 

7

 Ibid, pages 1-17 and 2-4. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 4
In the mean oil resource case, the largest projected field in ANWR is nearly 1.4 billion barrels. 

While considerably smaller than the 13.5-billion-barrel Prudhoe Bay field,8

 this would be larger 

than any new domestic onshore field brought into production in decades. Subsequent fields, 

which are developed through 2030 in the mean resource case, are expected to be smaller, with 

two additional fields each with 700 million barrels of oil and four additional fields each with 360 

million barrels of oil (Table 1). To put these field sizes in context with recent North Slope 

Alaska oil discoveries, the Alpine Oil field, the largest field to start producing in recent years, is 

estimated to have 540 million barrels of ultimate recovery.9

Because the larger fields are generally easier to find and cheaper to develop, EIA’s analysis 

assumes that the largest oil fields are developed first. 

Table 1. Oil Field Sizes and Their Date of Initial Production for the Three ANWR 

Resource Cases 

(million barrels) 

Year In Which 

Field Begins 

Production 

Mean Oil Resource 

Case 

Low Oil Resource 

Case 

High Oil Resource 

Case 

2018 1,370 700 2,000 

2020 700 700 1,340 

2022 700 340 1,340 

2024 360 340 700 

2026 360 340 700 

2028 360 340 700 

2030 360 180 700 

Total 4,210 2,940 7,480 

Source: Energy Information Administration, Office of Integrated Analysis and Forecasting. 

Because the USGS assessment of ANWR oil resources has not changed since 2001, the ANWR 

field sizes used in this analysis are the same as those used in EIA’s 2004 ANWR analysis. 

Production Profiles 

Potential production from ANWR fields is based on the size of the field discovered and the 

production profiles of other fields of the same size in Alaska with similar geological 

characteristics. In general, fields are assumed to take 3 to 4 years to reach peak production, 

 

8

 The 13.5 billion barrels of Prudhoe Bay field oil represents the cumulative volume of oil expected to be produced 

from this field over its entire production life. The amount of original-oil-in-place in Prudhoe Bay is estimated to be 

25 billion barrels. Source: U.S. Department of Energy, National Energy Technology Laboratory, Arctic Energy 

Office, Alaska North Slope Oil and Gas, A Promising Future or an Area in Decline? DOE/NETL-2007/1280, 

(Fairbanks, Alaska, August 2007), Table 3.113, page 3-123. 

9

 Ibid, page 3-124. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 5
maintain peak production for 3 to 4 years, and then decline until they are no longer profitable and 

are closed. Identical production profiles were used in the prior EIA report. 

Current Oil Market Conditions 

Alaska North Slope crude oil prices have increased dramatically, rising from $23.62 per barrel in 

2000 to $47.05 per barrel in 2005, a 99 percent increase, and to $63.69 in 2007, a 170 percent 

increase.10 Alaska North Slope oil prices have continued to increase in 2008, in line with other 

crude prices. The price of West Texas Intermediate crude oil, which typically has a price 

premium of $5 to $8 per barrel over Alaska North Slope crude, has recently exceeded $120 per 

barrel. 

Considered in isolation, higher prices alone might raise an expectation of higher ultimate 

recovery from whatever oil resource exists in place.11 Higher prices can motivate efforts to 

increase the recovery factor through more intensive drilling and through the application of 

advanced techniques to increase recovery factors. While the menu of available methods may in 

some cases be limited by the features of the Alaska North Slope environment, for example, 

steam-injection enhanced oil recovery of the near-surface West Sak heavy oil deposits could 

endanger the permafrost, some techniques would likely still be suitable. Higher prices also make 

it more attractive to go after very small fields that are in close proximity to the larger fields that 

are presumed to be the initial development targets. However, as discussed below, the main 

impact of such approaches on the amount of oil actually recovered from ANWR is likely to 

occur after 2030, the current time horizon for EIA analyses. 

As previously noted, there is a strong incentive for serial development of the ANWR resource, 

starting with the largest fields first. As shown in Table 1, the expected size of fields developed 

in each year through 2030 declines over time. Based on the field size distributions provided for 

USGS for each of the resource cases, the expected target field in 2030 is estimated to contain 180 

million barrels of recoverable oil in the low (most unfavorable) resource case and even more oil 

in the other two resource cases. Based on recent development practice, oil fields smaller than 10 

million barrels of recoverable oil that lie in close proximity to existing developed fields in 

Alaska were deemed desirable development targets even when crude oil prices were substantially 

below their current level.12 Oil fields of 180 million barrels in proximity to even larger 

developed fields within ANWR are likely to present attractive development opportunities even at 

prices well below today’s level. Crude oil prices could be a significant factor in determining 

whether much smaller fields within ANWR would also be attractive to develop. However, 

 

10 Energy Information Administration, Petroleum Marketing Monthly, DOE/EIA-0380(2008/05) (Washington, DC, 

May 2008), Table 18, page 43. 

11 The 1998 USGS ANWR assessment assumed an average recovery factor of 37 percent of the original-oil-inplace. This recovery factor is based on primary (pressure-driven) and secondary (water-injection) recovery 

techniques, but does not included tertiary (enhanced oil recovery) techniques, which can increase oil recovery by an 

additional 5 to 15 percentage points. 

12 Examples include the North Prudhoe and West Beach oil fields that are in close proximity to the Prudhoe Bay 

field. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 6
decisions regarding such smaller fields would most likely be taken sometime after 2030, 

affecting production levels only after such fields are actually brought on line. 

A similar timing issue arises with respect to the application of advanced techniques to raise 

ultimate recovery factors in fields of various sizes. With all new fields already assumed to be 

developed in an efficient manner if ANWR resources are opened to leasing and development, 

investments in such techniques would predominantly occur well after fields are first developed. 

While prices can influence decisions regarding the application of advanced techniques, the 

timing of ANWR development is such that the major impact on production from large fields in 

ANWR is not likely to be felt before 2030. However, a more significant impact could be 

realized in later years. 

The increase in drilling costs over time is another important consideration that mitigates against 

an immediate impact of higher oil prices on the production profile following initial development 

in a scenario where ANWR resources are open to leasing and development. For example, the 

American Petroleum Institute’s (API) Joint Association Survey of Drilling Costs (JAS) reports, 

that for the 10,000 to 12,499-foot well-depth interval, the average cost of drilling a domestic13

onshore oil well increased from $111 per foot-drilled in 2000 to $294 per foot-drilled in 2005, a 

165-percent cost increase.14 For the same well-depth interval, Alaska onshore oil well drilling 

costs increased from $283 per foot-drilled in 2000 to $1,880 per foot-drilled in 2005, a 564-

percent cost increase.15 The vast majority of the oil wells drilled in Alaska occur on the North 

Slope. 

These API well drilling cost averages illustrate two aspects of Alaska North Slope oil field 

development costs. First, Alaska oil fields have always been more expensive to develop than 

lower-48 oil fields due to the North Slope’s remote location, harsh winters, and the 

environmental requirement to maintain the permafrost layer. Second, in the current market 

environment, where producers are completing for scarce oil field equipment, drilling rigs, and 

skilled labor, the remoteness of the Alaska North Slope and its limited drilling season works to 

its detriment, causing oil field development costs to increase more than that witnessed in the 

lower-48. In the lower-48, a drilling company might move a land rig only a couple of miles, or 

at most, a couple of hundred miles to another drilling site. In contrast, the deployment of new 

rigs to the Alaska North Slope requires that they be transported many thousands of miles without 

any option for quick redeployment. 

Over the long-term, both lower-48 and Alaska North Slope oil field development costs are 

expected to subside as the supply of drilling rigs, oil field equipment, and skilled labor increases 

to catch up with demand. However, it is unlikely that Alaska North Slope oil field development 

costs will decline to year 2000 levels. 

 

13 Including Alaska. 

14 American Petroleum Institute, Joint Association Survey on Drilling Costs, 2000 and 2005 editions (Washington, 

DC, December 2001 & April 2006), Table 2.12. 

15 Ibid, Table 2.24. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 7
In summary, the basic intuition that higher crude oil prices would likely result in higher ultimate 

recovery from whatever resource exists in place is sound. However, given the timing and cost 

considerations outlined above, EIA does not expect the recent increase in oil prices to affect the 

projected profile of ANWR development and production activities prior to 2030, the end of the 

time horizon for this analysis. Therefore, this current analysis of projected production from 

ANWR through 2030 parallels our prior recent analyses of this topic that have used similar or 

identical information on ANWR resources notwithstanding the recent run-up in world crude oil 

prices. 

Results 

In the AEO2008 reference case, U.S. conventional crude oil production grows from 5.1 million 

barrels per day in 2006 to a peak of 6.3 million barrels per day in 2018, and then declines to 5.6 

million barrels per day in 2030 (Figure 2 and Table 2). The shape of the U.S. production profile 

is largely driven by lower-48 offshore oil production, which rises from 1.4 million barrels per 

day in 2006 to 2.4 million barrels per day in 2015, and then falls to 1.9 million barrels per day in 

2030. Lower-48 onshore oil production grows slightly through 2030 because high crude oil 

prices stimulate the growth in carbon dioxide enhanced oil recovery (EOR) production, which 

offsets the decline in the other lower-48 onshore oil production. 

In the AEO2008 reference case, Alaska crude oil production (without ANWR) declines from 

741,000 barrels per day in 2006 to about 520,000 barrels per day in 2014. After 2014, Alaska oil 

production increases due to the discovery and development of new offshore oil fields that are 

expected to be found off the Alaska North Slope.16 These new fields raise Alaska oil production 

to about 700,000 barrels per day in 2020. After 2020, Alaska oil production declines to about 

300,000 barrels per day in 2030. 

In all three ANWR resource cases, ANWR crude oil production begins in 2018 and grows during 

most of the projection period before production begins to decline. In the mean oil resource case, 

ANWR oil production peaks at 780,000 barrels per day in 2027. The low- resource-case 

production peaks at 510,000 barrels per day in 2028, while the high- resource-case production 

peaks at 1,450,000 barrels per day in 2028. Cumulative oil production resulting from the 

opening of ANWR from 2018 through 2030 amounts to 2.6 billion barrels in the mean resource 

case, 1.9 billion barrels in the low resource case, and 4.3 billion barrels in the high resource case. 

 

16 The U.S. Minerals Management Service (MMS) estimates that approximately 23.6 billion barrels of undiscovered 

technically recoverable oil resources exist in the Beaufort and Chukchi Seas off the North Slope and that 

approximately 19 billion barrels of oil would be economic to produce at $80 per barrel or less. Source: U.S. 

Department of Interior, Minerals Management Service, Undiscovered Oil and Gas Resource, Alaska Federal 

Offshore, as of 2006 (Washington, DC, 2006). 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 8
Figure 2. Domestic Crude Oil Production for the AEO2008 Reference Case and the Three 

ANWR Resource Cases, 2005-2030 

 (million barrels per day) 

Source: National Energy Modeling System runs - aeo2008.d030208f, anwr2008.d031008a, 

anwr2008HRref.d040308c and anwr2008LRref.d040308d 

The opening of ANWR to oil and gas development includes the following impacts: 

• reducing world oil prices, 

• reducing the U.S. dependence on imported foreign oil, 

• improving the U.S. balance of trade, 

• extending the life of TAPS for oil, and 

• increasing U.S. jobs. 

The remainder of this section will focus primarily on the first four impacts, because the 

employment impacts are difficult to determine for oil fields being developed on the Alaska North 

Slope. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 9
Table 2. Liquid Fuels Supply Impact of Opening ANWR 1002 Area to Petroleum 

Development under Three Oil Resource Cases 

(million barrels per day, unless otherwise noted) 

2006 2020 

AEO2008 Mean Oil 

Resource 

Case 

Liquid Fuels Supply Category Reference 

Case 

Low Oil 

Resource 

Case 

High Oil 

Resource 

Case 

LSL Crude Oil Price 

(2006 dollars per barrel) $66.02 $59.70 $59.46 $59.47 $59.39 

U.S. Crude Production 5.1 6.2 6.5 6.5 6.5 

 Lower-48 4.4 5.5 5.5 5.5 5.5

 Alaska 0.7 0.7 0.9 1.0 1.0 

Net Crude Imports 10.1 9.8 9.5 9.5 9.4 

Total Crude Supply 15.2 16.0 16.0 16.0 16.0 

Natural Gas Liquids 1.7 1.7 1.7 1.7 1.7 

Other Inputs 1.4 3.0 3.0 3.0 3.0 

Net Product Imports 2.3 1.4 1.4 1.4 1.4 

Total Primary Supply 20.7 22.0 22.1 22.1 22.1 

Net Import Share of Total Primary 

Supply 60 % 52 % 50 % 50 % 50 % 

Net Expenditures for Crude and 

Product Imports (billion 2006 dollars) $265 $207 $200 $201 $199 

2006 2025 

AEO2008 Mean Oil 

Resource 

Case 

Liquid Fuels Supply Category Reference 

Case 

Low Oil 

Resource 

Case 

High Oil 

Resource 

Case 

LSL Crude Oil Price 

(2006 dollars per barrel) $66.02 $64.49 $63.74 $64.04 $63.13 

U.S. Crude Production 5.1 6.0 6.8 6.5 7.3 

 Lower-48 4.4 5.5 5.5 5.5 5.5 

 Alaska 0.7 0.5 1.3 1.0 1.8 

Net Crude Imports 10.1 10.1 9.5 9.7 9.0 

Total Crude Supply 15.2 16.1 16.3 16.3 16.3 

Natural Gas Liquids 1.7 1.6 1.7 1.6 1.7 

Other Inputs 1.4 3.3 3.3 3.3 3.4 

Net Product Imports 2.3 1.3 1.2 1.2 1.1 

Total Primary Supply 20.7 22.3 22.4 22.4 22.5 

Net Import Share of Total Primary 

Supply 60 % 52 % 48 % 50 % 46 % 

Net Expenditures for Crude and 

Product Imports (billion 2006 dollars) $265 $228 $207 $216 $193 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 10
Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 11

2030 

Liquid Fuels Supply Category 

2006 

AEO2008

Reference 

Case

Mean Oil 

Resource 

Case 

Low Oil 

Resource 

Case 

High Oil 

Resource 

Case 

LSL Crude Oil Price 

(2006 dollars per barrel) $66.02 $70.45 $69.78 $69.95 $69.08 

U.S. Crude Production 5.1 5.6 6.3 6.1 6.9 

 Lower-48 4.4 5.3 5.3 5.3 5.3

 Alaska 0.7 0.3 1.0 0.8 1.7 

Net Crude Imports 10.1 11.0 10.6 10.7 10.0 

Total Crude Supply 15.2 16.6 16.9 16.7 17.0 

Natural Gas Liquids 1.7 1.6 1.6 1.6 1.6 

Other Inputs 1.4 3.4 3.4 3.5 3.4 

Net Product Imports 2.3 1.3 1.1 1.2 1.0 

Total Primary Supply 20.7 22.9 23.0 23.0 23.1 

Net Import Share of Total Primary 

Supply 60 % 54 % 51 % 52 % 48 % 

Net Expenditures for Crude and 

Product Imports (billion 2006 dollars) $265 $262 $241 $248 $223 

Source: National Energy Modeling System runs - aeo2008.d030208f, anwr2008.d031008a, 

anwr2008HRref.d040308c, and anwr2008LRref.d040308d. 

LSL=Low-sulfur, light. 

Note: Totals may not equal the sum of the components due to independent rounding. 

With respect to the world oil price impact, projected ANWR oil production constitutes between 

0.4 and 1.2 percent of total world oil consumption in 2030, based on the low and high resource 

cases, respectively.1

 Consequently, ANWR oil production is not projected to have a large 

impact on world oil prices. Relative to the AEO2008 reference case, ANWR oil production is 

projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, 

light (LSL) crude oil2 prices of $0.41 per barrel (2006 dollars) in 2026 in the low oil resource 

case, $0.75 per barrel in 2025 in the mean oil resource case, and $1.44 per barrel in 2027 in the 

high oil resource case. Assuming that world oil markets continue to work as they do today, the

Organization of Petroleum Exporting Countries (OPEC) could neutralize any potential price 

impact of ANWR oil production by reducing its oil exports by an equal amount. 

 

1

 World oil consumption is projected to be 117.6 millions barrels per day in 2030. Source: Energy Information 

Administration, International Energy Outlook 2007, DOE/EIA-0484(2007) (Washington, DC, May 2007), Table 

A5, page 88, web site www.eia.doe.gov/oiaf/ieo/index.html. 2

 Low-sulfur, light crude oil, such as West Texas Intermediate, is one of the more common price benchmarks used 

for world oil prices. 
High oil prices and high Corporate Average Fuel Economy (CAFE) standards are projected to 

restrain the growth in future U.S. liquid fuels consumption. In the AEO2008 reference case, total 

U.S. liquid fuels consumption grows slowly from 20.7 million barrels per day in 2006 to 22.8 

million barrels per day in 2030. Lower projected U.S. liquid fuels consumption results in 

ANWR oil production causing a larger percentage reduction in future oil and liquid product 

imports than was the case in prior ANWR analyses conducted by EIA. 

Every barrel of ANWR oil production reduces crude oil imports by about a barrel (Figure 3 and 

Table 2). In the AEO2008 reference case, the proportion of crude oil and liquid fuel imports to 

total supply remains relatively constant during the 2018 through 2025 time period at an average 

value of 51 percent. After 2025, reference case oil dependency increases to about 54 percent of 

U.S. liquid fuels supply in 2030. Because U.S. liquid fuels consumption grows slowly during the 

entire projection period, the lowest import dependency levels occur between 2022 and 2026 

across the three resource cases.1

 The mean oil resource case projects a minimum import share of 

48 percent in 2024, before rising to 51 percent in 2030. The low and high resource cases project 

minimum import shares of 49 and 46 percent in 2022 and 2026, respectively. 

The reduction in oil import volumes also reduces the level of expenditures on crude oil and 

liquid fuel imports (Figure 4 and Table 2). In the AEO2008 reference case, high projected oil 

prices cause cumulative net U.S. expenditures on imported oil and liquid fuels to cost about $2.9 

trillion (2006 dollars) between 2018 and 2030. The mean oil resource case reduces this import 

expenditure by $202 billion dollars, or about 7 percent. In the low and high resource cases, 

ANWR oil production reduces cumulative net expenditures on imported crude oil and liquid 

fuels by about $135 to $327 billion (2006 dollars), respectively. As a result, the opening of 

ANWR to Federal oil and natural gas leasing improves the U.S. balance of trade by $135 to $327 

billion during the 2018 through 2030 timeframe, based on the world oil prices projected in the 

AEO2008 reference case. 

The development of ANWR oil resources potentially extends the lifetime operation of TAPS. 

Currently, TAPS is believed to be uneconomic to operate once the oil throughput falls below 

200,000 barrels per day.2

 Although the reference case projects North Slope production to be 

above this minimum level, at about 280,000 barrels per day in 2030, the development of ANWR 

oil resources extends the life of this pipeline well beyond 2030. Greater TAPS throughput also 

reduces oil transportation rates, thereby prolonging the life of existing oil fields and encouraging 

the development of new, small North Slope oil fields. 

 

1

 The maximum volumetric reduction in imports occurs in 2027 and 2028 when ANWR oil production peaks across 

the three cases. 

2

 Petroleum News, TAPS Switches into the 21st century, Volume 12, Number 9, March 4, 2007, pages 9 – 10. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 12
Figure 3. Net Import Share of Liquid Fuels Consumed in the United States for the 

AEO2008 Reference Case and the Three ANWR Resource Cases, 2015-2030 

(percent)

Source: National Energy Modeling System runs - aeo2008.d030208f, anwr2008.d031008a, 

anwr2008HRref.d040308c, and anwr2008LRref.d040308d

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 13
Figure 4. Net Expenditures for Crude Oil and Liquid Fuel Imports for the AEO2008 

Reference Case and the Three ANWR Resource Cases, 2015–2030 

(billions of 2006 dollars) 

Source: National Energy Modeling System runs - aeo2008.d030208f, anwr2008.d031008a, 

anwr2008HRref.d040308c, and anwr2008LRref.d040308d

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 14
ANWR Production Uncertainties 

There is much uncertainty regarding the impact of opening ANWR on U.S. oil production and 

imports, due to several factors: 

• The size of the underlying resource base. There is little direct knowledge regarding the 

petroleum geology of the ANWR region. The USGS oil resource estimates are based 

largely on the oil productivity of geologic formations that exist in the neighboring State 

lands and which continue into ANWR. Consequently, there is considerable uncertainty 

regarding both the size and quality of the oil resources that exist in ANWR. Thus, the 

potential ultimate oil recovery and potential yearly production are highly uncertain. 

• Oil field sizes. The size of the oil fields found in ANWR is one factor that will determine 

the rate at which ANWR oil resources are developed and produced. If the reservoirs are 

larger than expected, then production would be greater in the 2018 through 2025 

timeframe. Similarly, if the reservoirs are smaller than expected, then production would 

be less. 

• The quality of the oil and the characteristics of the oil reservoirs. Oil field production 

rates are also determined by the quality of oil found, e.g., viscosity and paraffin content, 

and the field’s reservoir characteristics, i.e., its depth, permeability, faulting, and water 

saturation. This analysis assumes oil quality and reservoir characteristics similar to those 

associated with the Prudhoe Bay field. If, for example, the oil discovered in ANWR has 

a considerably higher viscosity than the Prudhoe Bay field oil, e.g., over 10,000 

centipoise, then oil production rates would be lower than projected in this analysis. 

• Environmental considerations. Environmental restrictions could affect access for 

exploration and development. Also, legal challenges to the BLM’s leasing program and 

to its approval of seismic data collection and of specific oil field projects could 

significantly delay ANWR oil development and production. 

Although there is considerable uncertainty regarding future ANWR oil production, the 

current upper limit to ANWR oil production is the transportation capacity of TAPS. TAPS 

has maximum throughput capacity of 2.136 million barrels per day. 3

 The high ANWR oil 

resource case comes closest to reaching this pipeline capacity, when total North Slope oil 

production peaks at 1.9 million barrels per day in 2026. 

 

 

3

 Alyeska Pipeline Service Co. web site www.alyeska-pipe.com/PipelineFacts/PipelineOperations.html. 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 15
Appendix A: Request Letter from Alaska Senator Ted Stevens 

Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 16
Energy Information Administration/Analysis of Crude Oil Production in the Arctic National Wildlife Refuge 17