Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth Pack Ice on the Chukchi Sea.Pack Ice on the Chukchi Sea. Photo credit: Don Henise.

Arctic energy development is about being farsighted about America's energy needs in the decades ahead.

A recent National Petroleum Council (NPC) report on the energy development potential of the Arctic, states that the region contains 525 billion barrels of oil equivalent (BBOE).  Thirty-four billion barrels of oil lie beneath the United States' share of the Arctic. According to the NPC report "this represents about 15 years of current U.S. net oil imports."

npc_arctic_energy_potential_800px.jpg National Petroleum Council chart on Arctic energy resources.National Petroleum Council chart on Arctic energy resources.

But as Rex Tillerson, ExxonMobil's CEO, told the AP's Jonathan Fahey developing that energy safely will take decades:

Anytime you are dealing in these frontier areas where you are really driven by technology, these are very long time frames, multi-decade time frames.

The second element is just the enormity of the energy demand in the world. It's between 85 and 90 million barrels of oil per day today. That takes huge resources to supply that in a reliable way.


This will be what's needed next. If we start today it'll take 20, 30, 40 years for those to come on.

This NPC chart walks you through the time line for Arctic energy development, from lease sales to year-round production.

npc_arctic_project_cycles_800px.jpg National Petroleum Council time line on Arctic energy projects.National Petroleum Council time line on Arctic energy projects.

Tillerson went on to explain why these resources will need to be tapped:

Oil demand is going to continue to grow as population grows. If you look out 25 years from now we are going to have another couple of billion people on the planet, we're going to be at 9 billion people. Something like 3 billion people are going to move from poverty into middle class status. When they do that, the energy demand goes up enormously.

As we move out into the middle of this century our outlook shows you are going to need those resources even with a lot of other alternative forms of energy continuing at a fairly aggressive growth rate.

Also, as Gary Litman, vice president for International Strategic Initiatives at the U.S. Chamber reminds us in RealClearPolitics populations both near and far from the Arctic will benefit from responsible energy development:

Oil and gas hidden under the Arctic ice, and the infrastructure that private investment in these fields will bring, are a viable solution to the growing development needs of the northern populations. These are local resources that will contribute tremendously to the local economies. 

Like nurturing the successful shale boom, advancing Arctic energy development is about embracing America's energy abundance. Doing that will enhance our nation's energy security.

Sean Hackbarth EPA Administrator Gina McCarthy.

While EPA Administrator Gina McCarthy said that the Keystone XL pipeline will not doom the environment, she doesn't paint the full picture:

"No, I don't think that any one issue is a disaster for the climate, nor do I think there is one solution for the climate change challenge that we have," McCarthy said during an interview with POLITICO's Mike Allen.

Keystone critics have long alleged that the pipeline, if approved, would greatly exacerbate climate change.

Not only wouldn't the pipeline be a disaster, the State Department's analysis finds that not building it would result in more greenhouse gas emissions.

StateDepartment_KeystoneXL_Alternatives.png Impacts of Keystone XL alternatives [table]Impacts of Keystone XL alternatives [table]

While there are significant job and economic benefits from the pipeline, President Obama has made greenhouse gas emissions a major criteria for his decision. Based on his own State Department's conclusions, he should approve it.

Sean Hackbarth Oil drilling platform being transported to the Gulf of Mexico.Oil drilling platform being transported to the Gulf of Mexico. Photo credit: Eddie Seal/Bloomberg.

Eighty-six percent of offshore energy is off limits from development, and the Interior Department's proposed offshore leasing plan does little to change that.

While the draft plan opens a sliver of the Atlantic coast to development, it's only one lease sale, and there's no guarantee [subscription required] we'll even see it happen, as Interior Secretary Sally Jewell told a House committee:

"So you guarantee that the Atlantic will be part of final version?" [Rep. Doug] Lamborn asked during a hearing of the House Natural Resources Committee, which went on despite the snow falling on D.C.

"No, I can't guarantee anything," Jewell responded. "We are in the draft proposed plan phase and we are taking public comment as is required of us by law."

Today is the deadline to submit comments on Interior's 2017-2022 plan.

The governors of North Carolina, South Carolina, and Virginia are on board with expanding offshore energy exploration. For these states, along with Florida and Georgia, new Atlantic leases will mean jobs, economic growth, and greater state tax revenue.

The plan isn't any better when you look beyond the Atlantic coast. It closes off large chunks of Alaska's coast and continues to seal off the Pacific Coast and the Eastern Gulf of Mexico to new leases.

Karen Harbert, president and CEO of the U.S. Chamber's Institute for 21st Century Energy, has said this plan is a "disconnect between our economy's energy needs and the administration's misguided attempts to meet those needs."

She's right. Unless someone invents some magical new source of energy, oil and natural gas demand will continue for decades. Taking large swaths of the outer continental shelf off the table is simply bad energy policy.  This plan is nowhere near the one needed to meet the needs of America's energy-intensive economy.

Tell the Bureau of Ocean Energy Management we need a better plan.