This addendum responds to a March 21, 2002, request from Senator Frank H. Murkowski for more information from the Energy Information Administration’s Service Report, “The Effects of the Alaska Oil and Natural Gas Provisions of H.R. 4 and S. 1766 on U.S. Energy Markets.” This addendum provides projections on the increase in U.S. oil production, the decease in net petroleum imports, and the change in net petroleum expenditures across a range of cases.

All of the increase in U.S. oil production from opening the Arctic National Wildlife Refuge (ANWR) to oil development comes from increased Alaska production, rather than lower 48 production, regardless of the size of the oil resource assumed to be contained in ANWR. In 2020, the increase in total domestic production ranges from 500,000 barrels per day in the low resource ANWR case to 1.43 million barrels per day in the high resource ANWR case (Table 1A). In 2020, ANWR is projected to increase U.S. oil production by 8.9 percent in the low resource case, compared to 25.4 percent in the high resource case, compared to the Annual Energy Outlook 2002 (AEO2002 ) reference case.

The size of the resource assumed to be in ANWR also has an effect on petroleum import reductions. The larger the ANWR resource base, the greater is the reduction in petroleum imports. In 2020, the reduction in net imports of crude oil and petroleum products is projected to range from 450,000 barrels per day in the low ANWR resource case to 1.39 million barrels per day in the high ANWR resource case, compared to the AEO2002 reference case. More than 80 percent of the import reduction is from lower imports of crude oil, as opposed to product imports.

When combined with a high world oil price path, the opening of ANWR has a similar impact on oil import reductions to the opening of ANWR in a reference case (Table 2A). In the high world oil price cases with mean and high ANWR resources, import reductions in 2020 range from 780,000 to 1.32 million barrels per day more than the high world oil price case without ANWR. In the high ANWR resource case with high world oil prices, oil consumption is reduced by half a million barrels per day and about 70 percent of the import reduction is from lower imports of crude oil.

Reductions in expenditures on imported crude oil and petroleum products range from $5.7 to $16.0 billion compared to the reference case in 2020, depending on the amount of resource in ANWR (in 2000 dollars). Like the volume changes, more than 80 percent of the reduction comes from lower crude oil imports. In the cases which assume the opening of ANWR and high world oil prices, expenditures on oil imports are $11.2 billion to $18.3 billion lower than the high world oil price case without ANWR. The impact on expenditures is greater in the high world oil price cases, because of higher oil prices.

Addendum Tables