Arctic Snow Job

Arctic Snow Job
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President Donald Trump’s self-congratulatory gloating over the opening of the Arctic National Wildlife Refuge (ANWR) to oil drilling is premature to say the least. Barriers loom in the form of required studies, necessary permits, anticipated litigation, production costs, and oil price uncertainty.

A minimum time frame of six years that all parties agree is needed to bring ANWR oil to market gives opponents of development a significant window of opportunity. They can try to block if not totally reverse the drilling authorization tucked into the recently enacted GOP tax reform bill.

There is good reason why congressional Republicans for 40 years failed 49 times to win industrial access to ANWR. With the disappearance of the Western United States’ massive grasslands, ANWR’s 1.5 million acre coastal plain remains the nation’s last wholly intact wilderness prairie system. It is a cornucopia of biodiversity and serves as the migratory corridor and calving ground for the 197,000 strong porcupine caribou herd. Such conditions have caused ANWR to be dubbed America’s “Serengeti”, a reference to East Africa’s teeming vast savannah.

Environmentalists are not surrendering ANWR without a fight, and they have public opinion on their side. Polls consistently show that a majority of Americans (excluding the royalty-hungry citizens of Alaska) support preservation over development of the Refuge. Although few will ever make the trek to the remote region, just the thought that such a wondrous place exists within the nation’ borders provides existential solace. That public perception is a sleeping giant with the potential to make its political presence felt if sufficiently aroused.

Time-consuming litigation lurks in the face of industry’s entry into the habitat of a threatened species—the polar bear. ANWR’s coastal plain also serves as the calving ground and migratory corridor of the 197,000 strong Porcupine caribou herd. Disrupting such animals is inconsistent with the general statutory mission of national wildlife refuges. That is even more so in the summer when ANWR‘s coastal plain is alive with breathtaking biodiversity. Yet economics dictates that industry could not afford to sit out the summer months and operate solely under winter’s harsh conditions.

If the Democrats should recapture one or both houses of Congress in 2018 or the presidency in 2020, the odds are they would seek to restore ANWR as close to its original state as possible.

And the economics are dicey. In the best of worlds, extracting oil from the Arctic is an extremely expensive proposition, given the challenging weather. Moreover, future oil prices promise to be unpredictable, and not necessarily in a favorable way. The world is moving towards reduced carbon energy usage in response to global warming. Even the major oil companies acknowledge the trend and are gravitating towards alternate energy such as increasingly competitive wind and solar. It is not in a direction conducive to ANWR oil profitability.

There is further potential downward pressure on petroleum prices from the international movement to divest portfolios of oil stocks.

Hence, Trump ought not to be so cocky about ANWR’s desecration. Like most of his triumphant claims, it needs to actually materialize to be believed—and not before.

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