U.S. Arctic Development Benefits All Americans

August 21, 2015 in Blog

Developing America’s oil and gas resources in the Arctic benefits Alaska and the entire nation.

 Significant energy resources to power America

  • 84% of the undiscovered oil and gas resources in the Arctic are in offshore areas.
  • The U.S. Arctic is estimated to hold 34 billion barrels of oil and 60 billion barrels of oil equivalent of natural gas.
  • 64% of the conventional resources in the U.S. Arctic are offshore.
  • U.S. oil potential in the Arctic represents about 15 years of U.S. net oil imports.

Energy production is critical to Alaska’s economy

  • Oil and gas is Alaska’s largest non-governmental industry.
  • In 2013, the industry accounted for 33 percent of all wage and salary employment in Alaska (111,000 out of a total of 335,000) and 38 percent of all wages ($6.45 billion in wages out of total of $17.1 billion).
  • Oil and gas taxes provide about 90% of Alaska’s general revenue.

Arctic energy has been a pillar of American energy security for decades.

  • Prudhoe Bay, North America’s largest oilfield, was discovered in the 1968.
  • The Prudhoe Bay discovery gave birth to the Trans Alaska Pipeline System (TAPS), allowing Arctic energy resources to benefit America at large.
  • TAPS has transported over 17 billion barrels of oil and natural gas liquids since June 1977, and throughput peaked at 2.2 million barrels of oil per day – 25% of U.S. domestic production – in the late 1980s.
  • TAPS throughput has dropped as oil production in Alaska has fallen, and it is now over two-thirds empty and declining at an average rate of 6% every year.
  • In 2014, TAPS transported an of 500,000 barrels of oil per day, a mere fraction of past volumes.
  • If TAPS throughput continues to fall, the pipeline will be ordered to shut down, forcing U.S. refineries to find more expensive supplies of crude, which would lead to higher gasoline prices.
  • Transporting offshore oil through TAPS would extend the life of this critical piece of infrastructure; create new jobs, while increasing state revenues by $1.2 billion.

Arctic offshore development & Alaska’s economy

Developing Alaska’s offshore continental shelf areas is estimated to generate over a 50-year period (in 2007 dollars):

  • An annual average of 35,000 jobs in Alaska;
  • Total estimated payroll of $72 billion;
  • $15 billion in potential revenues to the State of Alaska; and
  • $4 billion in property taxes to local governments.

All of America benefits from Arctic energy development

Developing Alaska’s offshore resources is estimated to generate over a 50-year period (in 2010 dollars):

  • An annual average of 54,700 jobs nationwide;
  • Total estimated payroll of $145 billion;
  • $193 billion in government revenues at $65/barrel: $167 billion to the federal government, $26 billion to state and local governments:
  • $97 billion in federal lease revenues; and
  • $51 billion in federal corporate income tax revenue.