The National Petroleum Reserve (near ANWR) doesn't appear as useful for extraction as previously believed. Read about it here at CNN. Related story here (note the last paragraph). History here.
Implications for land rent?
Implications for conservation?
Implications for extraction from other areas?
Will this affect petroleum prices?
Implications for renewable energy policy?
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Implications for land rent?
Will probably decrease drastically given the amount of profits expected to be generated has diminished severely
Implications for conservation?
Locally, it would lower the opportunity costs of using the area for conservation and might work in favour for the preservation lobby.
Implications for extraction from other areas?
This would probably increase the value of other oil reservoirs as scarcity has now increased. This could then alter their rate of extraction as the new value relates to other income-bearing assets. If the increase in value is significant, they may decide to extract slower.
Will this affect petroleum prices?
Increased scarcity, increased prices.
Implications for renewable energy policy?
If prices are to increase on an international scale, they may start to get closer to the costs of renewable energy, making it a more likely substitute good. Giving that the US will now probably have to change their forecasts for oil imports, this would definitely work in the favour for renewables
Implications for renewable energy policy?
Perhaps this revelation will encourage the Congress to extend the current financial subsidies for renewable energy that are set to expire at the end of 2010. Of course, this could easily turn into a partisan battle and end in the expiration of the incentives.
EIA 2008 Study
***corrected post***
Implications for renewable energy policy?
Perhaps this revelation will encourage the Congress to extend the current financial subsidies for renewable energy that are set to expire at the end of 2010. Of course, this could easily turn into a partisan battle and end in the expiration of the incentives.
NASDAQ Article
Will this affect petroleum prices?
Prices may increase, but probably only slightly (a few pennies?)
On a related note, check out this info from a 2008 EIA study concerning the opening of ANWR to oil drilling. The estimated impact on the price of a barrel of oil seems rather negligible, even in the best case (most oil discovered) scenario. It appears the EIA used discounting to get the dollar values.
“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" (6).
EIA 2008 Study
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