The current energy crisis has led to a rise in pro-drilling pressures. Yet, the advantages of increased domestic production can be met through the use of already existing energy efficient technology, which would be more economical (cheaper, maintain competitiveness).

This article asks the question: does drilling for oil in ANWAR (Arctic National Wildlife Refuge) make sense as far as economic vitality, secure supplies, and environmental quality are concerned? Efficient policy should meet at least one of these, but refuge oil doesn’t even do that. ANWAR is not likely to house economically extractable and transportable oil. Even if it were economical enough to drill, it would only provide 1% of the oil needed temporarily and would not be available until a decade from now. Interestingly, the natural gas deposits to which the Bush administration has referred are almost entirely outside of ANWAR land and are currently open to business. But, oil companies know that the cost of the needed pipeline would be an uneconomical $10 billion, and thus have done nothing – they have already made the business decision.

Those who argue that refuge oil is more secure than foreign oil don't take into account the immense cost and risk of transport. All Alaskan oil comes through the Trans-Alaska Pipeline. The Pipeline is extremely difficult to repair. It's indefensible nature also comes into play, as we recall that it has already been bombed twice. As Lovins points out,

Indeed, the pipeline had two accidents last year, and an incident that involved the near explosion of the Valdez oil terminal. Further, refuge oil would start being transported around the end of its originally expected lifetime. Repair costs, needed to fix accelerated corrosion, erosion and stress, would only increase from that point, as would accidents.

Unstable oil prices have in the past lead to new energy policy. The second oil shock of '79 inspired a campaign to increase energy efficiency, which lasted until '85-86. The campaign had lasting effects: cars were 7 mpg more efficient, US oil imports from the Persian Gulf fell 87%, and overall US GDP increased by 27% while total oil imports fell by 42%. This proved that a nation could use efficiency strategies to build insulation from price and quantity changes. The efficiency answer is currently being ignored as policy makers scramble to further secure the US market by encouraging domestic energy production.

ANWAR oil is a poor answer to the policy maker’s quest. The economic success of such ventures would require prices to be so high that they will spur efficiency improvements anyway. American oil is more expensive to extract than international oil and thus, protectionism, trade, or substitution tactics will have to be used. Protectionism, or subsidization of domestic production, is less efficient; taxing imports violates free trade policy. Both decrease competitiveness and answer the problem of decreasing resources by further depletion. Substitution merely involves using other fossil fuels in the place of oil, but these options will eventually (or even not so eventually) be subject to the same ills as oil consumption. Efficiency is the answer. Some analysts argue that if efficiency standards had continued to increase as they did in the early 80s, the US would not need Persian Gulf oil at all by the late 90s.

For ANWAR to be economically viable, it must hold a great deal of oil that will be sold at high price. A U.S. Geological Survey (USGS) in 1998 found that better and cheaper production technologies than those currently used could probably extract 3.2 billion barrels. This oil would mean that the long-term price would need to be at least $22 per barrel for the operation to be economical. But Alaskan oil remained below $13 per barrel throughout the 90s, with the exception of a blip in 2000. In April 2001, Alaska's Department of Revenue forecast a steady price drop back to less than $13 per barrel by 2009-10, which is the earliest that any refuge oil would be available. Some of the latest estimates place 2020 oil at $18 per barrel. Oil companies are currently making decisions based on the belief that long run oil prices are not high enough to expand drilling. During the price blip of the late 90s, oil and gas revenues increased by 50%, yet exploration and development was decreased by 66% in the US and 38% worldwide.

Some advocates of ANWAR drilling argue that new drilling and extraction technology makes ANWAR drilling cheaper, and this is the case. However, it also makes drilling everywhere else cheaper, thus the ability of refuge oil to compete is still low and unchanged. Indeed, one notices that the individuals strongly supporting refuge expansion are not oil company leaders, but high-powered yet ill-informed Alaskan congressmen and oil service companies. Interestingly, these oil service companies would likely be saved by a bailout were the project to go economically awry.

Further, efficient energy use gives after-tax returns up to 100 - 200 percent on investment, and is more efficient in terms of labor power. These economic benefits are topped by the tremendous environmental advantages. However, there is a deep attitudinal disfavor in America currently (illustrated by the more impressive strides for efficiency use elsewhere).

The amount of gasoline ANWAR would produce could easily be saved by just a 0.4 mpg increase in efficiency for light cars. This length of efficiency stride was witnessed every 5 months during '79-80. It is estimated that putting all efficiency strategies available in 1989 to use could save 54 times the estimated amount of oil in ANWAR at one-sixth the cost.