By Daniel Whitten
(Bloomberg) — Restrictions on oil and gas drilling will cost the U.S. economy $2.36 trillion through 2029, according to a study requested by state utility regulators and paid for in part by industry-sponsored groups.
Drilling restrictions in Alaska’s Arctic National Wildlife Refuge and off the U.S. coastline are blocking access to about nine years’ worth of U.S. oil and gas consumption, according to the report. Among sponsors are the National Association of Regulatory Utility Commissioners and the industry-funded Gas Technology Institute, of Des Plaines, Illinois.
Former President George W. Bush and Congress ended bans in 2008 on drilling along the U.S. coastline. The Interior Department hasn’t acted to open the newly available areas, including offshore Alaska and on the U.S. Outer Continental Shelf in the Atlantic and Pacific oceans. Congress has kept the Arctic refuge off limits.
“Required actions to access the energy resources thought to exist there have not been taken,” O’Neal Hamilton, a former chairman of South Carolina’s Public Service Commission, said of the areas where leasing hasn’t proceeded. “Our research allows policy makers to know the extent of the resource base and the effects that maintaining the restrictions would have on the country.”
The report, issued today, said opening the areas would free up 43 billion barrels of oil and 286 trillion cubic feet of gas. The U.S. used 22.8 trillion cubic feet of gas and 5.2 billion barrels of oil in 2009, according to a press release issued with the report.
Gas, Oil Prices
Annual average natural-gas prices will increase by 17 percent by 2030 and electricity prices will rise by 5 percent if U.S. policy makers don’t open access to off-limit areas, the report forecast. That would cut the gross domestic product by $2.36 trillion cumulatively through 2029, or 0.52 percent annually on average, according to the report.
Dave Harbour, a retired commissioner of the Regulatory Commission of Alaska, who helped oversee the study, said the calculation of lost GDP was based on the contribution the untapped oil and gas revenues would make to the economy, including employment, taxes and royalties.
Harbour said the industry didn’t influence the outcome of the study, which was performed by McLean, Virginia-based SAIC Corp.