EIA estimates (EIA, 2008a) of production rates from access to ANWR-1002 and the OCS showed increased U.S. production—more than the reference-case production of 6.3 and 5.6 million barrels per day—of about 200,000 and 100,000 barrels per day, respectively, in 2020 and about 700,000 and 200,000 barrels per day in 2030 (see Table 7.7). It is important to recognize that these estimated increments reflect both the increased production in the specified areas and the declines in production elsewhere. Mean production estimates cited in the NPC study (NPC, 2007, Topic Paper 7) for the ANWR-1002 area are 539,000 barrels per day in 2020 and 576,000 barrels per day in 2030. EIA estimates made in 2004 (EIA, 2004) showed somewhat larger estimated production for ANWR-1002, with assumed production starting in 2013 and peaking at 874,000 barrels per day in 2024.

While any additional oil production has some impact on oil price, as well as an obvious impact on the amount of oil imported into the United States, most observers have argued that the impact on oil price of net incremental U.S. production due to the opening of restricted areas will be small. Projected total production increases are modest compared to world demand (about 85 million barrels per day at present); they are projected by the EIA to grow to 96 million barrels per day in 2015 and 113 million barrels per day in 2030 (EIA, 2008d).

Oil prices are set in a global market, and both supply and demand depend on price, though supply responds slowly to high prices and demand usually responds faster. Short-term oil price volatility observed in recent months is a reflection of this dynamic, at least in part. But it is not known whether remote or offshore production will compete on costs with other sources of supply around the world, nor whether such resources will be developed in the first place, given the uncertainty as to future oil prices supporting development. As the EIA noted in its analysis of the impact of ANWR-1002 production, “Assuming that world oil markets continue to work as they do today, the Organization of Petroleum Exporting Countries could countermand any potential price impact of ANWR coastal plain production by reducing its exports by an equal amount” (EIA, 2004). Similar reasoning suggests that the impact of increased OCS production on world oil price in the long term would also be small.

It is possible that natural gas markets, which are becoming more global but still maintain regional differences, will respond differently to the potentially higher production quantities, although the magnitude of any response is uncertain (Baker Institute, 2008). The EIA estimates summarized in Table 7.9 suggest that access to restricted OCS, for example, might provide increased gas produc-

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