Arctic National Wildlife Refuge

Although no one really knows how much oil may be in Alaska's Arctic National Wildlife Refuge, the Interior Department's oil reserve estimates relied on the best available geologic and geophysical information short of actual drilling data from the refuge. Overall, GAO agrees with Interior that the refuge's coastal plain may contain substantial quantities of oil. This conclusion, however, does not take into account uncertainties in a field's development potential that could arise from variations in future oil prices or costs. Given the uncertainties of future economic variables, such as oil prices and discount rates, GAO believes that Interior should have developed ranges of minimum economic field size estimates for each prospect and then run its model using the derived field sizes. This would have yielded a greater range of values to account for the uncertainty associated with estimating what constitutes an economically viable oil field in the refuge.

GAO found that: (1) although the extent of ANWR oil resources is not known, Interior used the best available geologic and geophysical data in developing its estimate; (2) Interior used generally accepted methodologies to determine that substantial oil reserves could be contained in the ANWR coastal plain; (3) Interior's estimate did not fully account for how future oil prices will affect economically viable quantities of oil; and (4) additional cost factors including oil field size, pipeline transportation, and preventative environmental measures could also affect Interior's estimate.