#9 - Energy development has high opportunity costs.

The United States consumes 20.7 million barrels of petroleum each day. Of that, we import 58 percent, or more than 12.1 million barrels a day. The proven oil reserves in the United States are 21 billion barrels, which would last the U.S. at its current rate of consumption just under three years, if we stopped importing oil tomorrow. While some estimates of the amount of oil under the Arctic National Wildlife Refuge reach up to 16 billion barrels of oil, the U.S. Geological Service says the amount that could be recovered economically is roughly 3.2 billion barrels. That amounts to less than a six-month supply of oil.

To lessen our reliance on foreign oil, there has been a significant push to develop energy reserves in the West. Of the 11 Western states, only six have proven crude oil reserves. Of those, California, with its offshore capacity, has the largest supply available. In the interior West, petroleum reserves are meager. As the table below shows, at current rates of consumption there is less than three and one-half months’ worth of petroleum in the interior West. At rates of consumption predicted for 2025, we would use up these reserves in about 75 days.

What every Westerner must consider when thinking about energy development in the West is whether the benefits exceed the costs. The opportunity cost of developing three and one-half months’ supply of petroleum can include degraded landscapes and wildlife habitat. As shown previously, the long-term trends for resource-dependent communities are not favorable: boom and bust cycles leave communities with few resources once the petroleum has been extracted; they are impacted when world prices change; and resource-industry wages are stagnating.

Finally, it is questionable whether it makes sense to damage the environment for a few months’ worth of oil in today’s economy of footloose businesses, increased retirement income, services-based occupations, and a highly mobile and educated population in search of a high quality of life.