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Cumulative Environmental Effects of Oil and Gas Activities on Alaska's North Slope (2003) / Chapter Skim
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Appendix J: A Method of Addressing Economic Irreversibility
Pages 242-245

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From page 242...
... The 40 RESOURCE COSTS—ANWR ~ 002 AREA 6 BILLIONS OF BARRELS OF OIL in FIGURE J-1 Summary of the USGS estimates of economically recoverable oil that may occur beneath the federal 1002 Area of the Arctic National Wildlife Refuge. The three curves are based on estimates of economically recoverable oil volumes at the mean expected value, and at the 95% (Fg5)
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From page 243...
... If the chance of persistent collusion is low, a resulting low market pnce of oil will preclude development. Growth of Venezuelan production Pennsylvania oil Boom 1 00 I ~ 901 80 7n 1 an 50 4n an 20 O 243 The second key factor in evaluating development is environmental costs.
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From page 244...
... + P Fee A _ EV(P) expected net present value of oil production in the Arctic National Wildlife Refuge excluding environmental costs; 1- [I = the probability of successful collusion; _ = 0, because competition drives price below $15 per barrel (see text)
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From page 245...
... , the threshold values per family are about $1.89 or $1.15 annually respectively for interest rates of 4% or 12% (Table J-3~. TABLE J-2 Per Family Net Value of Oil Production Arctic National Wildlife Refuge (2011 dollars)
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Key Terms

  • arctic national
  • national wildlife
  • environmental costs
  • oil development
  • extraction period

  • expected net
  • oil production
  • private cost
  • net revenue
  • economically irreversible

  • cost curve
  • net value
  • discount rate
  • lump sum
  • seismic trails

  • economically recoverable
  • recoverable oil
  • irreversible environmental
  • recently spoke
  • low market

  • basically economically
  • competitive fnnge
  • investment projects
  • resulting low
  • gustatory pleasure

  • express expected
  • shorter extraction
  • curve relates
  • latter date
  • usgs estimates


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