ANWR job count disputed

Interior Secretary: 700,000 positions would be created

Posted: Wednesday, March 13, 2002

WASHINGTON -- Pitching the president's energy agenda, Interior Secretary Gale Norton told a farm group in Arkansas last week that oil drilling in an Arctic wildlife refuge would produce more than 700,000 jobs.

She also cited the number at stops in Missouri and Indiana -- and has used it in recent months on talk shows, in speeches and in newspaper op-ed articles.

But some independent economists call the figure highly suspect, based on a 12-year-old study using assumptions that may or may not be valid. A separate study for the Energy Department estimates about a third as many jobs. Environmentalists say a more accurate number -- though disputed as well -- would be about 50,000.

Even some drilling supporters say the Norton number is at best a ''high water mark'' guess.

As the Senate prepares in the coming weeks to debate whether to allow oil companies to drill in Alaska's Arctic National Wildlife Refuge, the spin from both sides of the issue has contained distortions ranging from the amount of oil the refuge contains to the likely environmental impact.

But it is the issue of jobs that has resonated most clearly in Congress where the future of ANWR, as the refuge is called, will be decided. Last summer the Teamsters Union dangled a 735,000 jobs number before lawmakers, helping win House passage of an energy bill that includes drilling in the refuge.

Last week, Norton cited the likelihood of ''more than 700,000 jobs'' across the country as she urged approval of ANWR drilling to a business group in South Bend, Ind., in St. Louis and during a stop at the Arkansas Farm Bureau in Little Rock.

The last stop was no coincidence. Sen. Blanche Lincoln of Arkansas is among a handful of Democrats still undecided on the drilling issue.

Norton's spokesman, Mark Pfeifle, said Norton is not alone in using the 700,000 number. Indeed, it has been cited frequently by pro-drilling union leaders and by members of Congress, primarily Republicans, who want the drilling ban lifted.

So where does it come from? And is it reliable?

Norton is relying on ''her discussions with labor leaders,'' said Pfeifle, adding, ''It could possibly be a little bit more or a little bit less.''

The Teamsters cite a 1990 report written by WEFA Group, an economic consulting firm, for the American Petroleum Institute, the oil industry trade group.

But Teamsters lobbyist Jerry Hood said in an interview he now prefers to talk of ''a range'' of anticipated jobs from ANWR development of from 250,000 to 735,000. ''Jobs creation is an art. It's not a science,'' he said.

Hood's lower figure comes from a 1992 study done for the Energy Department by DRI-McGraw Hill, another consulting firm, that projected 222,480 jobs from ANWR drilling.

Pfeifle said he does not know whether Norton has seen the 60-page WEFA report, a copy of which was obtained by The Associated Press. He said he had never heard of the 1992 study for the Energy Department.

The authors of the 1990 WEFA study no longer work at the company, according to a spokesman who acknowledged it was ''a bit out of date.''

''We would not come up with the same numbers today,'' said Mary Novak, an economist and managing director of WEFA's energy programs. Not involved in the 1990 study, she declined to discuss the report in detail.

Some other economists have questioned whether the analysis from 12 years ago -- and the assumptions its authors used -- can provide an accurate forecast of jobs today. The study assumes ANWR development would begin in the late 1990s and peak in 2005.

''The numbers don't make sense. ... They're not even in the ballpark,'' maintains Dean Baker, an economist whose analysis has been cited frequently by environmentalists.

Baker contends that if WEFA's assumptions were changed to reflect current oil markets and more likely ANWR production levels, the job forecast would be no more than 50,000 -- a number dismissed by pro-drilling advocates as unrealistic.

Baker says WEFA used a package of assumptions that deliberately exaggerated the impact of ANWR oil on world markets.

For example, the study assumes ANWR will produce 1.9 million barrels of oil a day and that world production will be no more than 55 million barrels when ANWR production reaches peak levels.

The Energy Department says that level of ANWR production is given a 5 percent chance of probability and critics note world production today already is 77 million barrels a day and will be much higher by the time ANWR begins to produce.

Also, says Baker, the study assumes that other producers will not respond to a decline in oil prices.

Some of these assumptions made more than a decade ago ''are suspect, and you might underline suspect,'' says Robert Ebel, a global energy expert at the Center for Strategic and International Studies, who has no involvement in the ANWR drilling debate.

But John Felmy, chief economist at the American Petroleum Institute, which commissioned the 1990 WEFA study, says it's still valid and its jobs projections shouldn't be discounted. ''There's going to be hundreds of thousands of jobs,'' he says, though predicting no specific number.

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