Plenty of politicians are chuffed by the potential in Alaska and off U.S. coasts to boost oil production. Should they be looking even further north—to the Arctic Circle itself?

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Break it up (AP)

The long-awaited study by the U.S. Geological Survey, released yesterday, says there’s probably 90 billion barrels of oil underneath Arctic ice. There’s even more natural gas—though most of that is in Russia. In all, the Arctic has about 20% of the world’s recoverable oil and gas reserves—if recoverable is the right word.

The oil reserves sound pretty big—but they would supply just under three years of global consumption at current rates. Or, twelve years if it all went just for the U.S. The Arctic reserves might bring a little relief to tight markets, but they don’t look like the answer to declining production in oil fields in the rest of the world.

Then there’s the economics. The Arctic isn’t Saudi Arabia, Northern Iraq, or even Libya, where cheap oil practically bubbles to the surface. Most of the recoverable reserves are thousands of feet under the surface. That will take time. From the WSJ today:

“It will not ratchet up global production like a new Saudi Arabia,” said Donald Lee Gautier, a USGS geologist who played a key role in the survey, known as the Circum-Arctic Resource Appraisal. “These are additions that will come over time.”

Starting after about eight years from the first exploration, and lasting for another twenty. That’s the conclusion from a test-run of Arctic oil economics carried out this spring by the U.S.G.S. The upshot? A big, billion-barrel field will cost about $37 per barrel to get out of the ground. That includes all the drilling, facilities, pipelines, and operating costs year after year—and that’s a lot more than it costs to get oil out of the Middle East.

That doesn’t include exploration costs. Even in mature, well-mapped areas like the North Sea, “exploration and appraisal” can tack on about $3 a barrel. So the Arctic—if it is ever tapped—will only be useful if oil stays really expensive. And the Arctic’s oil reserves haven’t been thoroughly explored by oil companies. As the WSJ notes, “[L]arge parts of the Arctic, especially offshore, remain unexplored. Near-permanent sea ice makes it almost impossible to acquire seismic data and drill exploratory wells.”

But burning lots of oil today might make it easier to find even more in the future. From the WSJ:

The Northwest Passage, home to deadly ice floes that can crush ships, was ice-free last summer. Some predict it will turn into a new trade route between Europe and Asia, and a channel that oil companies can use to ferry workers, equipment and supplies around more freely.

So global warming has a silver lining–for somebody, at least.