Shell Oil received a permit from the Department of Interior to drill at the Chukcki Sea, which is located northwest of Alaska and south of the Arctic. Amid the controversy of Shell’s presence in the Arctic is the concern of a potential oil spill.
Shell is no stranger to the Chukcki Sea. In 1988, the firm spent $300 million to drill for oil only to find dry holes.
Today Shell’s technology is more advanced, although risks still remain. A report by the Department of Interior—specifically the Bureau of Ocean Energy Management—found a 75 percent chance of a large oil spill in the Arctic should drilling occur.
The search for oil in the Arctic is not new and is viewed as a necessity by the oil industry. According to the U.S. Geological Service, there are potentially 90 billion barrels of oil under the Arctic ice. The National Petroleum Council, comprised mostly of oil and gas companies, released a report earlier this year highlighted the usefulness of depending on Arctic oil:
Arctic exploration today may provide a material impact to U.S. oil production in the future, potentially averting decline, improving U.S. energy security, and benefiting the local and overall U.S. economy.
Erik Milito, director of upstream at the oil industry-funded American Petroleum Institute, argued on behalf of Arctic drilling as essential for U.S. energy security:
The safe and responsible development of oil and natural gas in the Arctic is critical to our economy and national security…Failure to develop these resources would put America’s global energy leadership at risk at a time when Russia and other Arctic nations are forging ahead.
Although, a 2012 report co-written by API’s Arctic Oil Spill task force found, in spite of some advantages, “logistical challenges” in responding to an oil spill.
John Deans, a Greenpeace Arctic campaigner specialist, told Firedoglake an oil spill in the Arctic would be a “catastrophe.” Moreover, he said risky extractions, such as tar sands, are slightly similar to drilling in the Arctic, yet the latter carries more risks.
“With the Arctic, it is another extreme extraction. The environmental risks are so much higher and difficult to deal with,” Deans said.
Shell Oil did not respond to inquiries from Firedoglake about oil spill concerns.
Skuld, a maritime insurance firm, recently told World Maritime News how it was concerned about oil spill risks in the Arctic and, as a result, massive economic costs. In fact, they believed a Deepwater Horizon spill disaster—where nearly 1,000,000 million gallons of oil spilled in the Gulf of Mexico in 2010—may happen in the Arctic with higher clean-up costs:
We know the potential cost of incidents will almost certainly be significantly higher than similar events in warmer climes, but we do not know by how much more. Worse, perhaps, we have no statistics that point to the likely frequency of loss events in Arctic waters, either absolutely or relative to elsewhere
John McCannon, a professor at Southern New Hampshire University, highlighted how oil and gas companies under-estimate the difficulties with a clean up of a potential oil spill in History of the Arctic: Nature, Exploration and Exploitation:
Such breezy assurances [by oil companies] fly not just in the face of experience, but of major feasibility studies which strongly indicate that, in oil-rich but ice-clogged seas like the Beaufort, Chukchi, Kara and Barents, the chances of successful emergency rescue or cleanup for rigs and drills beyond a certain distance or depth are virtually nil – and that, over time, the chances of a blowout or the ice-ramming of a rig or drilling ship are unacceptably high.
A significant issue affecting the Arctic is climate change. There is less sea ice in the Arctic now than in 1979. With climate change seen as “inevitable” by the Intergovernmental Panel on Climate Change, it may lead more changes for the Arctic.
As McCannon writes in his book, “the warmer the Arctic gets, the warmer it will keep becoming.” In fact, McCannon cites the damage done to the Arctic, mostly due to industrialization, as “Arcticide.” Such changes to the Arctic, as he points out, would trickle-down to the rest of humanity:
If even a fraction of what scientists predict about unchecked Arctic warming turns out to be correct, the choice may well come down to one of survival: not necessarily of humanity itself, but of the favourable climatological conditions that human populations in the middle latitudes have enjoyed for many centuries.
Deans noted other oil firms were more wary than envious in regards to Shell’s presence in the Arctic.
“Other companies are definitely watching and Shell is definitely on the global stage right now. Although, other oil companies are viewing this with skepticism,” Deans said.
As a result of the low oil prices, companies are scaling back its investments as there is oversupply of oil and low demand. Royal Dutch Shell, which Shell Oil derives from, will cut 6,500 jobs because of low oil prices. The firm still views, as Chief Executive Ben van Beurden placed it, Alaska as “long-term play.”
Deans believes Shell is continuing its project because “pride is leading their judgment.”
“They’re not Arctic-ready, but they really want people to believe they can do this,” Deans said.
Deans, additionally, criticized the Obama administration for giving permits to Shell Oil in spite of the consequences.
“This doesn’t have to happen. They have consistently, against all sound advice, given Shell permits,” Deans said.
Deans stressed how pressure against government officials can be effective in stopping Arctic drilling.
“It’s important people take action anywhere by contacting the Obama administration, their Senators, their Representatives. They all have the ability to take action on it,” Deans said.