Ice camp called way to show US ‘use and presence’ as other nations make claims
By Andrea Shalal-Esa/Reuters 3/25/2011 – Original article here
APPLIED PHYSICS LABORATORY ICE STATION, Arctic Ocean — The United States is staging high-profile submarine exercises in the Arctic Ocean as evidence mounts that global warming will lead to more mining, oil production, shipping and fishing in the world’s last frontier.
Pentagon Comptroller Robert Hale, Navy Secretary Ray Mabus and a Who’s Who of other VIPs braved below-zero temperatures this month to visit a temporary camp on the ice about 150 miles north of Prudhoe Bay, Alaska, where two nuclear-powered U.S. submarines are conducting military training exercises.
“It is important for us to continue to train and operate in the Arctic,” said U.S. Navy Captain Rhett Jaehn, the No. 2 official overseeing U.S. submarine forces.
He said U.S. submarines are a powerful symbol of U.S. military power, and the training was meant to ensure that the United States maintained access to the Arctic, home to the world’s largest undiscovered oil and gas reserves.
“It is a key potential transit line between the Atlantic and the Pacific. We want to be able to demonstrate that we have global reach. That we can operate in all oceans, and that we can operate proficiently in any environment,” Jaehn said.
Russia, the United States, Denmark, Greenland, Canada and Norway, which border the Arctic, and China are already jockeying for position to benefit from new business opportunities there.
Navy scientists predict the Arctic will have one ice-free summer month in about the mid-2030s, and two to three ice-free months by around mid-century. Less ice means the 56-mile wide Bering Strait between Russia and Alaska could one day compete with the Persian Gulf and other shipping lanes because it is as much as 40 percent shorter than conventional routes.
Changing ice conditions in the Arctic are expected to lead to greater commercial traffic, increasing the need for submarine and Coast Guard patrols.
The Navy’s chief oceanographer, Rear Adm. David Titley, who visited the camp last week, said just finding a thick enough multi-year ice sheet to put the camp was difficult this year.
Jaehn is the officer in charge of the temporary ice camp, where more than two dozen Navy officials, researchers, engineers and scientists, and some military officials from Britain and Canada, are facilitating the biannual exercises.
Norway’s Labour-led coalition government is preparing for crisis talks after one of its parties, the Socialist Left (SV), pledged to hold out against oil drilling in the pristine Lofoten region.
The oil industry views the untapped waters around the Lofoten and Vesteraalen islands as one of the best remaining prospects off Norway, the world’s fifth biggest oil exporter, whose output has fallen by a third in the past decade. But Norway’s green and socialist movements oppose oil and gas activities in the region, which is home to Europe’s largest cod stock and unique cold water reefs.
A decision on whether to order an impact assessment study for drilling in Lofoten – the most divisive issue in Norwegian politics – is due within weeks. On March 9, Labour MPs asked Prime Minister Jens Stoltenberg to negotiate a way out of the stalemate with SV, possibly by changing the study’s name or tweaking its scope. But the Socialists rejected this. “We can’t accept any study that leads to opening the region for oil and gas activities,” SV’s energy spokesman Snorre Valen told Reuters. “We simply won’t compromise on this.”
Oil industry pressure
The ruling coalition has survived for six years, partly by delaying decisions on the Lofotens. But pressure from the oil industry, trades unions and some local people is forcing Labour to move on the issue. The SV environment minister Erik Solheim played down the chances of a government collapse to the Aftenposten newspaper.
“The government has for the past six years shown a phenomenal ability to survive. We have like Lazarus risen from the dead, and several times at that,” he was reported saying. Norway’s oil row comes as a report by the US National Academy of Sciences warns of a new struggle for oil and gas resources in the Arctic by 2030. Melting ice cover due to climate change will upset the Arctic power balance and intensify unresolved disputes among countries with Arctic borders. These include Norway, the US, Canada, Denmark, Russia, Iceland, Sweden and Finland.
“The geopolitical situation in the Arctic region has become complex and nuanced, despite the area being essentially ignored since the end of the Cold War,” the study says. It predicts a low chance of conflict but cautions that that “co-operation in the Arctic should not be considered a given even among close allies.”
(EurActiv with Reuters.)
The resource-rich Arctic is becoming increasingly contentious as climate change endangers many species of the region’s flora and fauna but also makes the region more navigable. Up to 25% of the planet’s undiscovered oil and gas could be located there, according to the US Geological Survey.
No country owns the North Pole or the region of the Arctic surrounding it. The surrounding Arctic states of the USA, Canada, Russia, Norway and Denmark (Greenland) have a 200 nautical mile economic zone around their coasts.
In August 2007, a Russian icebreaker reached the North Pole and a Russian mini-submarine planted a titanium Russian flag on the seabed there. The move was widely interpreted as a bellicose claim by Russia to the North Pole seabed and its resources.
Norway covers between 10 and 18% of EU oil demand and about 15% of its natural gas. The country, a member of the European Economic Area since 1994, is the world’s third largest exporter of oil and gas after Saudi Arabia and Russia.
By 2015-2020, natural gas deliveries from Norway to the EU are expected to grow from 85 billion cubic metres to 120 bcm, covering 7-9% of the EU’s entire gas consumption by 2020.
MOSCOW, March 7 (UPI) – original article here
Anglo-Russian energy venture TNK-BP could join Rosneft and Gazprom in developing the Russian arctic shelf if terms are good, the Russian prime minister said.
Russian Prime Minister Vladimir Putin said TNK-BP might be able to persuade its oil and natural gas colleagues to tap into more domestic natural resources if the terms are favorable to all parties involved.
“There is a law, under which we have entrusted Rosneft and Gazprom with work on the shelf,” Putin was quoted by Russia’s official RIA-Novosti news agency as saying. “If TNK-BP offers suitable terms of joint work to one of the companies it can (join the project). Why not?”
TNK-BP, a joint venture between a group of Russian billionaires and BP, is at odds with the British supermajor and Rosneft over an asset swap that included exploration deals in the Russian arctic.
BP in January agreed to pay Rosneft more than $8 billion in shares for a 9.5 percent stake in the Russian energy company in addition to a development agreement for the Kara Sea on Russian’s northern continental shelf.
Putin brushed off the historic rival between TNK-BP and its London counterpart by noting any rivalry is an internal matter for each company to address.
“These are their problems, they must solve them between themselves,” he said.
Norway replaced its oil and energy minister on Friday, appointing a rising politician who is more open than his predecessor to the prospect of drilling in a pristine Arctic archipelago.
Terje Riis-Johansen, who personally opposed drilling in the Lofoten region, resigned after months of criticism of his handling of a costly and delayed carbon capture facility and a plan to build power cable across a scenic fjord.
He was replaced by fellow Centre Party politician Ola Borten Moe, a 34-year-old farmer who is the grandson of former Prime Minister Per Borten and a rising star in Norwegian politics.
The oil industry has said that only by allowing drilling off the Lofoten Islands, a region rich in fish and unique cold-water reefs, can Norway prolong its oil boom as output from North Sea oilfields dwindles.
“Under certain circumstances I would not exclude the opportunity (of drilling in Lofoten),” Moe told Reuters after being presented to the King as the new oil minister.
Norway is the world’s No. 5 oil exporter and No. 2 gas exporter, although its oil output, now about 2 million barrels per day, has dropped by a third since peaking in 2001.
Moe said his position was consistent with the Centre Party view that no formal impact assessment of drilling off the Lofotens should be allowed during this parliamentary term, which ends in 2013.
The Labour-led coalition government is discussing whether to carry out such a study, largely seen as a stepping stone to opening the region for oil exploration.
Moe has said previously three conditions would need to be met for him to support drilling: Norwegian oil firm Statoil would need to show greater efforts on safety and the environment; oil spill preparedness must be improved; and jobs would have to be created in northern Norway region.
Moe told Reuters he was in favour of building gas power plants in Norway, a controversial topic in a Nordic country whose electricity is generated by hydroelectric power, although their emissions should be captured by carbon capture and storage.
Prime Minister Jens Stoltenberg said his government’s energy policy would remain largely unaffected by the minister. “(Moe) stands on the same political foundation as the whole government,” Stoltenberg told Reuters.
“Everyone who is interpreting things should take it easy.”
Aside from environmental controversies, Riis-Johansen has taken heat over revelations that his ministry awarded power generation concessions to two publicly-owned companies that made illegal donations to his agrarian-backed Centre Party.
MOSCOW — The Arctic Ocean is a forbidding place for oil drillers. But that is not stopping Russia from jumping in — or Western oil companies from eagerly following.
Russia, where onshore oil reserves are slowly dwindling, last month signed an Arctic exploration deal with the British petroleum giant BP, whose offshore drilling prospects in the United States were dimmed by the Gulf of Mexico disaster last year. Other Western oil companies, recognizing Moscow’s openness to new ocean drilling, are now having similar discussions with Russia.
New oil from Russia could prove vital to world supplies in coming decades, now that it has surpassed Saudi Arabia as the world’s biggest oil producer, and as long as global demand for oil continues to rise.
But as the offshore Russian efforts proceed, the oil companies will be venturing where other big countries ringing the Arctic Ocean — most notably the United States and Canada — have been wary of letting oil field development proceed, for both safety and environmental reasons.
After the BP accident in the gulf last year highlighted the consequences of a catastrophic ocean spill, American and Canadian regulators focused on the special challenges in the Arctic.
The ice pack and icebergs pose various threats to drilling rigs and crews. And if oil were spilled in the winter, cleanup would take place in the total darkness that engulfs the region during those months.
Earlier this month, Royal Dutch Shell postponed plans for drilling off Alaska’s Arctic coast, as the company continued to face hurdles from wary Washington regulators.
The Russians, who control far more prospective drilling area in the Arctic Ocean than the United States and Canada combined, take a far different view.
As its Siberian oil fields mature, daily output in Russia, without new development, could be reduced by nearly a million barrels by the year 2035, according to the International Energy Agency. With its economy dependent on oil and gas, which make up about 60 percent of all exports, Russia sees little choice but to go offshore — using foreign partners to provide expertise and share the billions of dollars in development costs.
And if anything, the gulf disaster encouraged Russia to push ahead with BP as its first partner. In the view of Russia’s prime minister, Vladimir V. Putin, BP is the safest company to hire for offshore work today, having learned its lesson in the gulf.
“One beaten man is worth two unbeaten men,” Mr. Putin said, citing a Russian proverb, after BP signed its Arctic deal with Rosneft, the Russian state-owned oil company. The joint venture calls for the companies to explore three sections in the Kara Sea, an icebound coastal backwater north of central Russia.
The BP agreement touched off little public reaction in Russia, in part because the environmental movement is weak but also because opposition politicians have no way to block or hinder the process.
The Arctic holds one-fifth of the world’s undiscovered, recoverable oil and natural gas, the United States Geological Survey estimates. According to a 2009 report by the Energy Department, 43 of the 61 significant Arctic oil and gas fields are in Russia. The Russian side of the Arctic is particularly rich in natural gas, while the North American side is richer in oil.
While the United States and Canada balk, other countries are clearing Arctic space for the industry. Norway, which last year settled a territorial dispute with Russia, is preparing to open new Arctic areas for drilling.
Last year Greenland, which became semi-autonomous from Denmark in 2009, allowed Cairn Energy to do some preliminary drilling. Cairn, a Scottish company, is planning four more wells this year, while Exxon Mobil, Chevron and Shell are also expected to drill in the area over the next few years.
But of the five countries with Arctic Ocean coastline, Russia has the most at stake in exploring and developing the region.
“Russia is one of the fundamental building blocks in world oil supply,” said Daniel Yergin, the oil historian and chairman of IHS Cambridge Energy Research Associates. “It has a critical role in the global energy balance. The Arctic will be one of the critical factors in determining how much oil Russia is producing in 15 years and exporting to the rest of the world.”
Following the template of the BP deal, Rosneft is negotiating joint venture agreements with other major oil companies shut out of North America and intent on exploring the Arctic continental shelf off Russia’s northern coast. That includes Shell, its chief executive said last month. Rosneft’s chief executive, Eduard Y. Khudainatov, said other foreign oil company representatives were lining up outside his office these days.
Artur N. Chilingarov, a polar explorer, has embodied Moscow’s sweeping Arctic ambitions ever since he rode in a minisubmarine and placed a Russian flag on the bottom of the ocean under the North Pole, claiming it for Russia, in a 2007 expedition.
“The future is on the shelf,” Mr. Chilingarov, a member of Russia’s Parliament, the Duma, said in an interview. “We already pumped the land dry.”
Russia has been a dominant Arctic oil power since the Soviet Union began making important discoveries in the land-based Tazovskoye field on the shore of the Ob Bay in Siberia in 1962. The United States was not far behind with the discovery of the shallow-water Prudhoe Bay field in Alaska five years later.
What is new is the move offshore.
The waters of the Arctic are particularly perilous for drilling because of the extreme cold, long periods of darkness, dense fogs and hurricane-strength winds. Pervasive ice cover for eight to nine months out of the year can block relief ships in case of a blowout. And, as environmentalists note, whales, polar bears and other species depend on the region’s fragile habitats.
Such concerns have blocked new drilling in Alaska’s Arctic waters since 2003, despite a steep decline in oil production in the state and intensive lobbying by oil companies.
In Canada, Arctic offshore drilling is delayed as the National Energy Board is reviewing its regulations after the gulf spill.
But Russia is pressing ahead. The central decision opening the Russian Arctic easily passed Parliament in 2008, as an amendment to a law on subsoil resources. It allowed the ministry of natural resources to transfer offshore blocks to state-controlled oil companies in a no-bid process that does not involve detailed environmental reviews.
Until recently Russia regarded the Kara Sea, where BP and Rosneft intend to drill, as primarily an icy dump. For years, the Soviet navy released nuclear waste into the sea, including several spent submarine reactors that were dropped overboard at undisclosed locations.
Rosneft executives say their exploration drilling will not stir up radiation.
But in any case, Mr. Chilingarov, the advocate for Russian polar claims, said a little radiation was nothing to worry about. He said that his son was born on Novaya Zemlya, an Arctic testing site for nuclear weapons during the cold war, and is now “a bit taller than me.”
“In small doses,” Mr. Chilingarov said, “radiation is good for growth.”
Andrew E. Kramer reported from Moscow and Clifford Krauss from Houston.
This article has been revised to reflect the following correction:
Correction: February 19, 2011 A chart on Wednesday with an article about Russia’s eagerness to drill for oil in the Arctic Ocean gave an incorrect unit of measurement for estimates of natural gas reserves in the region. The shaded areas in the chart are believed to hold more than 100 trillion cubic feet of natural gas, not cubic tons. The unit of measurement was correct in an online version of the chart, available at nytimes.com/business.
(John Donovan/RoyalDutchShellPLC.com [unaffiliated blog], 27 November 2010) — From a former employee of Shell Oil USA: Latest industry estimates are that the new drilling technologies have given and will give the US about 100 years worth of gas reserves from unconventional ‘tight’ shales, sands, carbonates and hydrocarbon ‘source’ rocks. That is about 2500 trillion cubic feet of natural gas. Actual proven reserves are now about 1/4 to 1/3 that amount. What I find interesting about the gas reserve estimates for both the Chukchi and Beaufort offshore areas is that it does not exceed 25 trillion cubic feet, or about one years worth of domestic US consumption. The question now is : Why do we want to drill for this gas in such a hostile environment now, when we really don’t have any need for the gas? The logic escapes me. Oil reserve estimates for both areas are on the order of 20 billion bbls. While that is a significant amount of oil, not producing it will do nothing to effect the global price of oil, now or in the near future. And it is only about 8 months worth of current global consumption. Alaska’s state budget will be drastically effected because of lost royalty revenues if those reserves are not produced. But so what? There are other areas in the state to drill for oil and gas that are not nearly as environmentally sensitive, or where ‘accidents’ won’t have such a severe environmental impact, such as the National Petroleum Reserve. All things considered, including the off shore operating track record of the major oil companies in far less hostile environments, I think it is best to just sit back and wait awhile before trying to develop oil and gas reserves in the Alaskan Arctic. We can afford to do so. And I see no compelling ‘national security’ need to proceed ahead. Any so-called ‘national security imperative’ that would supposedly require drilling in the off shore Alaskan Arctic is a canard.
An image of a an oil-spill response vessel from a Shell commercial promoting Arctic drilling.
Now that the moratorium on deep-sea oil and gas drilling has been lifted by the Obama administration, the battle for the Arctic is heating up again.
The suspension of deep-sea drilling was of course a reaction to the disastrous blowout in the Gulf of Mexico that gushed from April to July, producing the biggest offshore oil spill in the nation’s history. The moratorium was lifted last month, about six weeks before a Nov. 30 expiration date.
As soon as it was lifted, my colleague Cliff Krauss reported last week, Royal Dutch Shell began lobbying eagerly to get final approval for its long-delayed plans for exploratory drilling in Alaska’s Beaufort Sea. The petro-giant is paying for national advertising as part of a campaign to convince the public and the government that it is taking safety precautions that would prevent the kind of catastrophe that unfolded in the gulf from happening in the Arctic.
Yet the Arctic is well known to be more fragile ecologically than the gulf. And on Thursday, the Pew Environment Group released a detailed report brimming with charts and maps that explores the question of how well the government and industry would be equipped to deal with a blowout and spill there. The report concludes, not so well. And here are some word-for-word highlights on why:
The Arctic Ocean is a unique operating environment, and the characteristics of the Arctic OCS [outer continental shelf] — its remote location, extreme climate and dynamic sea ice—exacerbate the risks and consequences of oil spills while complicating cleanup.
Oil spill contingency plans often underestimate the probability and consequence of catastrophic blowouts, particularly for frontier offshore drilling in the U.S. Arctic Ocean.
The impact of an oil well blowout in the U.S. Arctic Ocean could devastate an already stressed ecosystem, and there is very little baseline science upon which to anticipate the impact or estimate damage.
Oil spill cleanup technologies and systems are unproved in the Arctic Ocean, and recent laboratory and field trials (including the Joint Industry Project) have evaluated only discrete technologies under controlled conditions.
Certain environmental and weather conditions would preclude an oil spill response in the Arctic Ocean, yet an Arctic spill response gap is not incorporated into existing oil spill contingency plans or risk evaluations.
So the researchers concluded that far more study is needed of the Arctic marine ecosystem. Modeling should be devised to project the trajectory of oil flow in sea ice conditions should a spill occur, they added.
And deployment exercises should be conducted to determine how effective a spill response would be in such a remote, sparsely populated region “before introduction of new offshore oil spill risks,” the report said. (The study includes a detailed critique of Shell’s planning scenarios in the Chukchi and Beaufort Seas.)
In other words, the study’s message is that the Arctic is not ready for such deep-sea drilling operations.
Asked about the Pew report’s conclusions, a Shell spokeswoman, Kelly op de Weegh, said in an e-mail that the company had “taken extraordinary steps to compensate for the harsh conditions we expect to encounter in the Arctic, and that is evident in all aspects of our program, including ice management, a commitment to oil spill response and new baseline science.”
“Our Arctic exploration plan has been scrutinized by regulators, stakeholders and the courts, and we look forward to demonstrating once again that we can operate safely and responsibly in the Arctic,” she added.
The study’s conclusion was also disputed by lawmakers who support the drilling. “I disagree with Pew’s insistence on an unspecified moratorium on Arctic development, because the perfect set of conditions simply never occurs,” Senator Mark Begich, Democrat of Alaska, said in a statement. “I’ll continue to push the Obama administration for responsible Arctic development now to help meet America’s energy, national and economic security.”