Arctic drilling sites
November 12, 2010 by drjohnmcgowan
Filed under Green Energy
How darkness, extreme weather and shifting sea ice could delay efforts to stop an oil well blow-out in the Arctic Ocean
Greenland wants $2bn bond from oil firms keen to drill in its Arctic waters
November 11, 2010 by drjohnmcgowan
Filed under Green Energy
Greenland wants upfront payment to cover major oil spills in wake of BP’s Gulf of Mexico disaster
Greenland is demanding that oil companies bidding to drill in huge areas of its Arctic waters each pay an estimated $ 2bn (£1.25bn) upfront “bond” to meet the clean-up costs from any large spill.
The condition, which is thought to be the first of its kind anywhere in the world, will please environmentalists and could encourage other governments to follow suit in the wake of BP’s Gulf of Mexico disaster. Half a dozen energy companies – thought to include Shell, Cairn Energy, Statoil, the Danish companies Dong and Maersk Oil – are in negotiations with the Greenland government about the licensing round, the largest for years.
They are bidding for the right to drill across about 50,000 square kilometres of unexplored waters, much of it in deep water and all in harsh conditions. The government had planned to announce the winners in August, but arguments over the requirement to pay a bond has delayed the process. Intensive negotiations are under way and the winners could be announced as early as next week.
The payment – either in the form of a parent company guarantee for the larger companies or a straight advance – would have to be made once companies were awarded a licence to explore a block. This is despite the fact that actual drilling would not take place for another three or four years because of the mapping and geological preparatory work that would have to be carried out.
Such a requirement could exclude smaller deepwater exploration companies that have less financial clout because they do not bring in their heavyweight partners until they start drilling. Companies that have bigger balance sheets and less deepwater expertise could be favoured in the process. No final decision has been made on the bond payment requirements but it seems likely that it will remain in place, despite some companies’ protests.
Negotiations have been complicated by the unpredictable relationship between Greenland and Denmark. Greenland is a self-governing territory of Denmark, which is responsible for its foreign affairs and must sign off on any oil contracts.
The Greenland licensing round, covering the Baffin Bay area off the west coast, has attracted enormous interest – and controversy. BP withdrew from the bidding in the wake of the Gulf disaster, knowing that it was unlikely to win a block given the environmental and political backlash that would have ensued.
No commercial discoveries of oil or gas have yet been made off the coast of Greenland but the industry expects it is only a matter of time before they strike lucky. In 2008, US scientists released a new estimate of 18bn barrels equivalent of undiscovered oil and gas resources in the Arctic circle between western Greenland and eastern Canada.
The remaining bidders are interested in five huge blocks, each one about 10,000 square kilometres. Greenland is also planning two more licensing rounds in 2012 and 2013, which are also likely to prove hugely popular.
Environmentalists are nervous about plans to open up Arctic seas for oil exploration because the cold conditions would make a spill far more damaging. A report by US government scientists concluded that a quarter of the 4.9m barrels of oil estimated to have been spilled in the warm waters of the Gulf of Mexico has evaporated or been dissolved. Oil spilled in the Arctic would not evaporate and would be far harder to disperse and break down.
Sir Bill Gammell, Cairn’s founder and chairman, has previously said that while drilling off Greenland was expensive, because of the harsh conditions and distances involved, it was like a “treasure hunt” because one discovery there would be likely to lead to many more.
Arctic oil spill plans are ‘thoroughly inadequate’, industry warned
November 11, 2010 by drjohnmcgowan
Filed under Green Energy
Report from US environment group warns that ice, freezing temperatures and high seas would overwhelm any clean-up attempts
The next big offshore oil disaster could take place in the remote Arctic seas where hurricane-force winds, 30ft seas, sub-zero temperatures and winter darkness would overwhelm any clean-up attempts, a new report warns.
With the ban on offshore drilling lifted in the Gulf of Mexico, big oil companies such as Royal Dutch Shell are pressing hard for the Obama administration to grant final approval to Arctic drilling. Shell has invested more than $ 2bn to drill off Alaska’s north coast, and is campaigning to begin next summer.
But the report, Oil spill prevention and response in the US Arctic Ocean, by the Pew Environment Group, warns that oil companies are not ready to deal with a spill, despite the lessons of the BP disaster in the Gulf of Mexico.
“There is a lot of pressure by Shell to drill this summer,” Marilyn Heiman, director of the US Arctic programme at Pew said. “But the oil companies are just not prepared for the Arctic. The spill plans are thoroughly inadequate.”
It took BP three months to bring its ruptured well under control. The former chief executive, Tony Hayward, admitted this week that the company had to improvise its response plan as it went along.
Trying to clean up a spill in the extreme conditions of the Arctic would be on an entirely different order of magnitude. “The risks, difficulties, and unknowns of oil exploration in the Arctic … are far greater than in any other area,” the report said.
The consequences for the Arctic’s environment would be dire, it said, wiping out populations of walrus, seal and polar bear and destroying the isolated indigenous communities that depend on hunting to survive.
Getting to the scene of a spill would be a challenge. The nearest major port, Dutch Harbor, is 1,300 nautical miles away from the drilling areas in the Chukchi and Beaufort seas, and what few air landing strips exist are not connected to any road system. There are no coast guard vessels in either sea, and the nearest coast guard station is 950 miles by air away in Kodiak Alaska.
Response teams would confront gale-force winds, massive blocks of ice and turbulent seas, total darkness for six weeks of the year, and extreme cold. Cranes would freeze and chemical dispersants, such as those used to break up the BP spill, might not work.
Then there is the ice. Left undetected, a pipeline leak could spread oil beneath the surface of sea ice. Ice floes could carry oil hundreds of miles away from the source. At freeze-up, oil can become trapped within ice within the space of four hours, remaining there until spring. If it becomes trapped within multi-year ice, oil could stay in the environment for years, or even a decade, the report said.
Pew and other environment groups this week ramped up their campaigns on offshore drilling, taking out full-page advertisements in gulf newspapers calling on the Senate to pass tougher offshore drilling regulations when it returns for its lame-duck session next week.
An oil spill bill passed in the house last summer, but has stalled in the Senate amid strong objection from the oil industry to provisions that would lift the current $ 75m cap on liability.
There is also increasing concern that the interior secretary, Ken Salazar, will lift the hold placed on Arctic drilling permits after the oil disaster in the gulf.
The report does not call for a complete ban on Arctic drilling, but it recommends far more extensive study of the potential environmental impacts of a spill before industry is allowed to go-ahead. “We need to take a surgical approach and see what areas should and should not be allowed,” said Heiman.
The report also says that any spill response has to be tailored to the extreme Arctic conditions, and that oil companies be required to real-life test runs of their containment efforts.
“We can’t be training them the moment the oil hits the water and the ground like we did in the Gulf,” Heiman said. “There is much more work that needs to be done to protect the Arctic.”
EU clashes with Greenland over international stewardship of Arctic
October 15, 2010 by drjohnmcgowan
Filed under Green Energy
Arctic Council told it is failing to safeguard the region, while EU accused of ‘panic reactions’ over deep-water drilling ban
• Climate change could lead to Arctic conflict, warns senior Nato commander
The European Union has clashed with Greenland and other Arctic nations over their perceived failure to ensure wider international stewardship over the far north.
Diana Wallis, the vice president of the EU, said she could see “people on the streets” protesting if this fragile environment was not seen to be safeguarded properly.
In response, a Greenland foreign minister accused European countries of “panic reactions” in pushing for a deep-water drilling ban after the BP disaster in the Gulf of Mexico.
At a workshop under the aegis of Nato held at Cambridge University, Wallis said she was bored by continuing talk rather than immediate action over wider participation in the Arctic Council.
“It’s got to be widened out. If we don’t do things then people will take to the streets to make sure something is done over climate change,” she argued.
The Arctic Council is largely made up of nations with coastal regions surrounding the north pole, such as Russia, Norway and Greenland. The council is charged with protecting the environment.
Interest in the far north has escalated in recent years since the ice cap started to melt under the impact of global warming. The thaw has triggered a new race for resources with oil companies starting to drill off Greenland, Alaska and elsewhere.
Cairn Energy has increased the excitement off Greenland by announcing two new oil and gas “shows” over the last month.
But with the BP blowout in the Gulf of Mexico fresh in people’s minds, the EU has been pressing for new deep-water drilling bans which could hit Greenland. Inuuteq Holm Olsen, deputy foreign minister in Greenland, told the same Cambridge workshop that he feared “green” concerns were being used by Europe to exercise control over oil operations in his country.
“We welcome focus and attention on environmental issues … What we don’t welcome is the notion that there should not be any industrial development in the name of environmental protection. What the rest of you have been benefiting from should not be denied to us in the Arctic.”
Holm Olsen said a recent German proposal to the Ospar environmental protection treaty was “a not very well thought-out proposal to ban deep-sea drilling which would include north-east Greenland.” Greenland and some other Arctic Council members are suspicious that the EU is using the “green” card in an attempt to muscle in on the growing strategic importance of the far north.
But some academics at the Nato workshop also argued that the Arctic Council was being run as a cosy club for the self-interest of big powers such as Russia. Other delegates at the Nato research workshop dismissed as “media hype” the idea that the new interest in oil, diamonds and fisheries was causing the potential for some kind of new Cold War.
Dr Paul Berkman, from the Scott Polar Institute in Cambridge which was hosting the workshop, said: “In this region, the Cold War has never gone away.”
Climate change could lead to Arctic conflict, warns senior Nato commander
October 11, 2010 by drjohnmcgowan
Filed under Green Energy
Global warming and a race for resources could spark a new ‘cold war’ in the Arctic, US naval admiral warns ahead of key talks on environmental security
One of Nato’s most senior commanders has warned that global warming and a race for resources could lead to conflict in the Arctic.
The comments, by Admiral James G Stavridis, supreme allied commander for Europe, come as Nato countries convene on Wednesday for groundbreaking talks on environmental security in the Arctic Ocean.
The discussions, in the format of a “workshop”, with joint Russian leadership, are an attempt to create dialogue with Moscow aimed at averting a second cold war.
“For now, the disputes in the north have been dealt with peacefully, but climate change could alter the equilibrium over the coming years in the race of temptation for exploitation of more readily accessible natural resources,” said Stavridis.
The US naval admiral believes military forces have an important role to play in the area – but mainly for specialist assistance around commercial and other interests.
“The cascading interests and broad implications stemming from the effects of climate change should cause today’s global leaders to take stock, and unify their efforts to ensure the Arctic remains a zone of co-operation – rather than proceed down the icy slope towards a zone of competition, or worse a zone of conflict,” he added.
Stavridis made his views known in a foreword to a Whitehall paper, entitled Environmental security in the Arctic Ocean: promoting co-operation and preventing conflict, written by Prof Paul Berkman, head of the Arctic Ocean geopolitics programme at the University of Cambridge.
The discussions, which take place at the Scott Polar Institute where Berkman is based, have been given impetus by the speed of change around the north pole where the ice cap is melting and oil and other minerals are becoming available for extraction.
In recent weeks, Cairn Energy has announced the first oil and gas discoveries off Greenland and a wave of new mining licences are about to be awarded there. There are similar moves to produce gas in the far north of Russia and Norway, all in the shadow of BP’s Gulf of Mexico’s oil spill.
Vladimir Putin, the Russian prime minister, spoke about our “common responsibility” at the international forum on the Arctic in Moscow two weeks ago. He is aware the melting ice offers access to reserves of oil and minerals, as well as new shipping lanes, but that the Arctic is an “area for co-operation and dialogue“.
Berkman, a key figure in organising the workshop, with funding from the Nato science for peace and security programme, said the challenge is to balance national and common interests in the Arctic Ocean in the interests of all humankind.
“Strategic long-range ballistic missiles or other such military assets for national security purposes in the Arctic Ocean are no less dangerous today than they were during the cold war. In effect, the cold war never ended in the Arctic Ocean.”
One of the first speakers at the workshop will be Prof Alexander Vylegzhanin, who is codirecting the workshop from the Russian Academy of Sciences. He will be followed by former US ambassador Kenneth Yalowitz; European Union vice-president, Diana Wallis; and Canadian high commissioner, James Wright.
There will also be contributions from senior British, Danish, Finnish, Icelandic and Norwegian delegates with participants from 16 nations.
Building on the interdisciplinary discussions with academics, government administrators, politicians, and industry representatives, Berkman said the workshop should be a major first step towards building a dialogue that both considers strategies to promote co-operation as well as prevent conflict in the Arctic Ocean.
As Stavridis noted: “Melting of the polar ice cap is a global concern because it has the potential to alter the geopolitical balance in the Arctic heretofore frozen in time.”
Vladimir Putin calls for Arctic claims to be resolved under UN law
September 23, 2010 by drjohnmcgowan
Filed under Green Energy
Russian prime minister: “We should maintain the Arctic as a region for peace and co-operation”
Russia’s prime minister, Vladimir Putin, has dismissed claims that the Arctic is a new strategic battleground and called on the world’s five Arctic powers to resolve their rival territorial claims according to international law.
Speaking at the international arctic forum in Moscow, Putin admitted that the Arctic and its oil riches were the subject of competing “geo-political interests” but said that all claims – including Russia’s – should be decided under existing UN rules. “We should maintain the Arctic as a region for peace and co-operation,” Putin declared.
“If you stand alone you can’t survive in the Arctic. Nature makes people and states to help each other.”
His unexpectedly conflict-averse comments come as the Arctic states – Russia, Norway, Canada, Denmark and the US – frantically scramble to assert their legal rights to parts of the Arctic zone.
Underlying the contest is the fact that the region’s huge untapped reserves of gas and oil have become increasingly accessible as the polar ice cap shrinks due to global warming.
Putin admitted the Arctic contained “billions of barrels of oil” but called for the preservation of its “unique nature and fragile ecosystem”. He also announced a major clean-up in Russia’s northern territories of rubbish left behind during communist times. “We have to clean up the mess created over decades and left behind on islands, on airfields in the tundra region and in the waters of the Arctic,” he told the forum.
Despite Putin’s diplomatic calls for “partnership”, Russia is pursuing its own claim to the Arctic’s disputed undersea Lomonosov Ridge. Russia, Canada and Denmark all plan to file separate claims to the UN to show that the underwater mountain range – and its vast oil and mineral deposits – are an extension of their sovereign territory.
Sitting in the front row during the Arctic forum was Artur Chilingarov, a bearded Russian explorer who personifies the Kremlin’s new and gritty Arctic ambitions. After the UN rejected Moscow’s 2001 claim to the Lomonosov Ridge, Chilingarov led a 2007 expedition to the Arctic seabed, on which he deposited a Russian flag using a mini-submarine. An annoyed Canada dismissed Chilingarov’s gesture as a meaningless stunt.
On Wednesday, Chilingarov announced he would head another expedition next month to launch a floating research station in the Arctic. The station – together with an icebreaker and a research ship already in position – would gather fresh scientific evidence to bolster the Kremlin’s claims to the Arctic, which Russia identified two years ago as a “strategic economic resource”.
Putin said that Russia’s history had been intimately linked with Arctic exploration, and claimed that Russian navigators first entered the Arctic seas in the 11th century. He said that 70% of Russia’s vast territory was located in the “northern region”, and that the country had “unique experience” in building major settlements north of the Arctic Circle. He added: “History and geography have placed us with a need to explore the Arctic land, and its northern sea routes.”
The conference has been dubbed “The Arctic: Territory of Dialogue”. It brings together 300 participants, including scientists, environmental campaigners and government Arctic envoys. Despite the collaborative mood, the conference inevitably touched on oil. On Wednesday, Leopold Lobkovsky, vice president of Russia’s Institute of Oceanology, estimated that Russia’s chunk of the Arctic contains 51 billion tonnes of oil and 87 trillion cubic metres of gas. Russia’s current reserves – excluding the Arctic – are put at 10-20 billion tonnes of oil and 47.5 trillion cubic metres of gas.
One Russian expert said that the Kremlin’s policy on the Arctic hadn’t changed much since 1989, when Mikhail Gorbachev asserted Moscow’s peaceful claim to adjacent Arctic territory. “I think you have to get a balance between co-operative behaviour and national interest. It’s a very difficult balance,” said Alexander Pelyasov, director of Russia’s centre of the North and Arctic Economy.
“Unfortunately over the past 20 years we have sometimes gone in this and that direction.”
Putin praised a deal last week between Norway and Russia under which both sides agreed to demarcate their sea borders in the Barents Sea and Arctic Ocean. The deal ended a 40-year dispute. “That was a very good example of how to achieve a compromise acceptable to both sides,” Putin said.
In its annual report released this month, the University of Colorado’s National Snow and Ice Data Center said that Arctic sea ice melted over the summer to cover the third-smallest area on record. It also warned that global warming could leave the region ice-free in the month of September 2030.