Royal Dutch Shell announced yesterday that it will not continue its exploratory oil drilling in Alaska's arctic waters during 2013. Instead of continuing to drill, the company will spend the next year in research, repairing damaged drilling units, performing maintenance, and honing its expertise and technology to handle the extremely challenging offshore environment of the Far North.
As well as temperatures far below zero, risks of oil and gas drilling in the Arctic include winds of near-hurricane force, unpredictable ice formation, and white-outs. Darkness also endangers these activities: Barrow, the northernmost point of land in Alaska and the dividing point between the Chukchi and Beaufort Seas, has two to three months between November and January when the sun does not rise at all.
Shell leased Beaufort and Chukchi Sea drilling rights in 2005. The company stressed that its 2012 drilling of a well in each area was completed with no serious injuries or environmental impact. Marvin Odum, Director of Shell Upstream Americas, characterizes the company's Arctic offshore drilling as "a long-term program that the company is pursuing in a safe and measured way."
However, safety remains in the eye of the beholder. An extraordinary diversity of species and habitat and a vibrant, longstanding subsistence culture characterize the Arctic. These require safeguarding. Over a dozen national environmental groups monitor the situation closely, along with state and local organizations. Yet-undiscovered phenomena and climate change are also active factors.
In addition, Shell's performance during the 2012 drilling season, including a grounding and near-grounding of drilling rigs, equipment failures, fire, failure to provide adequate spill response capability, and permit violations, has called into question the company's ability to conduct relatively safe operations. The bottom line for many critics is that there is no proven way to clean up an Arctic spill.
Again from Shell's viewpoint, Alaska's Arctic waters contain twice the prospector/producer's existing oil and gas producing base. They are shallow enough for walrus to hunt on the bottom, depths that make the seafloor relatively accessible. The cost of offshore drilling in the Arctic are now thought to equal or undercut the expense of deepwater ocean mining for oil and gas.
Also, and not inconsequentially, the area attracts petroleum company interest because it involves far less political risk than drilling in the Middle East or South America. The Arctic's eight political regions are stable and the challenging location currently precludes maritime hostilities.
Shell's decision to hold off on 2013 drilling means that no exploration will take place in the American Arctic this year. Both damaged Shell drill rigs are headed for dry dock in Asia for repairs and maintenance. This work may last through the 2013 drilling season, making Shell's announced moratorium a moot point.
ConocoPhillips also holds Arctic oil and gas exploration leases in the Chukchi Sea, but it has no wells planned until 2014. The federal regulator expects more information from ConocoPhillips by the end of March.
Award-winning science writer Sandy Dechert covers developments and environmental issues in conventional, solar, wind, biomass, large and small hydroelectric, and geothermal energy. She detailed events and policy at last fall's 18th UN climate change summit meeting in Doha, Qatar. Sandy has also reported on extreme weather disasters, including superstorm Sandy, winter storm Nemo, and the massive summer wildfires of the past decade.
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