Shell and Cairn Energy Announce 'Risky' Drilling Plans in Arctic
Explorations off Alaska's north coast condemned by environmentalists after Deepwater Horizon disaster
A new battle between environmentalists and Big Oil over drilling in the Arctic was triggered today when Shell unveiled "risky" plans for the Beaufort Sea while a Cairn Energy rig set sail for Greenland.
Shell, Europe's largest oil group, has submitted plans to the US government for permission to drill 10 exploration wells in the Beaufort and Chukchi seas off the north coast of Alaska in 2012 and 2013.
Previous plans to start this summer were halted first by the moratorium imposed after the Deepwater Horizon disaster last April and then by a ruling from the Environmental Protection Agency.But Shell said it was now confident that it could offer regulators the reassurances that should enable it to proceed with a programme said to have cost it $2bn to lease the acreage and possibly an additional $4bn in planning.
"Shell was one of the original offshore explorers in Alaska," said a spokesman at the company's head office in The Hague. "As in years past, Shell remains committed to employing world-class technology and experience to ensure a safe, environmentally responsible Arctic exploration programme in 2012 – one that has the smallest possible footprint and no negative impact on traditional substance hunting activities of the people of the North Slope."
Cairn meanwhile has given the green light to the drill ship, Ocean Rig Corcovado, to leave Aberdeen heading for Nuuk. It is also bringing a separate drilling rig, Leiv Eriksson, through the Mediterranean en route for the far north. Greenpeace has already boarded the rig off the coast of Turkey in protest at the Greenland drilling plans and said it remained totally opposed to what both Cairn and Shell plan to do in the Arctic region.
"The high north is becoming the frontline of the global environmental battleground," said Ben Ayliffe, senior oil campaigner at Greenpeace. "Shell is gambling with the fragile Alaskan environment a year after the Deepwater Horizon spill, lining up to start dangerous drilling in one of the world's most pristine natural habitats despite the terrible risks of a spill there.
"As climate change causes the sea ice to retreat, oil companies are rushing in to extract the fossil fuels that caused the melt in the first place. It's madness – you don't put out a fire with gasoline. Instead of drilling in the Arctic, we should be extracting oil from the car industry by driving up the efficiency of their vehicles and forcing them to use new clean technologies."
The Alaska Wilderness League also condemned Shell, saying it was relying on "the same failed technology" used in BP's devastating spill 12 months ago off the coast of Louisiana yet the drilling conditions were far worse and the marine environment rich but less understood.
"Despite the risk of a spill that could eclipse the devastation in the Gulf of Mexico, Shell's proposed scope for 2012 and 2013 is more risky and aggressive than ever," said Cindy Shogan, the league's executive director. "The [Inupiat] people who have thrived off the Arctic waters for thousands of years and those who treasure the Arctic's unique wildlife will continue to demand that the Obama administration not allow Shell to move forward."
The northerly region has become a new frontier for exploration since global warming caused ice to melt, oil escalated in value to its current $114 a barrel and the US Geological Survey concluded that almost a quarter of the world's undiscovered oil and gas reserves may lie in the Arctic.
Cairn created excitement last summer when it reported it had found indications of hydrocarbons with a well off Greenland while BP has signalled its interest by signing up for a controversial deal to explore in the far north of Siberia with Russian group Rosneft. This scheme is being challenged by another of its partners inside TNK-BP. The region has seen wider industrial, political and military interest over the last two years.