EARLIER THIS WEEK Christophe de Margerie CEO of the French oil giant Total announced that the company would not be drilling for oil in the Arctic as an oil spill “would cause too much damage to the company”.
Unlike other oil executives who are desperate to get the black gold flowing up north, de Margerie has clearly not forgotten the Deep Horizon blowout. In April of 2010 an explosion on the BP rig Deep Horizon killed 11 men, caused unprecedented damage to the ecosystem around the Gulf of Mexico, and was a public relations disaster for BP.
It is quite a drastic step taken by the Frenchman – one for which his shareholders may not thank him in the short term – but if the coastline of western Europe is hit by an oil spill in the next few years he can justifiably say, “I told you so”.
Should a blowout occur in the Arctic region, oil would likely be deposited into the North Atlantic Current of the Gulf Stream which runs right up the northwest side of Ireland. How likely is a blowout? According to a study carried out in the UK for the House of Commons it may be one of the “unavoidable impacts” of Arctic drilling.
What is not in doubt is that over the next 15 years the Arctic will overtake the Middle East as the world’s biggest oil and gas producing region. Under the UN’s Law of the Sea, the five Arctic States of America, Canada, Russia, Greenland (Denmark) and Norway each have an exclusive economic zone which stretches 200 nautical miles from their respective shorelines and gives them rights to any resources in the sea area and under the seabed.
Russia has the longest Arctic shoreline and therefore holds rights to the largest area, with the other four dividing the remainder between them. A massive area of the Arctic Ocean is outside of this 200 NM boundary and is therefore an area of international waters that belongs to no particular country. Russia, America and Canada are now haggling over their entitlement to the unclaimed far north, a region where conditions are so severe that Russia and America used it as nuclear dumping ground for years, both content that the waste would not be disturbed for centuries to come.
China is now also looking for rights in the international waters too, claiming to be a “near Arctic state”. China will undoubtedly have an interest in the estimated 160 billion barrels of crude oil, 1.65 trillion cubic feet of natural gas and 883 million barrels of liquid gas around the Arctic, but what will be of perhaps even greater interest to the oriental giant is the so-called Northern Sea Route. This channel is the shortest possible route between China and Europe/America and will save China, the world’s largest exporter, a fortune when it becomes a dependable summer shipping channel by the end of the decade. Beijing to Hamburg via the Northern Sea Route is 6,400km shorter than China’s current passage to Europe through the Malacca Strait and the Suez Canal. The channel, which passes through the North Sea, will also become a major route for three oil tankers heading eastwards.
Separate to the Arctic States is the Arctic Council which includes the five states as well as Iceland, Sweden and Finland. There is also a mix of observer states such as the UK, France and Japan. The Council is an intergovernmental body which ensures that the Arctic States all get on with each other and that the indigenous people are fairly represented. It is here, at the Arctic Council, that countries have the ability to question the safety of oil drilling and make sure that inherent risks of oil production are minimised.
“Who will clean it up?”
This is the place where you would expect to find Phil Hogan asking some very basic questions such as – if oil pollutes the Irish coast as a consequence of an Arctic blowout – who will clean it up?
To date the drilling in the Arctic has been exploratory. Despite the newfound accessibility to the region drilling is still both very difficult and expensive. Engineers are finding that most wells will be in relatively shallow waters of between 40 to 500 metres of water. However the melting pack ice is unreliable, and there are fears about the potential damage that could be caused to rigs by massive icebergs breaking off the Petermann Glacier. Earlier this year a satellite picked up an iceberg floating south of Greenland which had an above-waterline surface area that was twice the size of Manhattan Island.
There will of course be an opportune time for the oil companies to tap the oil and gas. The longer oil stays in the ground the more valuable it will become and a sudden surge in availability would see a drop in oil prices, not something that the oil companies want. However, there are signs that the oil companies are reading themselves to get things rolling.
Shell made significant efforts, $4.7 billion worth, to tap wells. Their efforts were hampered by the US Coast Guard who has concerns over how an emergency response would be conducted in the area. Shell were also hindered by Greenpeace and the oil giant are in the process of suing the organisation with the intention of securing the right to fine them $1 million every time they protest within 500 metres of Shell property.
“Seven months before ice melts to allow rescue units access to leak”
Should an oil spill occur in the Arctic Ocean the US Coast Guard would be the principle authority in coordinating a response within the area. The biggest concern around a spill is accessibility. Should a disaster similar to the Deep Horizon spill occur during the frozen winter, it may be up to seven months before the ice melts away allowing rescue units get to the leak. When they do get there, facilities such as deep sea ports and airports are scarce. As the commandant of the Coast Guard Robert Papp points out he would be responsible for “feeding and housing 4,000 people, there would need to be a hospital near the location, all sorts of facilities would need to be in place. At the moment they do not exist”.
Oil spills are never a good thing, but the Arctic is the last place on earth, bar possibly the Antarctic, that you want an oil spill to occur. Unfortunately oil companies have no clear idea how to prevent spills or a definite plan of action when one does occur.
Since the Deep Horizon blowout there have been 19 separate incidents which have polluted the world’s oceans with 215,000 tonnes of crude oil. With the level of drilling expected in the Arctic over the next 10 years it is likely that a blowout will occur at some point. Despite the oil executives’ rush the oil is not going anywhere and what is vital at this stage is that oil companies put in place watertight safety and clean up plans before they start drilling, and that governments, including Ireland, are entirely satisfied that there is no risk to the environment.
Eoin Lynch tweets at @Eoinlyncho