The US should immediately begin a push to exploit its enormous trove of oil in the Arctic waters off of Alaska, or risk a renewed reliance on imported oil in the future, a US Department of Energy advisory council says in a study scheduled be released yesterday.
The US has drastically cut imports and transformed itself into the world’s biggest producer of oil and natural gas by tapping huge reserves in shale rock formations, but the government predicts that the shale boom will not last much beyond the next decade.
In order for the US to keep domestic production high and imports low, oil companies should start probing the Artic now because it takes 10 to 30 years of preparation and drilling to bring oil to market, according to a draft of the study’s executive summary obtained by reporters.
“To remain globally competitive and to be positioned to provide global leadership and influence in the Arctic, the US should facilitate exploration in the offshore Alaskan Arctic now,” the study says.
The study, produced by the National Petroleum Council at the request of US Secretary of Energy Ernest Moniz, comes at a time when many argue the world needs less oil, not more. US oil storage facilities are filling up, the price of oil has collapsed from more than US$100 a barrel to about US$50, and prices are expected to stay relatively low for years to come.
At the same time, scientists say the world needs to drastically reduce the amount of fossil fuels it is burning in order to avoid catastrophic changes to the climate.
The push to make the Arctic waters off of Alaska more accessible to drillers comes just as Royal Dutch Shell is poised to restart its troubled drilling program there. The company has little to show after spending years and more than US$5 billion preparing for work, waiting for regulatory approval, and early-stage drilling.
After assuring regulators it was prepared for the harsh conditions, one of its drill ships ran aground in heavy seas near Kodiak Island in 2012. Its drilling contractor, Noble Drilling, was convicted of violating environmental and safety rules.
Environmental advocates say the Arctic ecosystem is too fragile to risk a spill, and cleanup would be difficult or perhaps even impossible because of weather and ice.
“If there’s a worse place to look for oil, I don’t know what it is,” Natural Resources Defense Council Alaska director Niel Lawrence said. “There aren’t any proven effective ways of cleaning up an oil spill in the Arctic.”
However, global demand for oil is expected to rise steadily in the coming decades because hundreds of millions of people are rising from poverty in developing regions and buying more cars and flying in airplanes more often.
In order to meet that demand and keep prices from soaring, new sources of oil must be developed, the council says.
The study acknowledges a host of special challenges to drilling in the Arctic, including the sensitive environment, the need to respect the customs and traditions of indigenous peoples living there, harsh weather and sea ice.
However, the council, which is made up of energy company executives, government officials, analysis firms and nonprofit organizations, says the technology needed to operate in the region is available now.
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