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Climate worry grows at Arctic Frontiers
I have followed the past two days, the political section of the Arctic Frontiers conference, with great interest, with the thought of the Paris climate conference in November always at the back of my mind.
Clearly, in a country rich from the sale of oil, cutting climate-killing emissions is a tricky issue. The oil sector was strongly represented here, but so too were those who see the need for a transition away from fossil fuels in the interests of the global climate.
With climate change opening the Arctic to development and the search for the oil, gas and minerals thought to be locked beneath the icy region, this year’s Arctic Frontiers meeting has attracted record participation. The impact of low oil prices on development prospects, and political tensions between Russia and western Arctic states have heightened interest in listening to what experts and decision-makers have to say on the relation between climate and energy.
With prime ministers from Norway and Finland and other ministers from Sweden and Denmark, as well as the US special Representative for the Arctic and the Russian President’s special representative for international polar cooperation addressing the meeting, media interest is high in this Arctic city, two hours flight north of the Norwegian capital, Oslo. (Looking at my flight schedule, I see Oslo is actually closer to Frankfurt than to the Arctic north of the country).
Do we need Arctic oil in a warming world?
The Norwegian premier Erna Solberg was here for the presentation of a report on sustainable growth in the north, a joint venture by Norway, Sweden and Finland. Gas is one of the four drivers named in the report. She left no doubt about her country’s continuing interest in oil and gas exploitation in the Arctic region. She told me in a brief interview she sees no contradiction between this and attempts to reach a new world climate agreement in Paris at the end of the year:
“’We have an oil and gas strategy. There are many not yet found areas where we think there is more gas. We think gas is an important part of a future energy mix, and I think we have to explore to find it.”
The same day, the Norwegian government allocated new licenses for exploration in the north-western Barents sea area of the Arctic. Many of the blocks released for petroleum licensing are close to the sea ice zone that had previously been protected. The zones have now been redefined. Conservation groups are upset. WWF Norway says the announcement is risky, as there is still a lack of knowledge about species and ecosystems in this area.
Will low oil price halt Arctic energy development?
With oil prices at a record low, environmentalists hope Arctic development will slow down or even be put “on ice” permanently. Representatives of WWF told the delegates in Tromso – including high-ranking representatives of major oil companies Statoil and Rosneft – the world does not need oil from the Arctic. And gas should be only a “transition fuel”. Samantha Smith, leader of the ngo’s Global Climate and Energy Initiative, quoted the recent study indicating that 50% of the world’s remaining gas and 30% of the oil must stay in the ground if the two degrees centigrade target for maximum global temperature rise agreed by the international community is to have any chance of being adhered to. She presented an alternative vision of “a thriving green economy in the white north”, with renewable energies replacing the search for oil and gas.
Business rethinking fossil investment?
As I wrote here on the Ice Blog after the Sunday evening opening, it is not only the environment lobby that is advocating a switch to renewable enerergy. Jens Ulltveit-Moe, the CEO of Umoe, one of the largest, privately owned companies in Norway, active amongst other things in shipping and energy, said with the current low oil price, Arctic oil was simply not viable, and this would remain the case for many years to come. And by then, he said, the EU’s climate targets and the international support for a two-degree target would make fossil fuels a non-option.
But Sjell Giæver, Director of Petroarctic and Tim Dodson, Norwegian Statoil’s Head of Global Exploration, insisted short-term price drops alone would not halt Arctic exploration. The region was the last place to discover large new reservoirs to satisfy continuing high demand for oil and gas for an increasing world population.
Oil ventures in the Arctic have not been particularly successful in recent years. Statoil’s Dobson admits the biggest ever exploration drilling programme in the Barents Sea last year had a disappointing outcome. Statoil and others have also withdrawn from the hunt for oil off the coast of Greenland.
Russia hungry for Arctic energy
But the Russian President’s Special Representative for International Cooperation in the Arctic, Arthur Chilingarov, who is also a Member of the Board of Directors at the Russian oil giant Rosneft, stressed the company had completed construction of the northernmost well in the world last September. He said a new oil and gas field has been discovered and the program of Rosneft for 2015 to 2019 provided for a large volume of prospecting and drilling in the western part of the Arctic.
One factor however that is slowing Russian activity the Arctic is the implementation of sanctions by European countries and the USA on account of the tensions over Ukraine. Russia has turned to China and other countries for help, but the lack of western technology is an obstacle to further development in a region where bad weather, ice, remoteness and complete darkness in the winter months make oil and gas development a risky business.
There is a clear tendency amongst those involved in Arctic cooperation to play down the sanctions and keep political tensions out of the region. Norwegian President Solberg told me: “We have a good relationship in the Arctic Council with Russia. We have said we will be in line with Europe on sanctions, although Norway is one of the countries hit most by the counter-sanctions from Russia, for instance the fact that oil and gas exploration are among the sanction areas.”
But in the meantime, on a day-to-day basis, cooperation continues, for instance in the joint management of fish resources, said Solberg.
Business as usual?
While the debate continued in the political section of Arctic Frontiers, a new, business strand of the conference opened in parallel. It focuses – on oil, gas and minerals. Olav Orheim from GRID Arendal, a centre that works with UNEP, stressed that a lot of people here are in favour of Arctic oil and gas exploration, in the interests of jobs and economic benefits.Yet after the publication of last year’s IPCC report and with climate change high on the international agenda, there seems to be a wider acceptance here in Tromso of the disconnect between burning fossil fuels and the ever more urgent need to reduce greenhouse gas emissions.
Gunnar Sand is Vice President of SINTEF, the Norwegian “Foundation for Scientific and Industrial Research”, which has close ties to the oil business. From a moral point of view, “we all want to stay below the two degree limit”, says Sand. But it is not possible to change a society and an infrastructure based on fossil fuels overnight.
Technical progress too slow to stop warming
Technology for renewable energy is still not developing fast enough, says Sand. Emission reduction scenarios also rely heavily on carbon capture and storage (CCS), which would reduce emissions from fossil fuel burning and bridge the transition to a low-carbon economy. But the technology, which he himself has been involved in, is moving too slowly. I first met him during a visit to Svalbard, when he told me about a carbon capture and storage project, designed to capture emissions from Longyearbjen’s power station underground. He confirmed in Tromso that it has never been put into action.
Global warming, Sand says, is the most serious challenge of our time. This has to be reflected in political priorities. Governments have to create economic incentives to speed up change.
US special representative ex-Admiral Robert Papp indicated dealing with climate change would be one of the key policy drivers when the USA takes over the Chair of the Arctic Council, the international body that coordinates Arctic affairs, in April.
The Chair of the US Arctic Research Commission Fran Ulmer says a carbon tax would be the best way forward, to encourage industry and consumers to save energy and cut emissions. But she acknowledged the reluctance of governments to impose decisions that could upset their voters at the next election. That is the reality we face as countries weigh up their pledges for the November climate conference in Paris.
DateJanuary 21, 2015 | 6:49 pm
TagsArctic, Arctic Frontiers, Climate, Emissions, ice, Oil, polar bears, Renewables, Russia, science, Tromso, UN talks, Warming, wildlife
Arctic Oil – a white elephant?
The conference: Arctic Frontiers has attracted a record number of participants this year and huge media interest. For the first time in addition to a political and a science section, there is also a business section. It will focus on oil, gas and minerals. Clearly, once more, the Arctic is a “hot topic”.
The conference opened with an exceptionally good panel discussion tonight. The conference title is “Climate and Energy”, and it is hardly surprising that there is a lively debate on that here. Norway is, after all, an oil nation, but at the same time a country well known for innovation and wise financial management. And then, of course, comes the urgency of the climate conundrum…
Here in Tromso, Norway’s “Arctic capital”, the question of Arctic oil obviously plays a key role. The representative of the region Line Miriam Sandberg, County administrator for business, culture and health, and the panel chair Olav Orheim, (GRID Arendal, a centre that works with UNEP) made it quite clear that a lot of people here are in favour of Arctic development, including oil and gas exploration, in the interests of jobs and economic benefits.
The representative of the oil industry Kjell Giæver, Director of Petroarctic found himself a bit out on a limb, though. Apart from the Tromso representative, there was no real support for or confidence in Arctic oil development amongst the panelists. Guest of honour HSH Prince Albert II of Monaco, who is quite committed to Arctic protection and has a tradition of Arctic exploration in his family, stressed the need to protect against any dangers to the fragile environment.
The Chair of the US Arctic Research Commission Fran Ulmer called for a carbon tax and measures to protect the climate and reduce fossil fuel consumption. Although she stressed this was her personal opinion and she could not speak for ANY government (!), she is obviously in a very influential position, and anything she says on this has to be taken seriously.
It will come as no surprise that Nina Jensen, CEO of WWF Norway, is against oil exploration in the Arctic. I can remember her here at previous conferences having a much more difficult time, with plenty of opposition from other speakers. This time, my impression was that she was definitely not in a minority.
Probably the most noteworthy stance – certainly the one that impressed me most – was taken by Jens Ulltveit-Moe, the CEO of Umoe, one of the largest, privately owned companies in Norway, active amongst other things in shipping and energy. Here we had an industry representative, who said quite clearly that with the current low oil price Arctic oil was simply not viable, and this would remain the case for many years to come. (The oil industry rep as you can imagine disagreed). And by then, he said, the EU’s climate targets and the international support for a two-degree target would make fossil fuels a non-option. The future lies in renewables, he says, and Arctic oil investment will probably be a white elephant. (His group is involved in bioenergy), Now there is food for thought at the start of this high-profile gathering, which will see high-ranking government representatives from the Arctic nations, but also China and others, discuss “climate and energy”. If the opening debate is anything to go by, the next two days will be very lively.
DateJanuary 19, 2015 | 12:07 am
TagsArctic, Arctic Frontiers, Climate, Emissions, EU, Norway, Oil, polar bears, Renewables, USA, WWF
Arctic Economic Council – and the environment?
I would like to share my thoughts with you on the founding meeting of the Arctic Economic Council, taking place in Canada Sept. 2nd and 3rd. Iqaluit, the capital of the northern Canadian territory of Nunavut, is hosting the inaugural meeting of the, group set up to promote commercial development in the Arctic, as climate change makes the region more accessible. It was in Iqaluit that the first-ever ministerial meeting of the Arctic Council (AC) took place back in 1998. The newly established independent Arctic Economic Council (AEC), with close links to the AC, could prove to be equally influential.
Canada currently holds the rotating presidency of the Arctic Council, an organization linking eight Arctic states and six organizations representing Arctic indigenous peoples. Its self-set tasks include sustainable development, monitoring the Arctic environment, identifying pollution risks and environmental emergency preparedness. But in the race to open the Arctic to increased shipping, oil and gas exploration and mining, the formation of the new Arctic Economic Council (AEC) could see commercial interests gaining the upper hand.
Canada puts business first
Leona Aglukkaq, Canada’s Minister for the Environment, the Canadian Northern Economic Development Agency and the Arctic Council, is presiding over the founding meeting of the AEC. Its creation has been a key project during Canada’s 2013-2015 Arctic Council chairmanship, which Aglukkaq has focused on “development for the people of the North.”
“Our government prioritized the creation of the Arctic Economic Council to facilitate business opportunities, trade, investment and growth in the best interests of Northerners,” said Aglukkaq ahead of the two-day meeting. “Establishing this body is an historic moment for the Arctic Council in its efforts to advance sustainable development in the Arctic. I’m confident that the AEC will be a strong and effective body that will help enhance pan-Arctic economic cooperation for the benefit of communities and people in the Arctic.”
An unwise move for the AC?
But some people believe the AC could be making a mistake by allowing a potentially highly influential business group to grow outside of its own structures. Neil Hamilton, Senior Polar Political Advisor at Greenpeace International, told DW: “By creating an independent organization which answers to no one but has the authority to attend, work within, and manipulate the activities of the Arctic Council and its working Groups, the Arctic Council has severely undermined its own mandate.”
The AEC is being established with the contribution of the Arctic Council, but as an independent body. Representatives of both Councils would meet at regular intervals to discuss the economic development of the Arctic.
Originally, the AEC was envisaged as a circumpolar business forum. It’s since turned into a more formal structure. Each of the member states and each of the council’s indigenous permanent participant organizations was invited to send a maximum of three representatives to the inaugural meeting, where they will discuss the organization, structure and objectives of the AEC. The business representatives attending include CEOs and other high-ranking figures from a range of industries including oil and gas exploration, iron mining, tourism and shipping lines.
In the future, membership will not be limited to these nominations and may accept self-nominations from the Arctic business community.
A back-seat for the environment?
Canada says businesses in the Arctic will play a strong role in building a sustainable and economically vibrant future for the region. This will not reassure environment campaigners who have repeatedly attacked the current Canadian administration for its support of environmentally problematic industries such as oil tar sands or fracking, and for its refusal to back international climate agreements. The participation of the Vice-President of Russia’s Rosneft Oil Company Andrey Shishkin will raise eyebrows among those concerned about the possible environmental impact of oil exploration in the High North.
Finland is seeking to chair the AEC, although the group is to be purely business and not government run. In a press release, the country’s Foreign Ministry mentions environment protection but does not appear to give it priority when it outlines the objectives of the new body:
“In the future, the main focus of its work will be on the enhancement of the economic operating conditions of indigenous peoples and Small and Medium Enterprises (SMEs), the reduction of obstacles to trade, the support for sustainable economic operations, and raising of issues the AEC itself considers topical.”
In an AC paper on “facilitating the creation of the Arctic Economic Council,” environmental protection is only listed the last of six objectives, in connection with “maximizing the potential for Arctic economic activities.”
Conservationists are concerned that protecting the environment could take a back seat while companies pressure for fewer restrictions. With the Arctic warming more than twice as fast as the rest of the world and melting ice easing access to northern regions, the pace of Arctic development could outrun efforts to ensure environment protection and safety measures with increasing shipping and the risk of accidents or oil spills.
The World Wildlife Fund, which originally supported the group, told journalists the way it had been set up was “opaque and unaccountable”. WWF said it hat been refused permission to observe the meeting.
Greenpeace Arctic policy advisor Hamilton told DW: “The founding document of the Arctic Economic Council sets the frame for a new era of exploitation of the Arctic, without any indication of intent to protect the environment.” At the same time the Arctic Council, which was established to protect the environment, was “negating its prime function.”
Hamilton called on the Arctic Council to accord civil society the same privilege as it appears to be allowing the new economic group, by loosening regulations on granting the role of observer status.
The two-day meeting in Iqaluit ends on Wednesday, September 3rd. In the coming months, the Arctic Council will have to clarify its relation to the new AEC it helped create, and demonstrate how it’s going to reconcile the increasing pressure for commercial activity with avoiding environmental damage.
DateSeptember 2, 2014 | 8:48 am
TagsArctic, Arctic Council, Arctic Economic Council, Arctic trade, Business, Climate, ice, mining, Oil, sea ice, Warming
Arctic oil: confrontations ahead?
The first oil from the controversial Prirazlomnaya offshore Arctic oil platform is on its way to Rotterdam. This, you will remember, was the oil rig where the Greenpeace “Arctic 30” were arrested by Russian forces last September during a protest. The Greenpeace ship Rainbow Warrior III is on its way to meet the tanker, the “Mikhail Ulyanov”, and protest against Arctic oil drilling. (The Greenpeace icebreaker Arctic Sunrise remains in the custody of the Russian Investigative committee, over six months after the action and four months since an official amnesty was adopted).
This oil transport marks the first ever shipment of Arctic offshore oil. Interestingly, it has been bought by the French oil concern Total SA. I remember the furore when the chief executive of that very company Christophe de Margerie, ruled out drilling in the Arctic in 2012 out of concern about the effect of a possible spill. Hm. Looks like it’s OK to profit from the oil as long as somebody else takes the risk. Although I seem to remember at the time that worry about the negative impact a spill in the sensitive ecosystems of the remote Arctic would have on the image of the industry as a whole played a role in the decision.
Greenpeace Captain Peter Willcox, a member of the ‘Arctic 30’ who was imprisoned in Russia for over two months after the protest at Gazprom’s Prirazlomnaya platform in the Pechora Sea last year, is at the helm of the Rainbow Warrior III. The organization is not saying much about what form the protest will take as yet. But presumably the risks of a drastic response like last year’s Russian crack-down are minimal in the North Sea. As far as the culture of dealing with protest in the Arctic is concerned however, a recent announcement by President Putin gives little reason for optimism. On April 23rd, the Barents Observer carried a worrying report headlined “Putin arms Arctic drillers” on a meeting between Putin and his top national security aides. It says Putin highlighted the need for an enhanced security presence in Russian Arctic territories to protect oil production facilities, loading terminals and pipelines “against terrorists and other potential threats”.
The same day Putin signed amendments in a federal law on the protection of oil and gas objects and infrastructure. It gives Russian oil companies the right to establish their own protection units. The Barents Observer quotes the newspaper Rossiskaya Gazeta as suggesting the companies might eventually hire “thousands of well-armed people, equipped with automatic weapons, vehicles, vessels and aircraft”, mostly former military personnel, police officers and special forces agents. Even if that proves to be slightly exaggerated: the thought of corporate armed units having the law in their own hands to squash anything that looks like opposition to Arctic development is a nightmare.
“This week’s Arctic speech from the Russian leader has a scope which goes far beyond imagined threats from potential terrorists. It also includes a major element of heightened inter-state tensions”, according to the Barents Observer. Given the current climate against the background of the ongoing Ukraine conflict, I have to share that concern. With the Russian leader stepping up the country’s military presence in the Arctic arguing that there is an “increasing conflict of interest between the Arctic coastal states” and that “the situation in the world is fraught with new risks and challenges to Russian national interests”, it is hard to be optimistic about the prospects for an Arctic future free of confrontation.
DateApril 28, 2014 | 2:16 pm
Eco-group questions Iceland oil
Back in January, China’s state-owned oil company CNOOC obtained an Arctic exploration licence for the remote Dreki area, 125 miles off the north coast of Iceland. Iceland has very close relations with Beijing. When I interviewed the Foreign Minister Gunnar Bragi Sveinsson at an event in Tromso earlier this year, he told me:
“We have a very good cooperation with China. We hope our Free Trade Agreement will be fully implemented in the summer. China is a very big player in the world economy. They are showing interest in the Arctic, interest in western Europe, and we treat them like anybody else in the world. As long as they play by Icelandic rules, Icelandic law, we don’t worry. I see opportunities in working with China, no threats”.
I was interested to come across a short item by the news agency AFP about a group that sees Arctic development a little differently; the Iceland Nature Conservation Association. Their opposition has nothing to do with the fact that China is investing in the region, but with the basic fossil fuels-climate paradox. The agency quotes the chairman, Arni Finnsson:
“Iceland should not bet on oil at a time when it is doubtful that humanity can reach its (greenhouse gas) goals.”
Apart from the climate implications, Finnsson says oil production in the area envisaged by CNOOC along with Icelandic firm Eykon Energy and Norway’s state-owned Petoro is unlikely to be cost-efficient. The cost factor is one analysts say will play the key role in determining whether offshore oil exploration in the Arctic will be viable, as discussed on various occasions here on the Ice Blog.
Iceland is still recovering from the financial crisis of 2008-2009 and hopes to follow in neighbouring Norway’s footsteps and build a lucrative oil industry. “That is the hope,” Thorarinn Sveinn Arnarson, who heads the hydrocarbon licensing department at Iceland’s national energy authority, told AFP. “If something is found that is economically viable there would be tax benefits and of course all the other things, job creation and technical capacity like we’ve seen in Norway and in the Faroe Islands.”
But experts warn that this vision could be some way off if it ever materialises. Dag Claes, a leading oil and gas expert at the University of Oslo, stresses the remoteness of the area. He also draws attention to the problems of developing a suitable infrastructure for an oil industry in this part of the world, a problem I wrote about here on the Blog recently. You might also like to check out the article: Are we prepared for a catastrophe in the Arctic?
DateMarch 7, 2014 | 12:47 pm