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Arctic oil – still in the picture

iceblogger on chukchi sea

Walking over the frozen Chukchi sea in Alaska. Do we really need oil from here?

Was it too good to be true? The euphoria over the US administration’s moves to protect the Arctic National Wildlife Refuge was dampened somewhat when, just two days later, it released a long-term plan for opening coastal waters to oil and gas exploration, including areas in the Arctic off Alaska. The plan excludes some important ecological and subsistence areas from potential drilling, but it still includes some Arctic areas, including parts of the Beaufort and Chukchi Seas.

Margaret Williams, managing director of WWF US Arctic Programs, told Deutsche Welle, she welcomed in particular the decision to protect the biological hotspot of Hanna Shoal from risky offshore drilling. The Hanna Shoal is a key site for walruses and other animals.

But she stressed other areas of the US Arctic were still subject to oil exploration. The new program will not affect existing leases held by Shell in the Chukchi Sea. The company’s efforts have been the subject of controversy, not least since the grounding of the drill rig Kulluk.

Greenpeace Arctic protest in Bonn

Conservation groups like Greenpeace want to protect the Arctic from drilling. (I.Quaile, Bonn)

Williams says the problem with the new proposal in general is that it “keeps drilling for oil in the US Arctic offshore in the picture”. With the US poised to take the helm of the Arctic Council, she called for protecting biodiversity to be a top priority for all Arctic nations.

Oil: valuable asset or liability?

It comes as no surprise that Alaskan state politicians and the oil industry promised to fight planned restrictions, saying they were harmful to the economy. But this brings us back to the question of whether the search for new oil in the Arctic makes any sense at all at a time when oil prices are at a record low and the USA is producing plentiful supplies of shale gas.

Bloomberg financial news group quotes financial experts as saying the world’s biggest oil producers do not have “bulletproof business models”, and cites financial cutbacks by BP, Chevrol and Shell:

“The price collapse hobbles a segment of the industry that had already been struggling with years of soaring construction costs, project delays, missed output targets and depressed returns from refining crude into fuels”, analyst Anish Kapadia told Bloomberg.

Climate paradox

Conservation groups stressed the need for a different focus, in the year when the USA has pledged to help create an effective new world climate agreement in Paris in November.

Arctic psychologist Stoknes' cartoon

Cartoon by psychologist Per Espen Stoknes, BI Norwegian School of Management.( I photographed it at a workshop on climate change psyschology)

“Rather than opening more of the Arctic and other US coastal waters to drilling for dirty energy, the US needs to ramp-up its transition to a clean energy future. As the Administration works to rally international leaders behind a bold climate pact in 2015, decisions to tap new fossil fuel reserves off our own coasts sends mixed signals about US climate leadership abroad, ” said WWF’s Williams.

We know the Arctic is being hit at least twice as fast as the global average by climate change. The ecosystem is already under huge pressure. The Arctic itself is in turn of key importance to global weather patterns. And burning more oil would exacerbate the situation even further.

“We would like to think that we can shift our energy paradigm to clean energy so that we don’t have to take every last bit of oil out of the earth, especially out of the oceans”, said Jackie Savitz from the Oceana Campaign croup.

Studies by the group and by WWF indicate that developing renewable energy technologies such as offshore wind could create more jobs than hanging on to fossil fuel technologies.

Oil spill concern

In addition to the climate paradox of the hunt for new fossil fuels, environmentalists are concerned about the possible impact of an oil spill. Their  opposition is not limited to the Arctic. Proposals to open up large areas of coastal waters including some parts of the Atlantic for the first time have also aroused anxiety about possible pollution. But the Arctic is of particular concern because of its remoteness, harsh weather conditions and seasonal ice cover, which is not likely to disappear soon even with rapid climate change:
“Encouraging further oil exploration in this harsh, unpredictable environment at a time when oil companies have no way of cleaning up spills threatens the health of our oceans and local communities they support. When the Deepwater Horizon spilled 210 million gallons of crude oil five years ago, local wildlife, communities and economies were decimated. We cannot allow that to happen in the Arctic or anywhere else,” said WWF expert Williams.

White House senior counsellor John Podesta justified the ban on oil exploration in the ANWR by saying “unfortunately accidents and spills can still happen, and the environmental impacts can sometimes be felt for many years”. The question is – why should this only be applicable in certain areas?  Campaigners say it also applies to the other areas now designated by the administration as “OK” for exploration. For the Arctic in particular, limiting exploration to remote offshore areas does not protect the region against the risk of environmental disaster.

 

 

Date

February 2, 2015 | 11:47 am

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Obama stops oil in Arctic Wildlife Reserve

snow

Winter weather in Germany (Pic: I.Quaile)

Back in Germany after spending a week and a half on the RV Helmer Hanssen off the coast of Spitsbergen, and then in Norway’s Arctic capital Tromso at Arctic Frontiers, I thought I might be in for a shock on my return to warmer climes and a news agenda focusing on stories non-Arctic. Instead, I found some continuity both in the weather and the media.  A heavy fall of snow here kept the Arctic feeling alive, while a twitter of messages on Sunday carried on the lively debate that was happening at Arctic Frontiers over the pros and cons of oil drilling in the Arctic.

The Washington Post broke the story about President Obama proposing new wilderness protection in the Arctic National Wildlife Refuge (ANWR). “Alaska Republicans declare war” was the second part of the headline. Clearly, emotions are running high.

The Obama administration is proposing setting aside more than 12 million acres of the Arctic National Wildlife Refuge in Alaska as wilderness. This stops – at least for the moment – any prospect of oil exploration in an area which has long been the subject of controversy between those who say environment protection should be the number one priority and those who say finding oil is more important.

Polar bear, courtesy of WWF

Habitat under threat for polar bears (Pic: courtesy of WWF)

“Alaska’s National Wildlife Refuge is an incredible place – pristine, undisturbed. It supports caribou and polar bears, all manner of marine life, countless species of birds and fish, and for centuries it supported many Alaska Native communities. But it’s very fragile”, the President says in a White House video about the proposals.

It seems this is only the first of a series of decisions to be made by the Interior Department relating to the state’s oil and gas production during the coming week. The Washington Post says the department will also put part of the Arctic Ocean off limits to drilling, and is considering whether to impose additional limits on oil and gas production in parts of the National Petroleum Reserve in Alaska.

Only the US Congress can actually create a wilderness area, but once the federal government has designated a place for that status, it receives the highest level of protection until Congress acts. “The move marks the latest instance of Obama’s aggressive use of executive authority to advance his top policy priorities”, writes Juliet Eilperin in the Washington Post.

The ANWR holds considerable reserves of petroleum, but is also a critical habitat for Arctic wildlife. Senator Lisa Murkowski from Alaska is the new chairman of the Senate Energy and Natural Resources Committee. Unsurprisingly, she is set to fight the Obama decision. The Governor of Alaska, Bill Walker, issued a statement saying he might have to accelerate giving permits for oil and gas on state lands to compensate for the new federal restrictions.

Can the fate of an area of such key ecological importance really be reduced to a good to be bargained for in a political tit-for-tat?

The Tromso debate continues: do we need Arctic oil?

The Tromso debate continues: do we need Arctic oil?

Conservation groups were over the moon about the Obama move. “Some places are simply too special to drill, and we are thrilled that a federal agency has acknowledged that the refuge merits wilderness protection”, said a statement from Jamie Williams, president of the Wilderness Society.

But apart from the danger of an oil spill and the threat to the habitat of Arctic species, we have to come back to that Tromso conference theme of Climate and Energy. The Arctic is being hit at least twice as fast as the global average by climate change. The ecosystem is already under huge pressure. The Arctic itself is of key importance to global weather patterns. And burning more oil would exacerbate the situation even further. I am reminded of the argument put forward by Jens Ulltveit-Moe, the CEO of  Umoe, himself a former oil industry executive. Apart from the fact that the current low oil price means the Arctic oil hunt is too expensive, if the world is serious about emission cuts to halt climate warming, there is no need for and will be no demand for oil from the Arctic in coming decades.

That is something to be kept in mind as the debate in the USA continues over that precious piece of land and sea that is the ANWR.

 

 

Date

January 26, 2015 | 4:01 pm

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Climate worry grows at Arctic Frontiers

 

Tromso campus, the Arctic University of Norway, hosts Arctic Frontiers

Tromso campus, the Arctic University of Norway, hosts 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.

Arctic fan Prince Albert of Monaco and US special rep Fran Ulmer debated the feasibility of Arctic oil

Arctic fan Prince Albert of Monaco and US special rep Fran Ulmer debated the feasibility of Arctic oil

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:

Norwegian PM Solberg wants to combine climate protection with Arctic gas

Norwegian PM Solberg wants to combine climate protection with Arctic gas

“’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?

Ice is a problem for shipping and other activities in the dark season

Ice is a problem for shipping and other activities in the dark season

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?

tromso2

Tromso: the gateway to the Arctic

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.

The rector of Tromso Arctic University and the mayor of Tromso have reason to be happy with the participation at this year's Arctic Frontiers event.

The rector of Tromso UiT Arctic University of Norway  Anne Husbeckk and the mayor of Tromso Jens Johan Hyort have reason to be happy with the attendance at this year’s Arctic Frontiers event.

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.

Chairman of the conference steering committee and master of ceremonies sporting a sealskin bow tie.

Salve Dahle, Chairman of the conference steering committee and master of ceremonies sporting a sealskin bow tie.

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.

If polar bears had a vote...

If polar bears had a vote…

Date

January 21, 2015 | 6:49 pm

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Arctic Oil – a white elephant?

Tromso, the home of Arctic Frontiers

Tromso, the home of Arctic Frontiers

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…

Prince Albert and Fran Ulmer

Prince Albert and Fran Ulmer

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.

Advocates oil from the Arctic: Kjell Giæver

Advocates oil from the Arctic: Kjell Giæver

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.

P1010324

Keeping a wary eye on his Arctic home…

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.

 

Date

January 19, 2015 | 12:07 am

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Arctic Economic Council – and the environment?

Shipping in icy waters is becoming more common

Shipping in icy waters is becoming more common (Pic: I Quaile)

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.

Beautiful but on the endangered list

Arctic ice on the endangered list (Pic: I.Quaile)

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.

Save the Arctic protest lantern in Bonn

Greenpeace are protesting around the world to save the Arctic (Pic: I.Quaile)

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.

Date

September 2, 2014 | 8:48 am

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