US government suspends Arctic offshore drilling

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(Courtesy of wikimedia.com) The diagram indicates that opening up drilling in the Arctic National Wildlife Preserve would not increase total U.S. oil production significantly, as total production will taper off after 2025.

The Obama administration announced on Oct. 16 that it is backing away from arctic offshore oil drilling.

The move comes on the heels of Royal Dutch Shell and Statoil’s announcement that it would indefinitely suspend Arctic oil and gas drilling because insufficient finds at one of its exploratory shafts no longer made drilling financially viable due to high exploratory costs.

This is an about-face from Obama’s conditional approval of offshore drilling in the icy Arctic waters a few months ago.

His approval last May to allow Shell to drill in the Chukchi Sea was seen by environmentalists as a decision that balanced, or even compromised his ambitious environmental agenda in other realms of policymaking.

The government’s decision to suspend Arctic drilling in the Chukchi and Beaufort Seas for two years seized on Royal Dutch Shell’s recent disappointing drilling results.

Shell had spent 7 billion dollars on this project and was unable to recuperate its losses due to insufficient oil funds and low oil prices.

According to Interior Department data from 2011, there are 22 billion barrels of offshore oil and 93 trillion cubic feet of natural gas able to be recovered under ideal conditions.

Royal Dutch Shell’s Arctic drilling project has historically been the most advanced of its projects, but the decline of Arctic oil exploration coincides with a rise in the hydraulic fracturing of shale rock for natural gas.

The recent decision to suspend oil drilling would mean that no energy company would be drilling in the U.S portion of the Arctic Ocean for the next two years.

Current lease rights for drilling will not be extended, despite Shell’s appeals otherwise.

The granting of leases to petroleum companies for offshore oil exploration has historically been one of fits and starts, underlying a contention that has yet to be resolved.

While this decision to suspend drilling was decided based upon current market conditions and lack of company interest, environmentalists see themselves as having played a role leading up to the decision to cancel natural gas and oil lease sales.

Environmentalists perceive Shell’s recent failure as vindication that its big bets are just for naught and have challenged the past decision to approve oil drilling in court. Many environmentalist groups have resorted to actions of protest, such as organizing a flotilla of kayaks to protest Arctic-bound oil rigs docked at harbors.

The Arctic has always been a controversial place for drilling, pitting petroleum companies who see undiscovered offshore oil as economic opportunity against environmentalists who argue that the Arctic is one of the most risky and challenging places for oil exploration.

The Arctic has traditionally been seen as a vast frontier for oil companies to extend their reach and tap mature oil reserves.

Alaskan legislators have condemned the ban of offshore drilling as a move that need not be taken. They see it as regulatory overreach that would destroy the Alaskan economy.

Government regulation of the environment is a hot topic on the minds of sustainability-minded students this term.

It echoes the call that Eban Goodstein, environmentalist and Director of the Center for Environmental Policy at Bard College, made to students last month for greater engagement and debate-style discourse on environmental policymaking and the path the US should take on solving the problem of climate change.

Policy experts believe that the drilling controversies unfolding in the Arctic is more than likely to reinforce the message of climate change as an issue to be addressed in the 2016 presidential elections.

As the 2016 campaign heats up, students have been taking sides on the energy platforms outlined by candidates.

Patrick Gardner ’17 struck an idealistic tone when discussing the debate over offshore oil exploration, taking a middle-ground stance.

Gardner stated, “The way things are going is that we need some way to get fossil fuels but the environmental consequences cannot be ignored. The government should find a way to harvest fossil fuels from the ground with minimal exterior damage to the environment.”

 

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