"World on Edge details the vice closing around us: a quadruple squeeze of global warming and shortages in food, water and energy. Then it explains the path out—and how little time we have left to take that path. Got anything more important to read than that?" —Peter Goldmark, former head of the Port authority of New York and New Jersey, President of the Rockefeller Foundation, and CEO of the International Herald Tribune
Even master chess players can miss a great move when they have been primed to look for a different one. To explore this phenomenon, researchers tracked master chess players’ eye movements when given chessboards with different layouts. With the first board, players could reach checkmate using a familiar move. When given the second chessboard, the players' eyes kept looking at the pieces involved in the familiar move instead of scanning the whole board. In effect, the initial solution blinded them to new and better opportunities.
In a similar fashion, the world has become blinded by oil and gas as the familiar ways to run the economy and so is proceeding to look for them in hard-to-reach places like the Arctic, even as the costs mount and the returns diminish. An example of the world being set in its ways was the announcement on August 28th that Royal Dutch Shell, despite many setbacks in recent years, submitted plans to the U.S. government to again drill for oil offshore of Alaska as early as summer 2015.
Currently, about 10 percent of the world’s oil and one-quarter of its natural gas production come from the Arctic region, which has warmed by more than 2 degrees Celsius since the mid-1960s. Countries that border the Arctic Ocean are staking claims to expand their rights beyond the traditional 200-mile exclusive economic zone in anticipation of future oil and gas prospects. According to current estimates, the United States has the largest Arctic oil resources, both on and offshore. Russia comes in second for oil, but it has the most natural gas. Norway and Greenland are virtually tied for third largest combined oil and gas resources. Canada comes in fifth, with almost equal parts oil and natural gas.
In developing these resources, Russia is leading the pack. Production has started at almost all of the 43 large oil and natural gas fields that have been discovered in the Russian Arctic, both on land and offshore. Russia drew its first oil from an offshore rig in Arctic waters in December 2013. On August 9, 2014, ExxonMobil and Russia’s Rosneft together began drilling Russia’s northernmost oil well offshore of Siberia. Russia’s Novatek is working with France’s Total and the China National Petroleum Corp to develop a liquefied natural gas plant in the Arctic. However, tightening U.S. and European sanctions against Russia over the Ukraine crisis threaten the future of these joint ventures.
Norway—where the oil and gas industry accounts for almost a third of government revenues—currently boasts the only operating liquefied natural gas facility north of the Arctic Circle, operated by Statoil in the Barents Sea. Along with Italy’s Eni, Statoil is also involved with the development of the Goliat oil field, expected to come online in 2015. This will be the first oil production in the richly endowed Barents Sea, bordered by Norway and Russia. To the north and west, Greenland eagerly auctioned off drilling licenses first in the late 1970s and more recently in the 2000s, but so far all of its wells have turned up dry.
Canada had exploratory drilling in its Arctic territory in the 1970s and 1980s, but this dropped off in the 1990s. Since then, only one offshore exploratory well has been drilled, in 2005–06, but it was subsequently abandoned. One impediment to further development is the lack of infrastructure to bring the fossil fuels to market, which often requires large resource finds in order to finance its construction. In Alaska, the onshore Prudhoe Bay oil field—one of North America’s largest—has served this role. Discovered in 1967, it was large enough to finance construction of the TransAlaska Pipeline. Once that was built, development of smaller nearby oil fields became commercially viable.
Royal Dutch Shell has come the closest to developing Alaska’s offshore oil. As oil prices rose in the 2000s, so did Shell’s interest. Then Shell’s plans were delayed by court cases and a U.S. government moratorium on Arctic activity following BP’s Deepwater Horizon oil spill in the Gulf of Mexico. Further delays followed the damage to a Shell containment dome, which is designed to catch oil in the event of a spill, during testing in Puget Sound in Washington State. In 2012, Shell had a stop-start drilling season, interrupted by drifting icebergs, which was capped off by one of its drill rigs running aground in a heavy storm. The company opted to skip drilling entirely in 2013.
In early 2014, a federal court ruled that the U.S. government made a fundamental mistake when calculating the impact of oil and gas development on the Arctic environment. Therefore Shell’s licenses to drill were invalid and it missed another drilling season. Thus far, Shell does not have a drop of oil to show for the $5 billion it spent on its recent efforts off of Alaska, yet it has taken the first steps to try again in 2015.
As Shell has seen, operating in the Arctic brings great risks. The shrinking Arctic sea ice allows waves to become more powerful. The remaining ice can be more easily broken up into ice floes that can collide with vessels or drilling platforms. Large icebergs can scour the ocean floor, bursting pipes or other buried infrastructure. Much of the onshore infrastructure is built on permafrost—frozen ground—that can shift as the ground thaws from regional warming, threatening pipe ruptures. Already, official Russian sources estimate that there have been more than 20,000 oil spills annually from pipelines across Russia in recent years. Arctic operations are far away from major emergency response support. The freezing conditions make it unsafe for crews to be outside for extended periods of time. Even communication systems are less reliable at the far end of the Earth. Why take such risks to pursue these dirty fuels when alternatives to oil and gas are there for the taking?
Rather than searching for new ways to get oil, we can look for better ways to move people and goods. Bus rapid transit, light rail and high-speed rail can move more people for less energy than a car can. And for the cars that remain on the road, electric and plug-in hybrid electric vehicles—powered by a clean energy grid—are much more efficient than those with a traditional internal combustion engine. Encouraging bicycle use through bike lanes and bike-sharing programs gets people active and out of cars.
Natural gas, which is mainly used to produce electricity, can be replaced with power generated by wind, solar, and geothermal projects. Many countries are demonstrating what is possible with renewables. Denmark already gets one-third of its electricity from wind. Australia is now dotted with 1 million rooftop solar systems. Iceland generates enough geothermal power to meet close to 30 percent of its electricity needs. These are just a few examples of looking past the old familiar solution to a better cleaner one. The risky search under every rock and iceberg for oil and gas deposits is a costly distraction from investing in a clean energy future.