Tuesday, 7 July 2009

Arctic oil, gas on hold from lawsuits, economy

Arctic oil, gas on hold from lawsuits, economy

By Cassie Fleming THE WASHINGTON TIMES | Saturday, July 4, 2009



The global recession and lawsuits from environmental groups have slowed
the scramble for previously unattainable oil and gas reserves and shipping
routes in the Arctic caused by climate change, and have provided a window
to resolve complicated ecological and security concerns, specialists say.

Many major international oil and gas companies have put large-scale
projects on hold, said Alexander Braun, a specialist on Arctic change and
sea dynamics at the Arctic Institute of North America at Canada's
University of Calgary in Alberta.


Shell announced earlier this week that it was withdrawing its 2007-2009
drilling plan in the Beaufort Sea and would submit a new plan for 2010.
The U.S. Court of Appeals for the 9th Circuit in San Francisco blocked the
company from oil drilling in July 2007.

The center was also responsible for several lawsuits that led to last
year's listing of the polar bear as a threatened species under the
Endangered Species Act.

In addition to the United States, major countries including Russia,
Canada, Norway, Iceland and Denmark via Greenland are vying for investment
in the Arctic. The area is warming faster than any other region and will
be ice-free in the summer by 2013, according to a new report by the
Carnegie Endowment for International Peace, Dartmouth College and the
University of the Arctic in Canada.

"The present global economic slowdown provides a much-needed hiatus in
Arctic commercial pressures during which important Arctic powers could
work on developing coordinated rules and best practices by which to govern
Arctic resources," the report said.

Melting ice has allowed for expanded oil and gas production, mining,
fishing, shipping and cruise ship tourism, but it also causes safety and
environmental concerns such as moving glaciers, sea rise and coastal
erosion, Mr. Braun said. To assess and manage these consequences, he said,
governments must use this window to establish a monitoring network for the
Arctic by using technology that is already in use for other continents and


The Arctic is believed to hold 90 billion barrels of undiscovered oil - 10
percent of the world's remaining reserves and enough to supply current
world demand for three years. An estimated 30 percent of the world's
remaining reserves of natural gas are also in the region, according to the
U.S. Ecological Survey.

Companies such as BP - formerly British Petroleum - ConocoPhillips, Exxon
Mobil Corp., Shell, Pioneer Natural Resources, Eni, Anadarko and
StatoilHydro are currently the most active in Alaska and off-shore, Mr.
Ranger said.

BP and Exxon Mobil are also exploring the Canadian Arctic, he said.

"There's a growing energy demand and there's untapped energy sources in
the Arctic," said David Balton, a deputy assistant secretary of state at
the Bureau of Oceans and International Environmental and Scientific
Affairs. "Knowledge is growing of what is down there, and this is becoming
an issue."

U.S. policy for the Arctic has evolved more slowly than the ice is melting.


Under a 1994 treaty, the United Nations Convention on the Law of the Sea,
countries have the sovereign right to the seabed and soil beneath it out
to 200 nautical miles from their coast, and in some cases, these nations
can claim sovereignty as far out as 600 miles, said Cmdr. James McMahon,
staff judge for the 17th District of the U.S. Coast Guard.

In the Arctic, however, scientists do not know where nations' continental
shelf ends and the international oceanic crust begins.

Without clear scientific data, many countries have been claiming more than
they can legally justify, Mr. Braun said. "If there are major offshore oil
fields in an area where we don't know who owns it, it is worth fighting to
ensure your nation's sovereignty, especially with oil prices coming back
up." Mr. Braun said.

The Coast Guard has teamed its icebreakers with other government agencies
to do seabed maps and has developed a strong working relationship with the
Canadian Coast Guard and Russian border guards in the Arctic, Cmdr.
McMahon said.

Mr. Balton said U.S. efforts are under way to define the shelf boundaries.


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