The Contradictions of Oil Exploration and Climate Policy

Last week, President Obama gave conditional approval to allow Shell Oil to start drilling for oil off the coast of Alaska, starting this summer. The decision represents a major victory for the petroleum industry which praises the economic benefits this will bring for the country, while it is a crushing defeat for the environmental community who sees this decision to drill for oil as a threat to surrounding marine ecosystem and exacerbating the issue of climate change.

13wed2-master675On Monday May 11, the US gave the approval for Shell to start drilling in the Arctic. The Interior Department justified its approval by explaining that this was conditional on Shell’s receiving approval of state and federal drilling permits for the project. The Federal government authorized exploration in waters of a maximum depth of 140 feet (those defending the project claim it is safer as it is considerably shallower than the 5,000 feet depth at which the catastrophic Deepwater Horizon spill occurred).

For Shell, which has invested about $6 billion into its offshore Alaskan exploration program without completing a single well, this is close to a gamble. The company has its eye on the estimates of recoverable oil which, in the Chukchi and nearby Beaufort Sea, range as high as 30 billion barrels of oil (about four years’ worth of consumption in the United States).  Local trade representatives, also see this as an opportunity to strengthen economic ties between Seattle and Alaska, and do not agree with the decision by local environmental groups to protest the arrival of Shell’s Arctic drilling rigs. However some industry leaders disagree with Shell’s vision that this is a good economic opportunity. Indeed, the chief executive of French oil company Total, Patrick Pouyanné, expressed doubts about drilling for oil in the Alaskan Arctic given that oil prices had virtually been cut in half in recent months from $100 to $50.  In an interview with the NYTimes he stressed that the decision did “not make any sense,” explaining that “these are high-cost resources” and therefore an oil spill “could be very detrimental for the reputation of a company.”

DRILLINGWEBFor environmentalists like Bill McKibben, the co-founder of 350.org – an international climate campaign that works in 188 countries around the world – giving Shell Oil the go-ahead to drill in the Arctic shows the reluctance of the US government to curb the supply of the fossil fuel industry and the environmental impacts of the actions of this industry. Indeed, a research letter published by the journal Nature stressed that in order to keep to the international voluntary target of keeping a global temperature rise to 2 degrees Celsius so as to avert some of the worst outcomes of climate change, “all Arctic resources should be considered as unburnable.” To find out more about this study please visit our previous blog on the issue available here. Climate change could not be more topical, as the Washington Post recently revealed findings by Nasa confirming that the planet has just experience the warmest four months on record, dating back to 1880. With such findings in mind one would expect a slowdown in the oil industry’s activities. The irony today is that 25 years after initial warnings that continued fossil fuel burning could melt the Arctic, the fossil fuel industry has ignored these warnings, enhanced its activities, and is now applying to be the first to drill further in an area which has become accessible thanks to global warming and the same melting Arctic ice!

Putting aside arguments about the impact of this activity on climate change, the environmental community is also concerned about the difficult conditions for drilling posed by the area, which could make it difficult to contain an oil spill. Being located in an extremely remote area, with no roads connecting to major cities or deepwater ports within hundreds of miles, the site makes it difficult for cleanup and rescue workers to reach in case of an accident.  The weather itself is also extreme, with major storms, icy waters and waves up to 50 feet high. With these conditions in mind, a spill would therefore have disastrous effects on the local marine biodiversity which is particularly diverse in this area, the sea being a major migration route and feeding area for marine mammals, including bowhead whales and walruses.

So where do this leave the credibility of President Obama’s environmental agenda?

Shortly before President Obama’s decision to approve the drilling in the Arctic, he sent his Secretary of State John Kerry to attend a meeting of the Arctic Council – an international organization created to foster cooperation in the region. During the event, Mr. Kerry outlined what he called an ambitious set of goals, focused on ocean safety and security, economic development and, in particular, several steps to address climate change as part of President Obama’s push for stronger international action. He went as far as to stress “The Arctic Council can do more on climate change”. Environmental groups such as Earthjustice, a nonprofit public interest law organization, see the contradiction in the government’s actions with regards to allowing the drilling go ahead stressing that “This decision places big oil before people, putting the Arctic’s iconic wildlife and the health of our planet on the line”.

It cannot be denied that President Obama’s environmental agenda has promised a lot more for transitioning his country away from its reliance on fossil fuels his recent predecessors. His new regulations on coal-fired power plants for example will help, as will his rules on fuel efficiency for cars and trucks (see our previous blog dated June 2014 for more information on this issue). However, if we are to achieve the urgent action on climate change that the international community (and the US) has demanded, then it will simply not be sufficient to try and change the demand levels for the fossil fuel industry. The government needs to send a clear, unambiguous message, to the oil industry compelling it to reduce supply by leaving oil reserves in the ground. And that decision rests at the executive level of the country.

Disappointingly, the White House, acting on its own through executive actions that bypass Congress, continues to study the approval of the Keystone XL pipeline, despite environmental reports cautioning against the project. For the environmental community, the Arctic drilling approval awarded by the government, therefore means that it is once again up to civil society to add enough pressure to successfully block the plan.

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