To drill or not to drill more in the Arctic?
Travel through the waters off the coast of Alaska can often be hampered by ice.
February 9th, 2012
06:33 PM ET

To drill or not to drill more in the Arctic?

At stake is nearly 30 billion barrels of oil. That's the amount of recoverable crude under the Arctic Ocean near Alaska, according to government estimates. Shell Oil hopes to begin drilling this year to tap into the reserves.

But environmentalists and researchers say more study is needed before Shell or any other company gets the go-ahead.

In late January, nearly 600 scientists sent a letter to President Obama and Interior Secretary Ken Salazar demanding the administration focus on the science of drilling in the area. They urged the president to consider a USGS report issued last summer that gave 62 “pressing needs,” the letter stated.

“There’s a great deal of national value at stake in the environment in northern Alaska,” said Pew Arctic science director Henry Huntington, who is based in Alaska.

Huntington said more studies need to be done of the species that live there, principally the fish.

“There have been very few scientific trawl surveys of fish in the Chukchi or the Beaufort (seas),” he said.

He mentioned the walleye pollock, a significant target of commercial fishermen. In 2008, they were discovered in the Beaufort during a survey by the National Marine Fisheries Service. The Alaska Daily News reported it was the first study of the Beaufort since the late 1970s. It also said the federal government had spent $60 million on research. Shell said it had spent more than $500 million.

Shell said there have been enough studies.

“A 100-year compendium of scientific data proves the Alaskan Arctic is one of the most studied regions in modern history,” Shell Alaska Vice President Pete Slaiby said in an editorial posted on the company’s website.

Alan Springer, a professor at the University of Alaska Fairbanks and one of the 573 signees of the letter to the White House, said that while there is still a lot to be studied, enough is known about the region and about drilling to block oil exploration.

“You always want to know more, that’s the nature of a scientist,” he said. “But we know enough to know it’s a bad idea.”

He is worried that a release of oil – a blowout at the well or a tanker accident – would be nearly impossible to deal with given the remoteness of the area, the distance to ports from proposed drilling areas, the lack of infrastructure and the vast expanses of sea ice.

“It’s covered with ice most of the year, which would be a huge obstacle,” he said.

Shell said it has assembled the necessary ships and equipment to deal with any accident. Slaiby also pointed out that “Shell and others have successfully drilled over 35 wells in the Alaska offshore without incident.”

Huntington and Springer also cited potential problems from noise pollution from passing ships, drilling equipment and airplanes, among other things that would be introduced to the seas. For instance, they said drilling would almost certainly change the migration paths of beluga whales, an endangered species, and potentially push them farther away from fishermen (there is an exemption for natives to hunt for subsistence reasons) who are constrained by geography.

Shell has received many of the permits needed to drill this summer but pending lawsuits by environmental groups prevent them from starting to dig.

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soundoff (10 Responses)
  1. Robin Molter

    I believe, we should drill for oil and reduce our dependence on foriegn countries. In addition, while we drill, we should explore other alternatives to energy and start using them. When the alternatives have been successfully put in place, we should then reduce or stop the drilling.

    February 25, 2012 at 1:43 pm |
  2. powderPUFF

    isnt enough been done to upset the planets delecate position in reguards to planetary pole shift, earthqtakes, ozone, im beginning to wonder if you the moderator isnt plain NUTS for asking I value giving my opinion to individuals who prey on HONEST PEOPLE who could be the person you see in the office personell and not realize i was a blog on CNN by all means have a nice day

    February 13, 2012 at 11:03 pm |
  3. Eyeball73

    I say we drill it...In 30 years when we REALLY need it for plastics, lubricants, etc. Besides, we have no more refining capacity and in 30 years we'll certainly have renewable resource ready vehicles.

    February 13, 2012 at 1:00 pm |
    • yahmez the mad

      It makes no sense to keep burning up a finite resource for energy. The oil would be better used in the future, as you said, to manufacture recyclable plastic goods. We already have superior synthetic lubricants, although as of yet they are still more expensive than oil based lubes.

      February 14, 2012 at 3:44 pm |
    • McKenzie

      What are you babbling about, sttehnyic oil has been around for 40yrs and is better than regular oil but not allowed to compete. A plane flew 24hrs on solar power and theres hydrogen cars, magnetic drive, photo cell etc. you are obviously ignorant of anything that requires reading or watching anything more intellectual (look it up) than BP adds or the Simsons.If I'm STUPID im surprised you can turn on your PC (personal computer).

      October 10, 2012 at 9:38 am |
  4. helenecha

    I believe that the scientists and businessmen should have found their mutual confidence in doing the job. Here is my question. The oil resource is limited. Does the drilling in the Arctic fit well for a long-term program in an own turf?

    February 12, 2012 at 10:55 pm |
  5. angel waddington

    I believe that this article was informative i think that if the funding is available the drilling should continue if the research is not done in the long run it may be a successful venture.

    February 11, 2012 at 12:07 am |
    • Salmata

      I agree that there was a great deal of drilling that was jfteiuisd by the high price of natural gas that has brought on new supply. But as I pointed out, the industry data shows massive depletion over the first year. That means that we need continued new drilling activity just to keep the supply from fallingAll production depletes. Shales deplete faste. In some wyas this is good. For a given BCF/well you get your shale gas faster. Anyway, the expected decline curve is priced into the well economics. When we say "this well is economic at $5" we are factiring in the expected production curve. The thing about the shale formations is they are (relatively speaking) "blanket" formations. You can "manufacture" gas from them. You just lay out a grid formation and drill a well every 40 acres. In the old days, you had to locate structures, etc. With shales you don't get dry holes. Wwhen the price is high enough, it's like printing money.That means that we need continued new drilling activity just to keep the supply from falling. But the incentive to drill new wells isn't there at $4.75 gas. While some of the early wells will do fine because their production was sold forward at a high price in the futures market, that option is no longer there for producers. Where you are right: if the price is not high enough production will decline.Whaere you are wrong: This means the price will be high enough. If gas production declines, and shortages ensue people will pay more for gas. Once prices are high enough we can drill the crap out of more shales.Hedging doesn't make you drill wells. If you have nymex contracts at above market prices are better off cashing them out than drilling sub-economic wells.That is my point. The easy natural gas from CBM is now gone and production is heading south in a hurry.Nope, there is plenty of CBM that is simply not getting drilled right now because shales are better (actually, because prices are lower technically). The exact same CBM wells sitting in the exact same CBM fields as were getting drilled 2 or 3 years ago. They just stopped their programs. Ready to drill.I don't think that we will have much drilling at $4 even if costs come down to $4. There is too much incentive for producers to keep as much in inventory as possible, particularly when shareholders are finally getting some understanding of the depletion issue.Again, if producers won't drill at $4, price won't be $4. Decline will set in, price will go up.I agree. But we already have some data and that is not as positive as the naive optimists believe. Well, I can't be responsible for what naive optimists believe. I can tell you more or less what I already have. The shales are a huge new plateau on the natural gas supply curve, if I had to guess at around $5 or $6. They will be the marginal source of supply to the market for many years to come.This is an old story. There has always been someone telling us about the abundant amount of oil and gas in the American shale formationsFail to see the relevance of "what someone has always been saying".I assure you people are out there drilling these wells and gas in coming out of them.The Barnett shale has already made a few billionaires. The Haynesville, Fayetteville and Woodford are well established. The Eagle Ford and Marcellus are growing dramatically as we speak. The Horn River has hit some big wells. Then there are 5 or 6 others getting attention as well. Mancos, Chattanooga, Utica, Antrim.Not even counting the Bakken, which is oil.We don't know how big this is going to be, but it's going to be big. The general projections I see are 5+ Bcfd for Haynesville and 5-10 Bcfd for Marcellus. I think Barnett is already doing 5 Bcfd.To put this in perspective, the Alaska gas pipeline (likely postponed indefinitely due to shale growth) is a 2 Bcfd project.

      May 22, 2012 at 5:39 pm |
  6. sam george

    It is a dream to drill from this region, hopefully we can.

    February 10, 2012 at 8:33 pm |
  7. lildeekayjayaye

    If they drill there its going to end up doing more harm than good. The planet is already biting us for the damage we have already done.

    February 10, 2012 at 4:50 pm |


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