Promise and Hazards of Arctic Oil Outlined at D.C. Forum

With two of Shell’s rigs now crossing the Pacific in hopes of drilling in the Chukchi Sea this summer, officials and energy experts gathered at a forum in Washington this week to review the rewards and challenges ahead for Arctic oil development.

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Jan Mares, an energy policy advisor and former Homeland Security official, says the prize is within the industry’s technical reach.

“The U.S oil potential, off-shore in our Arctic, seems to be about 44 billion barrels of oil equivalents, in less than 100 meters of water. That’s actually pretty shallow, by oil and gas development offshore,” he said.

Mares contributed to a report released last week by the National Petroleum Council that says the country must start developing the Arctic now so its oil will be available once shale oil production in the Lower 48 declines. Mares, echoing the report’s findings, says well-control technology has improved greatly since the Deepwater Horizon spill in the Gulf of Mexico. Even if it fails, Mares says, equipment would be available to stop the flow of oil.

“The first one that would be the most significant in terms of reducing any possibility is what’s called a subsea shutoff device. I’ll show a picture of that in a minute,” he said. “The second one would be a capping stack.”

Former Deputy Interior Secretary David Hayes says the shallow waters of the Chukchi may make some aspects of drilling easier, but in the Arctic it also means more ice scour and it limits the kind of support vessels you can bring in. Hayes emphasized other challenges, too. With all the headlines about the receding ice in the Arctic, Hayes says some don’t realize it’s seasonal. The operating season in Alaska’s far north is short, maybe 90 days.

“And this is something that’s frankly a little hard to digest but we are looking at potentially drilling and potentially producing in a region that is mostly ice-bound most of the year,” said Hayes, who, as the No. 2 at Interior, played a major role in granting Shell’s permits to conduct exploratory drilling three years ago.

He says operators would have to stop drilling before the end of the season “so that if there is a spill, there’s time to address it before the ice comes, because there’s no technology known to be able to clean up a spill effectively in icy water.”

Even with a season that short, Hayes says, there may be interruptions.

“You also have intrusion issues,” he said. “When Shell had their program in the summer of 2012 they had to get off the Chukchi well because a huge iceberg was heading right for it, and they had to move off, lose a week or two, then move back.”

Willie Goodwin, a former mayor of Kotzebue, was the only Alaskan on the panel. Goodwin was unimpressed by talk at the forum about clean-up equipment and technology.

“You know, for me as a hunter, you’ll never convince me that you’re going to clean it up,” he said.

Goodwin’s main message at the forum, hosted by Washington think tank Resources for the Future, was that policymakers should have more meaningful consultation with local Inupiat.