Arctic Oil Rush Poses Environmental Risks And Challenges

As the Arctic ice sheet melts away to a record low level this summer, oil companies are rushing in through newly opened shipping routes to stake claims and explore previously inaccessible areas for new drilling possibilities.

A subsidiary of Russia's state-controlled energy giant Gazprom this month set up that country's first fixed platform in the Arctic. Located in the southwestern Barents Sea, it aims to drill year-round and ship crude back to the northern city of Murmansk in tanker ships.

That has brought out Greenpeace protest boats in the past week with activists who have chained themselves to the workers' transport ships and to the oil platform to call attention to the risks of drilling for oil in icy waters.

Among them was Greenpeace Executive Director Kumi Naidoo, who told Reuters the protests call attention to the fact it is not possible to clean up an Arctic oil spill.

"This is a peaceful attempt by us as Greenpeace to try to bring some sanity and some urgency, to get Gazprom, Shell, and other companies that are thinking about drilling in the Arctic to stop, to reconsider and understand the consequences of that action that will destroy our children's and grandchildren's future," Naidoo said.

Ocean physicist Peter Wadhams, head of the Polar Ocean Physics Group at Cambridge University, says environmental damage from an Arctic oil spill like BP's 2010 Deepwater Horizon disaster would remain for decades in a kind of "ice-and-oil sandwich."

"If you have the sort of thing that happened in the Gulf of Mexico -- a blow out from the sea bed -- while there is sea ice moving overhead, then the oil and gas produce a layer of oil on the bottom of the ice. And then, new ice grows underneath that oil in a kind of sandwich," Wadhams said.

"So what you could get would be a huge area of ice flows that are oiled, but the oil is hidden. Research shows that the oil reappears in the following summer when the ice flow starts to melt. The oil comes to the surface and is released into the environment. And it still retains its toxicity."

Exploratory Wells

Making matters worse, Wadhams says the technology used to clean up the Deepwater Horizon spill would be useless in Arctic ice because "there is no known way of getting rid of the oil."

"We simply don't have any way of dealing with oil blow outs under ice. So any kind of drilling in ice covered waters is very dangerous. In this case of the Gulf of Mexico, there were unexpected problems because the oil was not coming to the surface, but staying at depth," Wadhams said.

"But at least it was in the water column. Some of it was dissolving in the water. Some of it could be dispersed and collected. But in the case of oil in the Arctic, once the oil comes up and hits the bottom of the ice you can't get at it."

Out of all the earth's surface that has not yet been explored for oil and natural gas deposits, about 30 percent is in the Arctic.

Wadham says it is the thawing of the Arctic ice sheet during the summer that is allowing oil firms to start exploring those previously unreachable areas.

Last year, Norway's Statoil and France's Total made the first commercial discoveries of oil and gas in the Barents Sea in more than a decade.

This year, Royal Dutch Shell is attempting to drill two exploratory wells -- one in the Beaufort Sea northeast of Alaska and another in the Chukchi Sea between Alaska and Siberia. By the end of 2013, Shell hopes to finish 10 new offshore wells in Arctic waters.

The Russian Arctic remains largely unexplored, with most geological information from the region dating back to Soviet times.

But the Russian government has been taking steps to help state-controlled Rosneft and Gazprom boost investment for developing offshore Arctic oil and natural gas fields.

In April, after a government decree lifted all export duties for new projects in the Arctic shelf, Rosneft and ExxonMobil unveiled an exploration partnership that seeks to develop three Arctic fields with 15 sea platforms built in Arctic waters of the Kara Sea north of Siberia.

Vladimir Rozhankovsky, head of research at Nord Capital in Moscow, says Arctic oil exploration is vital to sustaining Russia's long-term status as one of the world's top oil producers.

But Timofei Krylov, a Russian oil sector analyst who helped draft Rosneft's program to develop offshore oil fields, argues that it is simply not cost-effective to build ice-resistant fixed oil platforms in Arctic waters.

Evidence of the high price of developing polar energy resources came on August 29, when Gazprom announced it was shelving a project to develop the vast Shtokman gas field in the Arctic Sea, citing the cost.