Sunday, April 23, 2006

Global Warming Sparks a Scramble for Black Gold Under Retreating Ice

By David Adam
The Guardian UK

Tuesday 18 April 2006

Unlike the Antarctic continent spread around the south pole, the Arctic has no formal international treaty to regulate activities. And while howling winds, drifting icebergs and months of freezing darkness kept prospecters at bay, there was little activity to regulate.

But as global warming thaws the ocean's icy layer, oil giants, shipping companies and even the odd enterprising tourist operator are casting their eyes towards the high north.

Last August a Russian vessel, the Akademik Fyodorov, became the first to reach the north pole without an icebreaker - one of seven ships to make it to the top of the world last year. This summer, Russian icebreakers aim to go one better and take paying guests, for £17,000 each. If the ice continues to thin and shrink as expected, then within a few decades cruise liners, container ships and tankers could all head over the pole, shaving thousands of miles off their voyages across the globe.

The biggest boom could be oil and gas. The US Geological Survey surprised some experts when it declared that a quarter of the world's undiscovered reserves lay under the Arctic Ocean. As the ice retreats, oil companies are scrambling to open a new frontier.

Bruce Evers, an analyst with the London firm Investec, says the big companies have no choice but to investigate the Arctic. "If they think there is oil and gas there then they absolutely can't ignore it," he says. "If there is going to be an Arctic Klondike rush then they will want to be there along with every other Tom, Dick and Harry. They can't afford to sit and watch the others explore and come up with some huge discoveries."

Attempts to open up the Arctic national wildlife refuge in Alaska to drilling remain deadlocked in the US Congress, but several companies have dipped more than a toe in the chilly Arctic Ocean further north. BP Amoco is developing an Alaskan offshore oil deposit called Northstar and the Norwegian company Statoil is working on a gasfield some 90 miles across the frozen Barents Sea from its most northerly outpost, Hammerfest. Called Snow White, the project is expected to start pumping liquefied natural gas to the US and Europe next year.

The jewel in the Arctic energy crown is the Shtokman field, also in the Barents Sea. Some 300 miles off the Russian Arctic coast and 10 times the size of Snow White, it is the largest offshore gas reservoir in the world. The Russian energy giant Gazprom is poised to announce partnerships with other companies to drill up to 120 wells.

"It's an unfortunate fact of life that the climactically benign and politically stable areas are running out of oil and gas," Mr Evers said. "So in politically stable areas like the Arctic there's going to be a substantial amount of interest."

That interest is already turning up the diplomatic heat, and there are a growing number of territorial disputes between the eight countries with a claim to the Arctic: Russia, the US, Canada, Norway, Denmark, Sweden, Finland and Iceland.

A dispute between the US and Canada over rights to shipping lanes through the North-West Passage flared up again this year, with Canada promising to step up its military presence to protect what it regards as its territory and the US sees as international waters. Norway and Russia are squabbling over the Barents Sea, while Denmark is eyeing the north pole itself.

International law allows a country to claim the seabed up to 350 miles off its coast, which is judged from the edge of its continental shelf. Existing surveys show that no country's shelf extends far enough to give it a claim on the pole, so a neutral area around it is administered by the International Seabed Authority. To get round this, Denmark is trying to prove that Greenland - a Danish territory - is connected to a 1,100-mile underwater ridge that stretches towards the pole. Launching the effort in 2004, the Danish science minister, Helge Sander, said it was to give Denmark access to "new resources such as oil and natural gas". Canada and Russia are trying to make similar claims and it could take years to sort out.

Environmental campaigners are viewing the creeping development of the Arctic with mounting concern. Norway announced last month that it will limit drilling in some areas to protect fragile ecosystems. The 31-mile exclusion zone in the Barents Sea has large supplies of fish. But the embargo expires in 2010 and drilling elsewhere is being stepped up, with the granting of 13 oil and gas licences to 17 companies.

Stephanie Tumore, a climate campaigner with Greenpeace, said: "Haven't we learnt anything? Why are we going looking for more fossil fuels when what's happening in polar regions just proves that it is devastating and we cannot continue to do that?"

The Consequences: Precarious Region

Wildlife

The Arctic is home to hundreds of species of mammals, birds and fish found in few, if any, other places on Earth. Polar bears, musk oxen and caribou are joined each summer by snowy owls, ducks and swans that migrate there to nest. Some of the hardiest organisms discovered live within the ice, helping to make the region a unique ecosystem. Now, 1,000sq miles of Arctic tundra on Alaska's North Slope is home to one of the world's largest industrial complexes, with 28 oil production plants, 4,800 exploration and production wells, 1,800 miles of pipes and 500 miles of roads.

Sea Ice

Global warming has lead to an increase in melting of Arctic sea ice and in one study last year, scientists predicted that 4m sq miles of permafrost could shrink to 400,000 sq miles by 2100, disrupting ocean currents, releasing huge amounts of carbon into the atmosphere and causing havoc to roads and buildings across Canada, Alaska and Russia.

Mineral Exploration

The melting of Arctic sea ice has made the region more accessible to shipping, and oil and gas companies keen to prospect for natural resources. Some estimates suggest that one quarter of the planet's untapped fossil fuels, including 375bn barrels of oil, lie beneath the Arctic, and industry experts talk of a "black gold rush" as companies clamour to exploit the reserves. Off Norway's north coast, the state oil company, Statoil, is engaged in project Snow White, which workers believe will generate £34bn in liquefied natural gas over the next 30 years.

Pollution

Spillages and leaks add to the environmental damage caused by oil extraction and, according to the Natural Resources Defence Council (NRDC), between 1996 and 2004, there were 4,530 spills of more than 1.9m gallons of diesel, oil, acid and other chemicals along the Alaskan border alone. Last month, hundreds of thousands of litres of crude oil gushed into the Arctic Ocean from a corroded 30-year old BP pipeline. The NRDC says there is at least one leak from an oilfield or pipeline every day.

Tourism

Global warming is also opening up the Arctic to tourism, with shipping companies offering voyages to the north pole. Previously, only well-equipped icebreakers would have been able to attempt the trip.



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UK Scientists Attack Oil Firms' Role in Huge Arctic Project
By David Adam
The Guardian UK

Tuesday 18 April 2006

Sixty-country survey to search for fossil fuels in pristine environment.

British scientists are at loggerheads with US colleagues over a controversial plan to work alongside oil companies to hunt for fossil fuel reserves in the Arctic.

The US Geological Survey is lining up a project with BP and Statoil to find oil and gas in the Arctic Ocean, under the auspices of a flagship scientific initiative intended to tackle global warming.

But the head of the British Antarctic Survey, which coordinates UK activity at the poles, has said he is "very uncomfortable" with the idea and has questioned its ethical and scientific justification.

Tackling climate change and working out how it will affect the Arctic and Antarctic is a central theme of International Polar Year (IPY) - a high-profile project to start next spring that involves thousands of scientists from 60 countries.

The Arctic is warming twice as fast as the rest of the planet and last September saw the lowest extent of sea ice cover for more than a century. Scientists say the temperature there could rise by a further 4C-7C by 2100, and the Arctic Ocean could be ice-free in summer by 2060.

Documents on the IPY website show that BP and Statoil, a Norwegian company, are "significant consortium members" on a USGS proposal to assess "energy resources in the circumarctic area including oil, gas, coalbed methane and methane hydrates". Geologists estimate that a quarter of the world's undiscovered oil and gas reserves lie under the Arctic, and analysts have predicted a 21st-century goldrush to tap them as the Arctic Ocean's ice cover retreats.

Chris Rapley, the director of the British Antarctic Survey, said: "I would be very uncomfortable with a project that simply was out to log the hydrocarbon reserves of the Arctic as a geological activity. I don't think that fits very comfortably within either the scientific guidelines or the ethical underpinning of the IPY."

Launching the polar year initiative last month, Professor Rapley said the scientists would work on projects "that will tackle the urgent environmental issues" because "rapid climate change is already impacting local peoples ... and it is only a question of time before the wider consequences become apparent."

The Inuit people have filed a lawsuit against the US government claiming that greenhouse gas pollution is damaging their livelihoods. Experts have warned the only realistic way to prevent dangerous climate change is to curb carbon dioxide emissions from burning fossil fuels.

The USGS proposal has been approved by scientists organising the IPY, but Prof Rapley plans to question its suitability at a committee meeting this week in Cambridge. "If it was in the context of how are we going to manage the inevitable move towards extracting these resources from the Arctic in a sustainable and environmentally friendly way then I think that would be fair game," he said. "There is an argument that it is much better to work with companies that are considering how to exploit these resources rather than taking a somewhat prissy position. But there are some things that are ethically in, and some that are ethically out."

Suzanne Weedman of the USGS said: "This is very much a part of what we do. Our responsibility is to assess the undiscovered oil and gas using geological information." She said the plan built on a project called the Arctic Energy Assessment, which is part of its World Energy Project - a global attempt to map untapped hydrocarbon fuel reserves. Oil companies including ExxonMobil, Amoco, Conoco, Texaco and PetroCanada are listed as members.

Ms Weedman said oil companies had helped fund the World Energy Project - which had a budget of $2m (£1.1m) last year - but insisted they had no say on how the money was spent and had not been involved in research. No company had contributed funds directly to the Arctic Assessment, though some had donated data as in-kind support. "If you look at the objectives of International Polar Year, one of them is to assess the impact of these changes on people who live in the Arctic. Knowing about the energy resources might be very interesting because there is the potential of development in the Arctic. That's not for us to decide, but it is the reality."

A Statoil spokesman said: "It is not unnatural that our kind of contribution is close to our activity, and that is finding and developing resources." The company was working on a gasfield in the Barents Sea, he said, but it had "no concrete actions" elsewhere in the region.

BP said it was not using the research to prospect in the Arctic and that geological surveys could be misleading: "Very often it's intended to get you an indication, not necessarily of oil in a particular place, but what there might be in adjacent areas. You only find oil and gas if you actually drill."

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