Shell's US Arctic oil drilling starts, stops

Arctic waters are believed to be home to significant oil reserves, prompting Royal Dutch Shell PLC this week to start drilling the first new oil well in U.S. Arctic waters in more than 20 years -- but encroaching sea ice forced the drill ship off the site just a day later.

Despite its remote location and harsh climate, the Arctic is relatively rich in energy and mineral resources.  U.S. Arctic drilling occurred in the twentieth century, but no new wells have been drilled in the last two decades.  Shifting trends, including relatively high oil prices and a warmer Arctic climate (as evidenced by this summer's record low sea ice coverage in the Arctic), have increased the pressure on oil companies to expand Arctic production.

For the past six years, Shell committed about $4.5 billion to exploration for oil and gas reserves under the Outer Continental Shelf off Alaska.  Shell believes the region may host the largest untapped oil-bearing formation in the U.S., perhaps holding about 26 billion barrels of oil.  Environmental lawsuits and concerns over how any oil spill could be responded to have delayed Shell's drilling plans, but last month Shell obtained a permit from the federal Bureau of Safety and Environmental Enforcement to start preliminary drilling activities.  While the BSEE has not yet certified Shell's oil spill response barge, the preliminary permits allow the company to begin drilling pilot holes.

Last Sunday, crews aboard the Noble Discoverer began drilling at a site known as the "Burger" prospect in the Chukchi Sea about 70 miles off the Alaskan coast.  (Shell posted a Youtube video of the drill bit entering the water.) 

But even in a low-ice year, the Arctic climate is forbidding.  Yesterday, drilling stopped as sea ice approached the Noble Discoverer.  Reports indicated that a pack of ice about 12 miles wide, 30 miles long and up to 82 feet thick was about 105 miles away from the drill ship and drifting closer.  It may take several days for this ice pack to pass.

According to Shell, the Noble Discoverer will resume drilling once the ice moves on.  As the Arctic winter approaches, more and more ice should form in the Chukchi Sea.  Will Shell find the oil it expects?  Can it produce the oil safely in the icy Arctic?

Preparing for an ice-free Arctic?

As the Arctic climate changes, the possibility of an ice-free Arctic Ocean is looming.  In recent history, almost all of the Arctic Ocean is covered by sea ice in winter, and perennial ice persists throughout the year over much of the basin.  Arctic sea ice is now reducing in both volume and coverage.  Some predictions, including the National Oceanic and Atmospheric Administration (NOAA), suggest that based on observed 2007/2008 summer sea ice extents, the Arctic could be nearly sea ice free in summertime within 30 years.

Rainbow over Canada's icy St. Lawrence River near Petite-Riviere-Saint-Francois, Quebec.

Setting aside the root causes of these changes, Arctic nations are preparing for a less icy future.  Many stakeholders, like US Senator Lisa Murkowski of Alaska, believe that reduced ice cover over the Arctic could lead to future subsea resource discoveries.  Indeed, the Arctic sea floor is already known to be home to abundant energy resources including petroleum, natural gas, as well as metal and mineral deposits.  In addition, the ocean and sea bed are home to significant marine life.

Beyond opening up potential for underwater resource extraction, a reduction in ice cover could also open up commercial navigation across the fabled Northwest Passage or other routes.  This could reduce the cost of shipping goods across the globe, but could significantly increase marine traffic in the Arctic Ocean.

Arctic nations are gearing up for this possible future.  For example, Canada has ordered new icebreakers and offshore patrol boats, and the head of the Royal Canadian Navy has recommended increasing military staffing in the region.

What will the future hold for the Arctic?  Will perennial ice cover be significantly reduced within decades?  If so, what will it mean for the environments, economies, and national security interests of countries in the Arctic region?

July 7, 2010 - it's hot

Quick update today. It is hot in New England, and I have a few news stories that are thematically linked to the heat.

First, NOAA reports that warmer nearshore waters are drawing sharks closer to land in New England -- including the great white shark.

Second, speaking of hot: what if the world got hot enough to melt the polar ice caps? Check out this interesting Salon.com interview with Peter D. Ward, author of [i]The Flooded Earth: Our Future in a World Without Ice Caps[/i].

Following on yesterday's note of Earth First protests in Maine: three protesters of TransCanada's Kibby Mountain wind project expansion were arrested yesterday, one of whom attached herself to a truck hauling a windmill blade.

In rail news: Maine won $35 million in federal stimulus money for rehabilitation and expansion of Amtrak's Downeaster passenger train service to Brunswick, meaning there will soon be passenger rail from Brunswick to all points south and west.

June 21, 2010 - adventure and news

From the energy/adventure department: yesterday I went kayaking on Center Pond in Phippsburg, Maine. (Thanks to the Phippsburg Land Trust for helping conserve the lands and access!) Center Pond, like Winnegance, was originally a tidal salt marsh. It was dammed in 1883 to make an ice pond. Ice was big business along the lower Kennebec, as it was the principal source of refrigeration for the world, and the combination of clean fresh water and proximity to shipping made the Kennebec a busy place for shipping ice.

I had a great paddle, although I did get chased off by a powerful lightning storm that ended up knocking out power for a few hours.

From Energy Policy Update

Quick energy policy news: an editorial in today's Morning Sentinel about biomass energy. This article comes in the wake of recent studies suggesting that despite other analyses, biomass combustion does have carbon and climate impacts. Indeed, several recent studies have suggested that not only does biomass combustion emit long-term atmospheric carbon, but that increased harvesting will exacerbate the carbon imbalance. The editorial notes that in Maine, biomass for combustion has typically come from wood waste and thinnings, not wood suitable for use for pulp, fiber or lumber, and suggests a compromise that may include restrictions that require the use of wood waste and thinning, not higher value material.

This is consistent with a conversation I had this morning with a client. We were discussing biomass markets and the federal BCAP program. He told me that BCAP was responsible for a number of processors setting up chippers in the woods in order to participate in the incentive program, and that some of this BCAP-induced activity involved chipping wood that could have been used for fiber or lumber. I've heard similar accounts several times in the months since BCAP went live.