Arctic Oil/Gas Neg



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1NC- No infrastructure


No transportation infrastructure for the plan- too dangerous

Kemp et al ’12 [Geoffrey Kemp and Tim Boersma are fellows at Real Clear World and Nicholas Siegel is program officer at the Transatlantic Academy in Washington, DC., 1-5-12, http://www.realclearworld.com/articles/2012/01/05/is_geopolitical_competition_over_the_arctic_exaggerated_99828.html]

Slowly but surely, climate change is opening up the Arctic. Greenland's glaciers and ice fields are melting, sea ice around the North Pole is decreasing each year, and the huge permafrost areas of Russia and Canada are beginning to thaw. This has led to widespread speculation of a Great Game-style scramble for the region's abundant resources. Many studies, including those by the private sector and the U.S. Geological Survey, confirm that there are vast treasure-troves of oil, gas, and minerals in the Arctic. Yet, with the exception of iron ore in Greenland, these resources have not yet been exploited. In fact, despite rising temperatures, the impediments to extracting and transporting most resources from the Arctic will remain formidable for the foreseeable future. One factor facing developers is that, despite global warming, the Arctic remains largely inhospitable, and there are innumerable obstacles to cashing in on its riches. Oil rigs require airstrips, roads, electricity generation, and pipelines; mining operations require port facilities and technology to withstand the bitterest winters; and all resource extraction requires a specialized labor force. For the private sector to develop any part of the Arctic, enormous investments of capital and labor would be necessary.



While there is a possibility that the Arctic seaways -- running through Canada and along the northern Russian coast -- will become open to transportation for most of the year, large container ships are unlikely to use these routes. The Arctic will remain a dangerous trade route for commercial shipping, and neither Canadian nor Russian authorities can offer much in the way of support and rescue facilities in the event of emergencies along their northern borders. The dangers are further evidenced by recent investments in traditional sea routes and facilities, such as the Panama Canal. By contrast, the port of Reykjavik in Iceland, which would be ideally positioned to serve as a future hub for northern sea routes, has seen no such investment. In the long run, permafrost thawing may prove to be the greatest obstacle to Arctic developers. It has made the construction of roadways and airfields much more difficult, and in some cases has caused extractive projects to be abandoned. This process has already caused enormous problems in Russia, where large cities such as Yakutsk and several large river ports, pipelines, conventional hydro electricity plants, and even a nuclear power station lie in permafrost areas. Yakutsk in particular has seen severe damage to its infrastructure and the closure of a runway of its airport as a result of the land below melting.

Lack of porting sites kills solvency- too hard to build there


Cottrell ’13 [Paula, Alaska Business Monthly, “Arctic Infrastructure Needed for Resource Development and Delivery,” January, http://www.akbizmag.com/Alaska-Business-Monthly/January-2013/Arctic-Infrastructure-Needed-for-Resource-Development-and-Delivery/]

Arctic development is going to require ports and infrastructure statewide,” says Sen. Mark Begich. “Development on this scale will have substantial impacts on Arctic communities and the whole state.”¶ This infrastructure—airports, roads, ports, pipelines and facilities—presents some unique challenges in the Arctic. “There is a lot of shallow water along the Arctic coastline,” says Henry Huntington, Arctic science director of Pew Environment Group, a nonprofit organization that works to establish science-based policies. “This presents some serious limitations on what kind of vessels can be used.” Deepwater ports, while clearly a necessity, aren’t ideally suited for the soft shorelines in the Arctic, he says. “There are no areas along the Arctic Coast that are suitable for a real harbor or port,” says Huntington. “Everything is exposed and shallow.”



Arctic drilling is too expensive

Klare ‘12 [Michael T. Klare. Author and Professor of Peace and World-Security Studies, Hampshire College. Why Twenty-First Century Oil Will Break the Bank -- and the Planet. 03/13/12. http://www.huffingtonpost.com/michael-t-klare/obama-gas-prices_b_1342042.html?ref=green]

Arctic Oil The Arctic is expected to provide a significant share of the world’s future oil supply. Until recently, production in the far north has been very limited. Other than in the Prudhoe Bay area of Alaska and a number of fields in Siberia, the major companies have largely shunned the region. But now, seeing few other options, they are preparing for major forays into a melting Arctic. From any perspective, the Arctic is the last place you want to go to drill for oil. Storms are frequent, and winter temperatures plunge far below freezing. Most ordinary equipment will not operate under these conditions. Specialized (and costly) replacements are necessary. Working crews cannot live in the region for long. Most basic supplies -- food, fuel, construction materials -- must be brought in from thousands of miles away at phenomenal cost. But the Arctic has its attractions: billions of barrels of untapped oil, to be exact. According to the U.S. Geological Survey (USGS), the area north of the Arctic Circle, with just 6 percent of the planet’s surface, contains an estimated 13 percent of its remaining oil (and an even larger share of its undeveloped natural gas) -- numbers no other region can match. With few other places left to go, the major energy firms are now gearing up for an energy rush to exploit the Arctic’s riches. This summer, Royal Dutch Shell is expected to begin test drilling in portions of the Beaufort and Chukchi Seas adjacent to northern Alaska. (The Obama administration must still award final operating permits for these activities, but approval is expected.) At the same time, Statoil and other firms are planning extended drilling in the Barents Sea, north of Norway. As with all such extreme energy scenarios, increased production in the Arctic will significantly boost oil company operating costs. Shell, for example, has already spent $4 billion alone on preparations for test drilling in offshore Alaska, without producing a single barrel of oil. Full-scale development in this ecologically fragile region, fiercely opposed by environmentalists and local Native peoples, will multiply this figure many times over.

We need an icebreaker now


National Research Council 14 (National Research Council – of the National Academies, “Responding to Oil Spills in the U.S. Arctic Marine Environment”, National Academies Press, 2014)

Recommendation: As oil and gas, shipping, and tourism activities increase, the USCG will need an enhanced presence and performance capacity in the Arctic, including area-specific training, icebreaking capability, improved availability of vessels for responding to oil spills or other emergency situations, and aircraft and helicopter support facilities for the open water season and eventually year round. Furthermore, Arctic assignments for trained and experienced personnel and tribal liaisons should be of longer duration, to take full advantage of their skills. Sustained funding will be needed to increase the USCG presence in the Arctic and to strengthen and expand its ongoing Arctic oil spill research programs.


Lack of infrastructure dooms oil spill response


National Research Council 14 (National Research Council – of the National Academies, “Responding to Oil Spills in the U.S. Arctic Marine Environment”, National Academies Press, 2014)

The lack of infrastructure in the Arctic would be a significant liability in the event of a large oil spill. Communities are dependent on air and seasonal marine transport for the movement of people, goods, and services, and there are few equipment caches with boom, dispersants, and in situ burn materials available for the North Slope and Northwest Arctic Boroughs. It is unlikely that responders could quickly react to an oil spill unless there were improved port and air access, stronger supply chains, and increased capacity to handle equipment, supplies, and personnel. Prepositioning a suite of response equipment throughout the Arctic, including aerial in situ burn and dispersant capability, would provide immediate access to a number of rapid response oil spill countermeasure options. Building U.S. capabilities to support oil spill response will require significant investment in physical infrastructure and human capabilities, from communications and personnel to transportation systems and traffic monitoring. Human and organizational infrastructure improvements are also required to improve international and tribal partnerships so as to leverage scientific and traditional knowledge and best practices. A truly capable end-to-end system for oil spill response would require integration of Arctic data in support of preparedness, response, and restoration and rehabilitation. There is presently no funding mechanism to provide for development, deployment, and maintenance of temporary and permanent infrastructure. One approach to provide a funding mechanism for infrastructure development and oil spill response operations would be to enable a public-private-municipal partnership to receive a percentage of lease sale revenues, rents, bonuses, or royalty payments that are currently deposited in the federal treasury.

Fossil Fuel Production Declining

Production declining


Bastasch 6/24

Michael Bastasch (writer for Daily Caller), 6/24/2014, “Three-Fourths of Fossil Fuel Production Loss On Federal Lands Under Obama”, http://dailycaller.com/2014/06/24/three-fourths-of-fossil-fuel-production-loss-on-federal-lands-under-obama/, 6/25/2014, #TheNextPKen



Since 2003, production of coal, gas and oil on federal lands has fallen by 21 percent, according to government data. But nearly three-quarters of that declined occurred since 2009 — under the watch of the Obama administration.¶ The Energy Information Administration reported last week that total fossil fuel energy production on federal lands declined for the third year in a row, despite a slight uptick in onshore oil production last year.¶ Federal lands fossil fuel production declined 21 percent from 2003 to 2013, reports EIA, mainly due to “a steady decline in federal offshore natural gas production between FY 2003 and FY 2013 and the 9% drop in coal production from federal lands in FY 2013 from FY 2012.”¶ But 15.5 percent of the 21 percent decline has occurred since 2009, when President Obama took office. This means that nearly three-quarters of the decline in fossil fuel production on federal lands has occurred under Obama’s watch.¶ Oil production on federal lands did actually increase slightly last year, but falling coal and natural gas production meant that government-controlled lands saw a 7 percent decrease in fossil fuels production. This was also accompanied by a 7 percent decrease in the sales of fossil fuels from federal and Indian lands.¶ Republicans have hammered the president for blocking off large areas of federal lands and offshore areas to energy development such as oil and gas drilling. Reports of decreasing sales and production numbers on federal lands only served to intensify Republican criticisms of the administration’s energy policy.¶ “American families cannot afford four-dollar gasoline prices, but instead of increasing access to our own energy resources right here at home, President Obama is placing them off-limits,” Washington Republican Rep. Doc Hastings said in a statement.¶ “The Obama Administration is restricting American energy production wherever and whenever possible and these new numbers from EIA are further proof of that,” Hastings added. “President Obama has imposed a defacto drilling moratorium on new offshore drilling, canceled both onshore and offshore lease sales, and imposed layer upon layer of red-tape to make it harder to develop our energy resources.”¶ But while federal lands have seen a decreasing share of fossil fuels production, state and private lands have seen energy production boom — particularly the oil and gas industry.¶ Hydraulic fracturing, or fracking, and horizontal drilling have allowed companies to access shale formations deep underground which has dramatically increased U.S. oil and gas production, making the U.S. the world’s largest fossil fuels producer.¶ Production on federal lands, however, has not kept pace with that of state and private lands. One reason is because of the favorable geography of states in terms of where shale formations are located.¶ Another reason is policy. It’s much easier to get approval to drill on state and private lands versus federal lands. On federal lands, for example, getting a permit approved for drilling took 194 days on average last year as opposed to five days in Texas and 25 days in North Dakota.

AT Drilling Inevitable

Drilling not inevitable- companies giving up and court decisions recall leases


Peresh 14

Peresh, Dave. "Judge Suspends Arctic Drilling, Orders New Environmental Report." Los Angeles Times. Los Angeles Times, 24 Apr. 14. http://www.latimes.com/nation/nationnow/la-na-nn-arctic-drilling-new-environmental-report-20140424-story.html

The decision by U.S. District Judge Ralph Beistline stopped short of scrapping the $2.6 billion in leases, however. His ruling followed an appeals court decision in January that federal officials had arbitrarily decided drilling companies could extract 1 billion barrels of oil from the shallow waters off the northwest coast of Alaska. That figure led to a misguided environmental study, the U.S. 9th Circuit Court of Appeals said.¶ Now, the U.S. Department of the Interior must redo the supplemental analysis using what’s expected to be a much higher estimate for the amount of oil extractable. In the meantime, no drilling for oil or natural gas can take place.¶ U.S. Sen. Mark Begich (D-Alaska) called the order “good news," saying it “should lead to resumption of oil and gas development in our state’s promising offshore” by next summer.¶ Earth Justice attorney Erik Grafe, who opposes drilling and who helped bring the lawsuit, also hailed the decision. The opposing sides had worked for the past two months to negotiate a deal, which the judge adopted almost completely.¶ Grafe told the Los Angeles Times the redo was a “good outcome,” considering that the erroneous figure of 1 billion barrels “infected every part of the original analysis.”¶ He said the new report would likely show that oil companies would bring far more boats, planes, drill rigs and pipelines. As a result, he expects the analysis to show a much greater disturbance to the habitat of whales, walruses, polar bears and other animals. ¶ In light of the new analysis, the Bureau of Ocean Energy Management will have to decide whether to move forward with or cancel the agreed-upon leases with Royal Dutch Shell, ConocoPhillips and other companies.¶ “We’re hopeful the government will come to the conclusion that it’s wrong to sell the leases,” Grafe said. “I’m not sure how long it will take for the new study, but the government has a lot of work ahead of itself. It’s a big opportunity for the government to choose a better path in the Arctic.”¶ The Bureau of Ocean Energy Management declined to comment. The agency has maintained that the 1-billion-barrel estimate made economic sense because the oil companies have said drilling in the area is a major technical challenge.¶ A week after the January ruling, Shell abandoned exploration efforts in the Arctic for the rest of this year.

Drilling in the Arctic isn’t inevitable


GAO 14 (United States Government Accountability Office, “MARITIME INFRASTRUCTURE: Key Issues Related to Commercial Activity in the U.S. Arctic over the Next Decade”, Report to Congressional Requesters, March 2014)

Diminishing sea ice has contributed to promising prospects for oil and gas in the U.S. Arctic17 and created growth potential for commercial shipping on trans-Arctic routes that are geographically shorter than current shipping routes through the Panama or Suez Canals. However, industry representatives we spoke with from five key industries— commercial shipping, cruises, commercial fishing, oil, and miningstated that their level of commercial activity in the U.S. Arctic is expected to remain limited over the next 10 years due to a variety of contributing factors. Factors included general challenges related to operating in the Arctic such as geography, extreme weather, and hard-to-predict sea ice movement,18 and other industry-specific factors. Table 2 provides some examples of contributing factors cited by industry representatives. Recently, oil companies have made some investments to develop offshore oil resources in the U.S. Arctic. These development efforts, however, are generally on hold and increases in oil exploration activity are expected to be limited. The impact of oil exploration activity on the levels of maritime traffic appears uncertain.


Drilling in the Arctic not inevitable in squo


GAO 14 (United States Government Accountability Office, “MARITIME INFRASTRUCTURE: Key Issues Related to Commercial Activity in the U.S. Arctic over the Next Decade”, Report to Congressional Requesters, March 2014)

Recently, oil companies have invested in initial exploration for offshore oil resources in the U.S. Arctic.29 Three major oil companies that hold offshore leases in the Beaufort and Chukchi Seas are in the exploration phase of their sites and may still be decades away from production, according to industry representatives.30 One company began drilling two exploratory wells in 2012, with 25 vessels supporting these drilling operations, which increased the destinational maritime traffic that season.31 However several well-publicized incidents halted operations.32 None of the three companies chose to conduct exploratory offshore drilling for the 2013 drilling season, but instead conducted site-surveying activities such as “bathymetric” mapping.


Arctic too fragile to drill in, neither US or private sector has the safety assurances to drill


Ritzman 14 Dan Ritzman is Alaska program director for the Sierra Club, February 17, 2014, “Guest: Shell, the U.S. not prepared for risks of drilling in Arctic Ocean”, http://seattletimes.com/html/opinion/2022914154_danritzmanopedarcticdrilling18xml.html

America’s Arctic is a place like no other. Its unique conditions — extreme weather, long periods of darkness and its remoteness — make it both harsh and fragile. It’s a place often underestimated, especially when it comes to drilling for oil in the Arctic Ocean. Take Shell Oil for example. The company has spent years and billions of dollars trying to drill in America’s Arctic seas. Despite the company’s assurances of safety, it has been made clear again and again that Shell is not prepared for the risks posed by the icy waters. In 2012, the company failed to even get all of its equipment in place. Its oil-spill-containment dome failed during testing, its Kulluk drilling ship ran aground, and the company ended up owing more than $1 million in pollution fines. It drilled no oil. Apparently learning nothing from that experience, Shell announced a plan to return to the Arctic Ocean this summer, only to have its leases invalidated by a federal court because the company vastly underestimated the environmental risks. Shell’s decision not to drill in the Arctic this year is good news, but the threat of drilling remains and we cannot afford to downplay the risks of drilling to the Arctic environment and to our climate any longer. The reality is that drilling in the Arctic Ocean comes with a distinctive set of risks to the environment and would-be drillers. History has shown that where there is drilling, there is spilling. This year marks 25 years since the Exxon Valdez oil tanker ran aground, and oil can still be found on Southcentral Alaska beaches. Oil spills in the Arctic would cause irreparable damage and be impossible to clean up. The risks extend beyond a devastating oil spill. Drilling in the Arctic Ocean could release enough carbon pollution to negate efforts to fight global warming and dramatically alter our climate. The pollution from oil-drilling activities would coat Arctic ice surfaces with black, heat-absorbing soot, further speeding the melting of ice in a place that is already warming at twice the rate of the Lower 48 states. The chain of reactions would continue because the Arctic acts as a refrigerator for the Northern Hemisphere. The effects of melting Arctic ice can already be seen in rising sea levels in coastal areas from New Orleans to Miami and in a sharp global increase in extreme weather events, according to the National Oceanic and Atmospheric Administration’s recently released Arctic Report Card. The Obama administration needs to take advantage of Shell’s absence this year to finally do a full environmental assessment of current leases, an assessment that looks deeper than the best-case scenario to risks that are far more likely. An effective climate strategy would require the administration to cancel lease sales tentatively scheduled for 2016 and 2017. The United States must lead an effort to begin keeping fossil fuels in the ground, especially in risky, remote and fragile places like the Arctic Ocean. The U.S. should set an example for countries like Russia and China that are looking to exploit the Arctic’s dirty energy even as the world looks to combat climate change. It’s time for America to look beyond an “all-of-the-above” energy policy. I have been fortunate in my life to spend time in Arctic Alaska. I’ve watched walrus gather on ice floes, bowheads breach in ice-filled waters and polar bears prowl the ice edge. I have traveled with Alaska Natives, who have lived on these lands and waters for hundreds of generations, and I have seen the importance of these animals to their culture and subsistence. A major spill would leave oil in these waters for decades, killing wildlife and bringing to an end Alaska Natives’ ancient way of life. The Arctic is the last place we should be drilling for oil. Cleaner energy and transportation options are here now. Their capacity to help shape a better future should not be underestimated.

No drilling in Arctic in 2014


AP 14 January 30, 2014, “Oil Drilling On US Arctic Coast Put On Ice”, http://bigstory.ap.org/article/shell-4q-earnings-fall-74-percent”

AMSTERDAM (AP) — Oil companies' rush to find reserves off Alaska's Arctic shores suffered a setback on Thursday after Shell said it would suspend its operations in the regionand possibly withdraw for good. Royal Dutch Shell PLC is the main company to have purchased leases for oilfields off Alaska's Arctic shores, but its attempts to drill have been halting due to technical and legal hurdles. While other companies are still seeking to exploit deep-water Arctic fields nearby in Canada, Shell's troubles may indicate that the difficulties outweigh the potential economic benefits. "We will not drill in Alaska in 2014, and we are reviewing our options there," Shell CEO Ben van Beurden told reporters in London. Shell received a negative Federal court decision last week. Environmentalists are still challenging whether the government's 2008 decision to open the area to exploration was correctly granted in the first place: it is covered by sea ice for much of the year. Asked whether Thursday's retreat means the project is finished, Van Beurden said that depends in part on how the ongoing lawsuit proceeds. Environmental activists cried victory. "Shell's Arctic failure is being watched closely by other oil companies, who must now conclude that this region is too remote, too hostile and too iconic to be worth exploring," Greenpeace International Arctic oil campaigner Charlie Kronick said in a reaction. Jacqueline Savitz, the U.S. chief of the Oceana conservationist group, said Shell's retreat shows that offshore drilling in the Arctic is "simply not a good bet from a business perspective." Shell's troubles in Alaska are only the most visible in a series of setbacks for the company in the U.S., and Van Beurden hinted he won't prioritize investments there in the future. While oil prices remain high globally, "North America natural gas prices and associated crude markers remain low, and industry refining margins are under pressure" Van Beurden said. Last month, Shell said it was scrapping a $20 billion dollar project to develop an onshore natural gas-to-diesel facility in Louisiana. Van Beurden's predecessor, Peter Voser, spent billions building up the company's portfolio of U.S. shale properties to $26 billion, only to write $2 billion off their value last summer. "Yes, we went into North America in a big way. You could argue that we went a little bit too far too soon. But we are where we are," Van Beurden said. He described the North American shale market as "a different game, a very efficient market, and the sort of pressures you have there are therefore fundamentally different from what you would have in places like Russia, Argentina." Still, Shell's Arctic misadventures stand out. After purchasing licenses for $2.1 billion in the Chukchi sea off Alaska's coast in 2008, Shell began preliminary drilling in the summer of 2012. But it was unable to get far after difficulties deploying an oil containment system it had on standby in the event of a spill. Then was forced to retreat because of approaching winter ice. Then one of its rigs was damaged while being transported on Dec. 31, 2012, and no drilling took place in 2013. CFO Simon Henry said Thursday Shell wrote around $1 billion off the value of its Alaskan business in 2013. "The group's exploration near the North Pole cost billions of dollars and generated reams of negative press - yet not a single drop of oil has been pumped" said Garry White, Chief Investment Correspondent at British brokerage Charles Stanley. "Like the mining sector, capital discipline has been lacking at the major oil groups and there is pressure from shareholders to cut back investment to improve cash flows," he said. "Shell appears to be listening." Van Beurden said Shell will cut spending by $9 billion this year and is targeting $15 billion in asset sales. Investors generally cheered the company's plans, and shares were up 2 percent at 26.27 euros in early Amsterdam trading. Van Beurden's strategy "is pretty much what we believe the market wanted to hear," said Investec analyst Neill Morton in a note. But Morton predicted further writedowns of Shell's North American shale assets. Shell's reported fourth quarter net profit of $1.78 billion (130 billion euros), down 74 percent on the $6.73 billion reported a year earlier. The big fall was due to higher production costs, lower production, and worse refining margins. The swing was also exaggerated by one-off items during the two periods. Production was down 5 percent to 3.25 million barrels per day.

Drilling not inevitable – Shell proves


Mufson 14 (STEVEN MUFSON - a staff writer covering energy and other financial news, “Shell says it won’t drill in Alaska in 2014, cites court challenge”, The Washington Post, 1/30/2014)

The decision by Shell’s new CEO to suspend Arctic Ocean drilling in 2014 was both sensible and inevitable,” said Lois Epstein, Arctic program director for the Wilderness Society. “The Arctic Ocean has proven to be logistically challenging for drilling and mobilization, and a bottomless pit for investment.” Shell did not drill off Alaska last year either. Jacqueline Savitz, vice president for U.S. oceans at the conservation group Oceana, said, “Shell is finally recognizing what we’ve been saying all along: that offshore drilling in the Arctic is risky, costly and simply not a good bet from a business perspective.” Shell has shelved plans to build a multibillion-dollar plant to turn natural gas into diesel fuel. It has spent about $7 billion to acquire shale assets in the states but last year wrote down the value of those by about $2 billion. The company also suffered production cuts in Nigeria because of political unrest there. For Shell, van Beurden said, “2014 will be a year where we are changing emphasis, to improve our returns and cash-flow performance.” He said the company would sell about $15 billion in assets this year. Shell has spent nearly $6 billion buying leases and preparing to drill for oil in the Chukchi and Beaufort seas, but efforts have been plagued with regulatory delays, controversy over environmental impact, safety concerns, litigation and equipment mishaps. Shell sent rigs to drill in the area in 2012, but the company got a late start after struggling to bring its drilling vessels in line with permit requirements. Then it had to deal with unexpected summer ice flows and decided to install only the top of wells in the Chukchi Sea because it was running out of time to drill before open-water season ended. Later that year, one of its vessels, the Kulluk, was damaged when it ran aground on its way to warmer waters. The company said it will be scrapped. “It’s frustrating to be put in this position, as we felt we were making solid progress towards a 2014 program,” said Shell’s Smith. Smith said that the company had improved its Arctic spill-containment system, bolstered logistics and management, replaced the damaged Kulluk rig with the semi-submersible Polar Pioneer rig, upgraded capabilities for the Noble Discoverer rig and added two tow vessels, larger offshore supply vessels and a third anchor handler. “This is a very, very complex operation,” van Beurden said. “It is complex because of obviously the conditions that we face in Alaska. It is complex logistically. It is actually not that complex geologically and from a reservoir perspective, but of course it is also an area that has a lot of other complexities.” Despite the setbacks in Alaska, investors cheered Shell’s earnings briefing Thursday. The stock rose 1.2 percent, to 71.35.


Negative environmental effects stop Shell from drilling in the arctic


Rosen 1-30

(Rosen, Yereth. Journalist of the Alaska Dispatch. "Shell calls off 2014 oil exploration in Alaska's Arctic waters." Alaska Dispatch. Alaska Dispatch, 30 Jan. 2014. Web. 28 June 2014.)ʕっ•ᴥ•ʔっ♥eve

Royal Dutch Shell’s new chief executive said Thursday the company is shelving its Alaska exploration program, at least for this year. An appeals court ruling that faulted federal regulators’ environmental analysis of Chukchi Sea oil development has created “substantial obstacles” to Shell’s plan to drill exploration wells this year in that remote region off northwestern Alaska, the company said in a statement.“This is a disappointing outcome, but the lack of a clear path forward means that I am not prepared to commit further resources for drilling in Alaska in 2014,” Shell’s new CEO, Ben van Beurden, said in the statement. “We will look to relevant agencies and the court to resolve their open legal issues as quickly as possible.”

Suspension of Alaska exploration was described by Shell as part of a strategy to cut costs and focus on improved return on investments. The company said it plans to reduce capital spending in 2014 to $37 billion from the $46 billion spent in 2013. The company also said it will “increase the pace” of its asset sales, expected to total $15 billion in 2014 and 015. Shell also suspended drilling in Alaska's Arctic in 2013, not long after a series of mishaps with its drill rig Kulluk. Environmental groups hailed the move. Greenpeace International Arctic oil campaigner Charlie Kronick, in a particularly strongly-worded release, called Shell's work in the Arctic thus far a "mistake of epic proportions" and a "failure," and called on the company to go a step further and permanently scrap its Arctic ambitions: "The only wise decision at this point is for Mr. Van Beurden to cut his company's losses and scrap any future plans to drill in the remote Arctic ocean," he said.


Exxon not likely to drill in the arctic after past failures


Helmen 5-19

(Helman, Christopher. Journalist of Forbes Magazine. "Will Exxon Have The Guts To Drill Deep In The Arctic?." Forbes. Forbes Magazine, 19 May 2014. Web. 28 June 2014. .)ʕっ•ᴥ•ʔっ♥eve

Exxon Mobil XOM -0.8% affiliate Imperial Oil has submitted plans to drill for oil in the iceberg-strewn waters of the Canadian Arctic (this story in the WSJ talked about it today). The spot would be about 110 miles northwest of Tuktoyaktuk. The well could reach a depth of more than 24,000 feet. Drilling could take three years, given the fact that work is limited to the 120-day summer window when that section of the Beaufort Sea is relatively iceberg free. Environmental groups are concerned, of course, that the short drilling season would limit the ability of Exxon to cope with catastrophe, such as a blowout and oil spill. It’s a fair concern. Deeper wells bring the higher risks of intense pressures and temperatures that overwhelm even the most robust drilling tools. Even before drillbit touches rock, there’s a host of hurdles to overcome in the Arctic — hurdles that Shell Oil has stumbled over again and again in pursuing its own ill-fated arctic drilling dreams on the U.S. side of the Beaufort. Furthermore, there’s the question of whether Exxon is even up for drilling a complex, ultradeep well in a frontier region. The company has begun to shy away from such risky stuff in recent years — preferring to leverage its gargantuan balance sheet and project management skills bring known hordes of oil and gas to market, rather than look for new ones. After all, the last time Exxon attempted an ultradeep well, it chickened out. As I recounted in this 2010 Forbes Magazine story, back in 2005 Exxon spent $210 million attempting to drill the Blackbeard prospect in the Gulf of Mexico. Though located in the shallow waters of the shelf, the Blackbeard target was ultradeep. After going down 30,670 feet, the high pressures and gas intruding into the well bore became too much for Exxon to handle. Lacking tough enough equipment, it abandoned Blackbeard. At the time it was considered to be the most expensive dry hole ever.

Environmental concerns curb oil companies arctic drilling plans


Krauss 13

(Krauss, Clifford. Journalist of The New York Times."ConocoPhillips Suspends Its Arctic Drilling Plans." The New York Times. The New York Times, 10 Apr. 2013. Web. 28 June 2014. .)ʕっ•ᴥ•ʔっ♥eve



HOUSTON — ConocoPhillips announced on Wednesday that it was suspending its plans to drill in Alaskan Arctic waters in 2014 because of uncertainties over federal regulatory and permitting standards.

Add to Portfolio The decision had been expected after last month’s announcement by the Interior Department that Shell Oil Company would have to provide a detailed plan addressing numerous safety issues before it could resume its drilling operations in Alaska’s Chukchi and Beaufort Seas. Shell was forced to remove its two drilling rigs from the area and send them to Asia for repairs after a series of ship groundings, weather delays and environmental and safety violations during the 2012 drilling season. Shell, which has spent more than $4.5 billion on its exploration program, also called off its drilling program for this year. “While we are confident in our own expertise and ability to safely conduct offshore Arctic operations, we believe that more time is needed to ensure that all regulatory stakeholders are aligned,” Trond-Erik Johansen, president of ConocoPhillips Alaska, said in a statement. The statement cited a recent Interior Department report calling on the oil industry and federal government to coordinate efforts to develop standards for drilling, maritime safety and emergency response systems and equipment for the Arctic region. ConocoPhillips said it welcomed working on that approach with the government before drilling. The company has 98 leases in the Chukchi Sea’s Outer Continental Shelf, a region that oil company geologists say has the potential to produce billions of barrels of oil in the coming decades. “Once those requirements are understood, we will re-evaluate our Chukchi Sea drilling plans,” Mr. Johansen said. Environmentalists have long opposed drilling in Arctic waters, arguing that it cannot be done safely because of powerful ice floes, winds and long periods of darkness, and that it would disturb the habitats of many threatened species including polar bears. “ConocoPhillips has made a good choice,” said Michael LeVine, a lawyer for the environmental group Oceana. “As we’ve learned again and again, operating in Alaskan water demands preparation, care and attention to details companies have not yet proven able to provide.” Senator Lisa Murkowski, an Alaska Republican who sits on the Energy and Natural Resources Committee, expressed disappointment but said she understood that the decision was necessary. “Companies can’t be expected to invest billions of dollars without some assurance that federal regulators are not going to change the rules on them almost continuously,” she said. “The administration has created an unacceptable level of uncertainty when it comes to the rules of offshore exploration that must be fixed.” The Norwegian company Statoil had already announced that it was putting off its plans to drill in the Alaskan Arctic waters from 2014 to 2015. The Interior Department’s review, completed in early March, concluded that Shell had failed in a broad range of operational and safety tasks, including the towing of one of the two drilling rigs, which ran aground on an Alaskan island on New Year’s Eve. David Lawrence, the executive vice president who was in charge of the Alaska drilling program, recently left the company. The company said that the departure was “by mutual consent.”

Oil drilling on US Arctic coast put on ice


Sterling 1-30

(Sterling, Toby. Journalist of Associated Press "Oil drilling on US Arctic coast put on ice." The Big Story. Associated Press, 30 Jan. 2014. Web. 28 June 2014. .)ʕっ•ᴥ•ʔっ♥eve

AMSTERDAM (AP) — Oil companies' rush to find reserves off Alaska's Arctic shores suffered a setback on Thursday after Shell said it would suspend its operations in the region — and possibly withdraw for good. Royal Dutch Shell PLC is the main company to have purchased leases for oilfields off Alaska's Arctic shores, but its attempts to drill have been halting due to technical and legal hurdles.While other companies are still seeking to exploit deep-water Arctic fields nearby in Canada, Shell's troubles may indicate that the difficulties outweigh the potential economic benefits." We will not drill in Alaska in 2014, and we are reviewing our options there," Shell CEO Ben van Beurden told reporters in London. Shell received a negative Federal court decision last week. Environmentalists are still challenging whether the government's 2008 decision to open the area to exploration was correctly granted in the first place: it is covered by sea ice for much of the year. Asked whether Thursday's retreat means the project is finished, Van Beurden said that depends in part on how the ongoing lawsuit proceeds. Environmental activists cried victory. "Shell's Arctic failure is being watched closely by other oil companies, who must now conclude that this region is too remote, too hostile and too iconic to be worth exploring," Greenpeace International Arctic oil campaigner Charlie Kronick said in a reaction.


Oil spill in the Arctic could be catastrophic- need for high standards


Gosden 12

(Gosden, Emily. Journalist for the telegraph "Overcoming challenges of Arctic oil drilling." The Telegraph. Telegraph Media Group, 30 Sept. 2012. Web. 28 June 2014 .)ʕっ•ᴥ•ʔっ♥eve

Drilling for oil and gas has always been a risky business. The world’s precious hydrocarbon resources are rarely found in convenient locations; overcoming technical, political and environmental challenges is part of the job. But last week Christophe de Margerie, chief executive of French oil giant Total, broke ranks. When it came to the Arctic Ocean, he declared, the risk of a spill was simply too high. While many of his peers clearly disagree with his assessment that drilling for oil should not proceed, few would dispute the unique risks of the fragile region. For the environment and the companies involved, a spill in the Arctic could be catastrophic. In the Alaskan Arctic, where Royal Dutch Shell began drilling offshore last month, temperatures drop to minus 20 degrees celsius in summer. Gale force winds move giant ice floes – Shell’s drilling rig has already had to get out of the way of one block bigger than Manhattan. And in winter, when daylight lasts barely a few hours, sea ice forms, makes the region inaccessible. “The drilling conditions facing oil companies operating in the Arctic are some of the most challenging on Earth,” Greenpeace argues. “The hostile weather, freezing conditions and remote location present unprecedented challenges for dealing with a spill.”

AT Drilling Inevitable- BS Specific

Beaufort oil won’t come until 2020 Chuckchi not before 2022


EY 2013 Ernst & Young Global Oil and Gas Center, consulting company for the energy sectors, “Arctic Oil and Gas” 2013 http://www.ey.com/Publication/vwLUAssets/Arctic_oil_and_gas/$FILE/Arctic_oil_and_gas.pdf

The Beaufort Sea has the advantage of having relatively shallower water, and it is closer to the Trans-Alaska Pipeline System (TAPS) infrastructure, while the Chukchi Sea is deeper water and farther from existing infrastructure. The first oil from the Beaufort Sea could come as early as 2020, while the first oil from the Chukchi Sea is unlikely before 2022. Notably, the operator and owners of TAPS are eager to identify the new supplies that will be needed to keep the line economic. TAPS currently operates at less than half its total capacity, as North Slope production has declined. Much of the Arctic’s oil and gas resources remain unexplored due to various concerns such as climate change and the impact of development on the Arctic environment. However, some companies are planning to proceed with oil and gas drilling. For example, after a long, arduous process, Royal Dutch Shell has recently received approval from the Environmental Protection Agency (EPA) to drill oil and gas exploration wells in the Beaufort and Chukchi seas, and in mid-February 2012, Shell received approval of its spill contingency plan from the Department of the Interior’s Bureau of Safety and Environmental Enforcement. Shell planned to begin drilling in the summer of 2012, but drilling has been postponed to summer 2013. These will be the first offshore wells in the US Arctic region.


No Solvency- Infrastructure

The cost of mitigating Arctic conditions for infrastructure is too high


GAO 14 (United States Government Accountability Office, “MARITIME INFRASTRUCTURE: Key Issues Related to Commercial Activity in the U.S. Arctic over the Next Decade”, Report to Congressional Requesters, March 2014)

Geographic and construction challenges can affect the development of infrastructure in the Arctic, challenges that often result in more complex and costly design and construction. According to engineers we spoke with, although the engineering capabilities and technology exist, engineers in Alaska have to account for unique geographic challenges, which include the following.

Permafrost: In northern Alaska, engineers have to address melting permafrost—the thawing of the soils underneath structures and roads. The melting of permafrost can be mitigated by using special designs, but at a high cost. For example, in Nome, as shown in figure 5, a hospital was built on a special foundation above the ground so that the building’s warmth would not melt the permafrost underneath.

Coastal erosion: Coastal erosion is a result of stronger waves that are occurring at an accelerated rate with the diminishing sea ice. Erosion also increases at the shoreline as a result of permafrost melt and could contribute to higher waves around ports and affect pilings or other port infrastructure. These challenges can be mitigated by efforts such as strengthening the shoreline. See figure 5. As with roads and buildings, there are ways to mitigate the Arctic conditions, but they are costly.

The USFG needs to develop infrastructure in order to solve


GAO 14 (United States Government Accountability Office, “MARITIME INFRASTRUCTURE: Key Issues Related to Commercial Activity in the U.S. Arctic over the Next Decade”, Report to Congressional Requesters, March 2014)

CMTS, the federal interagency coordinating committee tasked with addressing various Arctic maritime infrastructure issues, includes member agencies with differing missions and objectives. The identification, prioritization and vetting of Arctic maritime infrastructure plans and near term actions for federal agencies were important steps to addressing Arctic maritime infrastructure needs. Given the level of uncertainty around the development of the Arctic and the challenges and high costs to developing Arctic maritime infrastructure, it is important that federal agencies with responsibility for infrastructure components incorporate Arctic maritime infrastructure priorities and identified actions into their agency’s overall planning and investment decisions. Furthermore, since implementing recommended actions is at the discretion of the agencies and the Arctic Report is considered a “living document” with potentially changing priorities and actions, monitoring agencies’ progress in addressing recommended actions is an important step in planning, developing, and investing in Arctic maritime infrastructure. Effective monitoring will help ensure that CMTS member agencies continue to address Arctic maritime infrastructure as a coordinated effort with a shared understanding of current priorities and actions needed.


Costs of drilling in Arctic up to 500% more expensive than land-based projects


GAO 14 (United States Government Accountability Office, “MARITIME INFRASTRUCTURE: Key Issues Related to Commercial Activity in the U.S. Arctic over the Next Decade”, Report to Congressional Requesters, March 2014)

Largely due to the above factors, maritime infrastructure development in the Arctic is generally considered to be more expensive than similar construction in the continental United States. During our interviews with Arctic stakeholders with expertise in engineering and construction, we heard estimates of higher costs for Arctic maritime infrastructure components that ranged from 15 percent to 500 percent higher than for infrastructure constructed in the contiguous states. However, according to USACE officials, data do not exist to show specifically how much more expensive Arctic construction would be for different types of infrastructure projects. For an accurate civil construction cost estimate in Alaska, for example, the USACE would typically develop a customized estimate based on the infrastructure needed. This type of estimate depends on the specifics of the project’s scope, including project design, location, availability of qualified labor, time of construction, and other factors.


Infrastructure limits solvency – carries environmental risk and causes expense


EY 2013 Ernst & Young Global Oil and Gas Center, consulting company for the energy sectors, “Arctic Oil and Gas” 2013 http://www.ey.com/Publication/vwLUAssets/Arctic_oil_and_gas/$FILE/Arctic_oil_and_gas.pdf

Limited existing infrastructure: new “Greenfield” development will be very expensive and carry large environmental risks, and special equipment will be required (such as special tankers and ice-breakers), with long supply lines and with supply/logistical issues compounded by the harsh climate.


No Solvency- Icebreaker

The Coast Guard needs icebreakers to provide basic shipping support


Larter 10 (David Larter – writer for Navy News, “Commandant: Icebreakers key to Arctic presence”, Navy Times, 11/7/2010)

The Coast Guard's top officer says the service does not have the resources to respond to a major emergency in the Arctic and is calling for funding to repair or replace its two broken heavy icebreakers. "We need icebreakers up [in the Arctic], and right now our icebreakers are in a sorry state," Coast Guard Commandant Adm. Bob Papp said in an Oct. 28 interview. "They need replacement or very thorough renovation to allow the United States to sustain an active presence and support our sovereignty up there." The need for icebreakers in the Arctic stems from the rapid disappearance of ice in those waters. More water means more shipping traffic through the Bering Strait and other Arctic waterways. It also means massive untapped mineral reserves will be available to nations that border the Arctic, including the U.S. and Russia, creating a rush to stake sovereignty claims. The mission of protecting U.S. sovereignty and its citizens and shipping should fall to the Coast Guard, Papp said. "That's our responsibility," he said. "It's water — we're concerned about there being more water and more activity on the water; it's clearly a Coast Guard responsibility. "So, I feel the need to advocate for restoring our icebreakers or replacing them." The service's heavy icebreakers, Polar Star and Polar Sea, have both been sidelined. The Coast Guard announced in July that Polar Sea had suffered an engine breakdown and would likely be out of service until January engine breakdown and would likely be out of service until January. Polar Star is undergoing repairs and renovation and will out of service until 2013. As a result, Papp said, the Coast Guard is suffering a brain drain of sorts, losing institutional knowledge about icebreaking operations. "Because of the condition of the icebreakers, we are rapidly losing that expertise, and we don't have the resources to respond up there to a major emergency," he said. In addition to increased shipping traffic, Papp said as the ice recedes, standard Coast Guard services such as search-and-rescue missions will be required. "I foresee greater numbers of fishing boats, even recreational boats going up there," he said. "And we even have residents there already in towns such as Barrow [at Alaska's northern tip]. "[These are people] who need to be supported by Coast Guard resources. We don't have the resources right now." Papp said the Coast Guard had been evaluating what resources he would need to support an Arctic mission, but he noted that sending current assets up there presented a "zero-sum game." "If I were to put resources up there, it would have to come at the expense of another place," he said.

Increase in transit requires an increase in icebreaker technology


Guidon 13 (Samantha Guidon - a graduate student at University of Pennsylvania studying Environmental Policy, graduated from Union College in Schenectady, New York, in the spring of 2012 with a BA in Environmental Policy, “What Is the Current State of Arctic Sea Ice and What’s in Store?”, Consortium for Ocean Leadership)

The United States currently has only one icebreaker, the U.S. Coast Guard Cutter Healy, which is mission-ready for the Arctic. Yet transit—via maritime commerce, tourism, and energy exploration—within and through the Arctic will increase, whether or not there are enough ice-capable ships able to assist them in an emergency. This fact raised questions about U.S. ship capabilities, especially because icebergs will still be around and posing risks even without historical sea ice levels. While the U.S. does have a strong Arctic maritime presence, there is plenty of room to increase that presence in the future.

Ice distribution moots navigation and oil exploration based solvency


Higgenbotham and Grosu May 14 John Higgenbotham, senior fellow at the Centre for International Governance Innovation and Carleton University, and Martina Grosu master’s graduate in international public policy of Wilfrid Laurier University’s School of International Policy and Governance “The Northwest Territories and Arctic Maritime Development in the Beaufort Area” May 2014 CIGI Policy Brief http://arcticjournal.com/sites/arcticjournal.com/files/cigi_pb_40.pdf JDI14 LabBKG

Ice distribution in the melting Arctic is a serious new challenge for the territory. While the extent of the ice is decreasing, ice distribution and the unpredictability of ice conditions are increasingly posing serious challenges to navigation (and oil exploration) in traditionally accessible shipping channels. Ice and record-low levels of water in the Mackenzie River have posed yet another challenge to resupply and resource development support in the last few years. In addition, equipment to remove ice from small harbours and along the Mackenzie is scarce

Unsafe – ice pilot regulations


Higgenbotham and Grosu May 14 John Higgenbotham, senior fellow at the Centre for International Governance Innovation and Carleton University, and Martina Grosu master’s graduate in international public policy of Wilfrid Laurier University’s School of International Policy and Governance “The Northwest Territories and Arctic Maritime Development in the Beaufort Area” May 2014 CIGI Policy Brief http://arcticjournal.com/sites/arcticjournal.com/files/cigi_pb_40.pdf JDI14 LabBKG

Safe shipping in the arctic also requires skilled and experienced ice pilots to navigate ships through ice covered waters . According to some experts, current requirements to become “ice pilots” are low.3 Canada does not have an Arctic marine pilot authority that would enforce stronger and more formal qualifications for ice pilots, which is a serious safety gap

Harsh climate limits solvency


EY 2013 Ernst & Young Global Oil and Gas Center, consulting company for the energy sectors, “Arctic Oil and Gas” 2013 http://www.ey.com/Publication/vwLUAssets/Arctic_oil_and_gas/$FILE/Arctic_oil_and_gas.pdf

Harsh climate: The intense cold for much of the year, long periods of near-total darkness, the potential ice-pack damage to offshore facilities, the marshy tundra dictating seasonal activity in many areas and the limited biological activity all will take a huge toll on equipment and personnel.


No Solvency- Uncharted

No solvency – areas aren’t charted


Higgenbotham and Grosu May 14 John Higgenbotham, senior fellow at the Centre for International Governance Innovation and Carleton University, and Martina Grosu master’s graduate in international public policy of Wilfrid Laurier University’s School of International Policy and Governance “The Northwest Territories and Arctic Maritime Development in the Beaufort Area” May 2014 CIGI Policy Brief http://arcticjournal.com/sites/arcticjournal.com/files/cigi_pb_40.pdf JDI14 LabBKG

Arctic charting needs radical improvement, particularly in specific areas that are the most used now and — it is expected — in the future. At the moment, only about 10 percent of Canadian Arctic waters have modern, accurate and reliable charts. According to Arctic charting specialists, it is not necessary to chart 100 percent of Canadian Arctic waters; given modern GPS and other technology, an additional 10 percent of charting of the most utilized Arctic areas, particularly the Beaufort Sea, would be more than enough for safe shipping in the Arctic.2 To identify which areas need to be better charted, charting specialists must collaborate with shipping and resource development industries that work regularly in Arctic waters, and consider new Arctic projects in the coming decades that might require new corridors and passages.

No Solvency- Long Timeframe

Long timeframe for solvency


EY 2013 Ernst & Young Global Oil and Gas Center, consulting company for the energy sectors, “Arctic Oil and Gas” 2013 http://www.ey.com/Publication/vwLUAssets/Arctic_oil_and_gas/$FILE/Arctic_oil_and_gas.pdf

With the drawn-out time lines, the risk of cost overruns increases dramatically. The investment cycle will necessarily be long and gaining funding for these types of projects may prove challenging in the current economic climate.

Canadian regulations and drilling processes have long timeframes


Callow 12 Lin Callow, LTLC Consulting, “Oil and Gas Exploration & Development Activity Forecast: Canadian Beaufort Sea 2012-2027” prepared for Beaufort Regional Enviornmental Assessment Aboriginal Affairs and Northern Development Canada April 2012 http://www.beaufortrea.ca/wp-content/uploads/2012/04/Beaufort-Sea-OG-activity-forecast-2012-2017.pdf

KAVIK-AXYS (2008) provided a hypothetical shortest duration Beaufort Sea offshore development timeline based on a review of regulatory approval processes, hypothetical development scenarios and input from industry experts. They estimate the licencing and seismic exploration phase of an offshore development to take a minimum of 3 years. 3.2 DRILLING PROGRAMS While seismic surveys can identify targets of interest, drilling is required to confirm the presence or absence of hydrocarbons. An NEB Operations Authorization (OA) is required to undertake drilling operations for petroleum resources in the offshore area as required by the Canada Oil and Gas Operations Act (COGOA). In addition, individual well approvals from the NEB are required to drill a well (ADW) or to alter the condition of a well (ACW). Prior to the NEB issuing an OA, environmental screening must be completed under the IFA, the Canadian Environmental Assessment Act (CEAA), and COGOA. Further, the Applicant would need to demonstrate financial responsibility to the satisfaction of the NEB, and the NEB needs to have notification that a Benefits Plan prepared by the Applicant has been approved by AANDC or the requirement for it waived. KAVIK-AXYS (2008) estimated the exploration and delineation-drilling phase of a Beaufort Sea offshore development to take a minimum of 3 years. However, since a single offshore deep-water well may take 3 years to drill, this phase of an offshore development may be considerably longer.


Long timeframe – high costs – best estimate 2016-2018 for drilling and only 1-2 platforms by 2027


Callow 12 Lin Callow, LTLC Consulting, “Oil and Gas Exploration & Development Activity Forecast: Canadian Beaufort Sea 2012-2027” prepared for Beaufort Regional Enviornmental Assessment Aboriginal Affairs and Northern Development Canada April 2012 http://www.beaufortrea.ca/wp-content/uploads/2012/04/Beaufort-Sea-OG-activity-forecast-2012-2017.pdf NOTE: “Timeframe of this report”: 2012-2027

There are currently no suitable drilling platforms for these shallow wells located in the Canadian Beaufort Sea. Thus either an existing Arctic drilling platform will have to be brought into the Beaufort Sea from another jurisdiction, or a new shallow water Arctic drilling platform will have to be commissioned. Due to the scarcity and high cost of such Arctic drilling platforms, it is again expected that only 1 or 2 will be used in the Beaufort Sea during the timeframe of this report. If a suitable Arctic drilling platform can be located and transported to the Beaufort Sea, this could be accomplished faster than commissioning a new one. Therefore, it is predicted that the first shallow water drilling platform will commence operations by 2016, with a second commencing drilling in 2017 or 2018. As history has shown, shallow water Beaufort Sea wells could be drilled from artificial islands, caisson structures or spray ice islands. However, the timeframe for drilling a well using one of these drilling platforms, is unlikely to be much before 2016 as industry has indicated that no AO applications to do so are currently being considered.

Filing requirements kill timeframe and solvency


Callow 12 Lin Callow, LTLC Consulting, “Oil and Gas Exploration & Development Activity Forecast: Canadian Beaufort Sea 2012-2027” prepared for Beaufort Regional Enviornmental Assessment Aboriginal Affairs and Northern Development Canada April 2012 http://www.beaufortrea.ca/wp-content/uploads/2012/04/Beaufort-Sea-OG-activity-forecast-2012-2017.pdf

The NEB report and filing requirements, resulting from the Public Review of Arctic Offshore Drilling have the potential to affect the type and level of oil and gas industry activity in the Beaufort Sea. Industry representatives expressed concern that the NEB Same Season Relief Well Policy could significantly impair exploration of the deeper waters of the Beaufort Sea. The same-season relief well capability requirements have been in place since the 1970s and the NEB in re-affirming the policy, provided the context and intent of the policy, and articulated the policy in its report and companion Filing Requirements. However, the NEB’s requirement that any company applying for an offshore drilling authorization, “demonstrate how they would meet or exceed the intended outcome of our policy” (NEB 2011a,b), is expected to create regulatory and financial uncertainty as industry attempts to address the policy. This will likely increase the timelines for application preparation and regulatory review.

Even after licenses have been released delays are still inevitable


Callow 12 Lin Callow, LTLC Consulting, “Oil and Gas Exploration & Development Activity Forecast: Canadian Beaufort Sea 2012-2027” prepared for Beaufort Regional Enviornmental Assessment Aboriginal Affairs and Northern Development Canada April 2012 http://www.beaufortrea.ca/wp-content/uploads/2012/04/Beaufort-Sea-OG-activity-forecast-2012-2017.pdf [EL = Exploration License]

EL holders have delayed filing offshore drilling applications, while they participated in the NEB Public Review of Arctic Offshore Drilling, and awaited guidance to be issued by the Board pursuant to its review. Such delays are expected to result in some current offshore EL holders seeking extensions to the timelines for their exploration work commitments.

AT: Oil Speculation/Prediction


-could be used on both sides tbh

Don’t trust oil and gas forecasts in the Beaufort – margin of error high and are based on assumptive evidence


Callow 12 Lin Callow, LTLC Consulting, “Oil and Gas Exploration & Development Activity Forecast: Canadian Beaufort Sea 2012-2027” prepared for Beaufort Regional Enviornmental Assessment Aboriginal Affairs and Northern Development Canada April 2012 http://www.beaufortrea.ca/wp-content/uploads/2012/04/Beaufort-Sea-OG-activity-forecast-2012-2017.pdf

Peterson et al. 2003 describes forecasts as a "best estimate of future conditions from a particular model, method, or individual.” He goes on to state the “public and decision makers generally understand that a forecast may or may not turn out to be true." Given that changing future conditions are a near certainty, this oil and gas activity forecast, is intended to describe a plausible future based on current assumptions. However, it is important to recognize that there are numerous ever-changing factors, which may significantly alter this forecast at any time. In an attempt to try and develop a plausible current forecast of potential oil and gas activity in the Beaufort Sea, company representatives working on exploration and development projects in the area were interviewed. Those companies known to be considering or currently undertaking exploration and/or development planning in the Beaufort Sea were asked to describe their current plans for activity. The author used this information in developing an industry-wide overview of potential oil and gas exploration and development activities over the next 15 years. The report also provides a description of the oil and gas exploration and development activity cycle, which will apply to industry activities expected to occur over the long term. That is, the expected life cycle of those activities initiated during the next 15 years, is described to provide an indication of how these developments may build out to full scale and eventually be decommissioned. Any prediction of oil and gas exploration and development activities in Beaufort Sea over a 15 years period, will necessarily have a large margin for error. Therefore, the longer term project life cycle predictions included in the report are only general and based on industry experience.

Solvency – Say No

Canada has little incentive to develop in the Beaufort Sea – several reasons


  • Regulation

  • Low dependency

  • Costly

  • Remote

Østhagen 12 Andreas Østhagen Program Coordinator at the Norwegian Institute for Defence Studies (IFS) & Norway Director at The Arctic Institute, Center for Circumpolar Security Studies “Developing North American Arctic” June 2012 http://www.thearcticinstitute.org/2012/06/developing-north-american-arctic_12.html

In Canada, the Department for Aboriginal Affairs and Northern Development (AAND) is in charge of conducting outer continental shelf lease sales, but only in the Arctic part of Canada. Any subsequent approval of exploratory drilling plans is then to be made by the semi-independent National Energy Board (NEB), which also covers only the Arctic region. This board is subject to the nation-wide body National Resources Canada. The structure for conducting lease sales in the Beaufort Sea is arguably less politicised and more geographically separated in Canada than in the United States, where the Department of Interior manages the whole process. With regards to autonomy, the Northwest Territories has less than its American counterpart of Alaska, as the AAND manages any potential national resource development. There are ongoing debates on the transfer of regional governance to the Territories, but currently the federal government is very much in control of developments both onshore and offshore. The region is, on the other hand, also less dependent on revenues from oil and gas production when compared to Alaska, as the current production levels are very low. Consequently, the decision to open offshore lease sales and approve exploratory drillings in the Beaufort Sea is more closely linked to interests in Ottawa than locally. These interests without a doubt play into the fact that Canada is already developing into an international heavy weight in oil and gas production, due to oil sands in Alberta and oil and gas production in the provinces of New Brunswick and Newfoundland. A federal push, similar to the one seen in the 1970s, to develop costly and remote Arctic gas fields is therefore not given, as Canada is not largely dependent on developing these resources.




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