The Arctic: a new frontier for oil, gas firms

Jan 24, 2011 by Julien Girault
A sign reading: "Gas!" in -40 degree celcius weather in Novy Urengoi, just below the Arctic Circle in far northern Russia. BP's deal with Rosneft to jointly explore the Arctic's huge oil and gas reserves sets out a new frontier in the race for resources, but one that is dogged by technical and environmental concerns.

BP's deal with Rosneft to jointly explore the Arctic's huge oil and gas reserves sets out a new frontier in the race for resources, but one that is dogged by technical and environmental concerns.

More than one fifth of the world's undiscovered but technically recoverable reserves of hydrocarbons are located north of the Arctic Circle, according to the US Geological Survey (USGS).

The region accounts for about 13 percent of the world's undiscovered oil and 30 percent of the undiscovered natural gas, USGS data shows. About 84 percent of the resources occur offshore, trapped below the icy waters.

After its disastrous oil spill in the , BP hopes to secure its future with the January 14 deal with state-owned Russian firm Rosneft, which gives it access to 125,000 square kilometres of sea in the Russian Arctic.

For Western firms struggling to access known reserves, particularly in the Middle East, the British oil giant's move highlights the potential of a largely untouched new frontier.

"The potential is there, but exploring requires risk-taking," said Manouchehr Takin, senior analyst at the Centre for Global Energy Studies (CGES) in London.

"The costs are high, much higher than elsewhere, and the summer seasons are short, so it takes a long time."

Jonathan Jackson, analyst at stockbroker Killik & Co, suggested that the drilling window was about 100 days a year because of the winter ice.

"The early-stage nature of the assets and the limited drilling window available in the Arctic means production is a long-way off," he continued.

BP itself has said that it does not expect to produce its first barrel of oil in the Rosneft venture until 2020.

But while it may be a long game, the competition is well underway.

When Greenland asked for bids for the latest round of exploration licences last year, 12 international companies put in an offer, including ConocoPhillips of the United States, the Anglo-Dutch oil giant Shell and France's GDF Suez.

Comparison between the fabled Northeast passage, which has opened up due to receding ice, and the traditional Suez route

Exploration off Greenland has yet to produce any commercially exploitable reserves, but that did not stop British firm Cairn from boosting its investment there by one billion dollars on the back of "encouraging" first results.

Alaska, where the Prudhoe Bay oil field has been operating since 1977, is currently the most exploited area of the Arctic and its wells are responsible for more than one tenth of the oil production of the United States.

But drilling there has been hugely controversial and environmental campaign group Greenpeace was quick to condemn BP and Rosneft's new venture in the Russian Arctic.

"Any company that drills for oil in the Arctic forfeits any claim to environmental responsibility. An oil spill in the cold waters of the Arctic would be catastrophic and extremely difficult to deal with," it said.

A report last November by the US group Pew Environment suggests that nothing can prepare energy companies for the hostile environment of the Arctic, where violent winds whip up nine-metre waves and icebergs clutter the waters.

File photo shows fishermen in Ilulissat Icefjord, western Greenland, a UNESCO World Heritage site. With the race for Arctic riches steaming ahead, the region's indigenous Inuit are raising their voices and demanding that Arctic nations stop stealing their land and respect their way of life. Arctic waters could hold 25 percent of the world's undiscovered oil and gas, according to a survey.

BP says that its experiences in deepwater drilling in the Gulf of Mexico and Alaska mean it is well equipped for the task.

But its critics are not reassured, noting both the Gulf oil spill and a spill in Alaska in 2006, where BP's US subsidiary was blamed for leaking 760,000 litres of oil on the tundra and on a frozen lake.

The situation is further complicated by the geopolitical tensions that surround the Arctic, as border countries Russia, Norway, the United States, Canada and Denmark (via Greenland) battle it out to stake their claims.

Global warming is also providing new opportunities all the time as the Arctic ice melts. In August, a Russian tanker set off for China on a previously impassable route through the ocean.

Explore further: Five anthropogenic factors that will radically alter northern forests in 50 years

add to favorites email to friend print save as pdf

Related Stories

Natural gas in the Arctic is mostly Russian

May 29, 2009

(AP) -- Nearly one-third of the natural gas yet to be discovered in the world is north of the Arctic Circle and most of it is in Russian territory, according to a new analysis led by researchers at the U.S. Geological Survey.

Russian surveys continental shelf borders

Mar 21, 2006

Russian Defense Ministry officials say they are considering using nuclear-powered submarines to survey Russia's continental shelf borders in the Arctic.

Recommended for you

More, bigger wildfires burning western US, study shows

13 hours ago

Wildfires across the western United States have been getting bigger and more frequent over the last 30 years – a trend that could continue as climate change causes temperatures to rise and drought to become ...

User comments : 24

Adjust slider to filter visible comments by rank

Display comments: newest first

geokstr
1.8 / 5 (10) Jan 24, 2011
Two things:

1) So again, another enemy of the US will clean our clocks with regards to energy production. We put our northern lands off limits to exploration and drilling and Russia opens theirs. We don't build new nukes while the rest of the world, including China, goes full steam ahead. We use the BP spill as an excuse to shut down off-shore licensing, and China and Cuba will be drilling where we won't. Progs at work.

2) Ever notice how the unit of measurement of an oil spill keeps shrinking? That way the numbers can appear soooooo much bigger. Oil spills used to be measured in barrels, then for BP it dropped to gallons, and thus could be expressed in terms 42 times larger. Apparently, that's not apocalyptic sounding enough, and this one is measured in litres, another multiplication of 3.78541178.

760,000 litres sounds so much more terrifying than 4,780 barrels, doesn't it? Why not measure it in teaspoons? That way, you could scare a lot more people with the number 3,632,994,705.
GSwift7
2.1 / 5 (7) Jan 24, 2011
lol. You're being silly. You can't just jump all the way down to teaspoons. You are missing an opportunity to hit the fluid ounce mark first. Then when you go down to teaspoons, you can claim an increasing trend, and say that oil companies keep getting worse over time. If you go all the way down to teaspoons then you'll have nowhere else to go. I mean, using drops would just be rediculous.

760,000 litres of oil


So it leaked for what, an hour? Is that like maybe one rail car? Anybody know what a rail car holds?
GSwift7
2 / 5 (8) Jan 24, 2011
I looked it up:

Largest rail tank car used in regular service is 50 000 US gallons = 189 270.589 liters.

So, that's about 4 rail cars, maybe 5 of the more common size. You're right; three and a half million teaspoons sounds worse.
geokstr
2 / 5 (8) Jan 24, 2011
three and a half million teaspoons sounds worse.

That's three and a half BILLION teaspoons. Stop minimizing this montrous, horrendous, horrific end-of-Gaia disaster, you capitalist-roader Exxon shill.

:-)
lengould100
4 / 5 (8) Jan 24, 2011
Ha ha, guys. Litres is simply the common measure used in any civilized part of the world. No conspiracy involved, unless you count someone thieving your tinfoil hats.
Howhot
3.4 / 5 (10) Jan 24, 2011
three and a half million teaspoons sounds worse.

That's three and a half BILLION teaspoons. Stop minimizing this montrous, horrendous, horrific end-of-Gaia disaster, you capitalist-roader Exxon shill.

:-)

And each teaspoon can create an oil slick with a size of about 1/2 acre. (not agitated of course). Hope you enjoy the beach swim. POS.

nuge
2 / 5 (4) Jan 25, 2011
Okay, but that was 5 railcars onto a single frozen lake, not spread out in ocean water. To me, that is of concern, and it should be to you, too. The Arctic is one of the few wildernesses left in the Northern Hemisphere.
Argon
1.7 / 5 (6) Jan 25, 2011
Why don't the environ"mental"ists ever complain about all the billions upon billions of animals that rip each other limb from limb each and every day for food? Death and oil are in the world: Deal with it! Death and Taxes! and OIL? Oh My! That's just for starters: Judgement Day Is A Coming! Make Your Peace, TODAY, With The Lord Jesus Christ Or Face The Lake Of Fire, and BE tormented DAY and NIGHT for EVER and EVER!

"And whosoever was not found written in the book of life was cast into the lake of fire." Revelation 20:14

"[A]nd shall be tormented day and night for ever and ever." Revelation 20:10

"And brought them out, and said, Sirs, what must I do to be saved?
"And they said, believe on the Lord Jesus Christ, and thou shalt be saved". Acts 16:30,31

"That if thou shalt confess with thy mouth the Lord Jesus, and believe in thine heart that God hath raised him from the dead, thou shalt be saved." Romans 10:9
nuge
3 / 5 (4) Jan 25, 2011
Why don't the environ"mental"ists ever complain about all the billions upon billions of animals that rip each other limb from limb each and every day for food? Death and oil are in the world: Deal with it! Death and Taxes! and OIL? Oh My! That's just for starters: Judgement Day Is A Coming! Make Your Peace, TODAY, With The Lord Jesus Christ Or Face The Lake Of Fire, and BE tormented DAY and NIGHT for EVER and EVER!

"And whosoever was not found written in the book of life was cast into the lake of fire." Revelation 20:14

"[A]nd shall be tormented day and night for ever and ever." Revelation 20:10

"And brought them out, and said, Sirs, what must I do to be saved?
"And they said, believe on the Lord Jesus Christ, and thou shalt be saved". Acts 16:30,31

"That if thou shalt confess with thy mouth the Lord Jesus, and believe in thine heart that God hath raised him from the dead, thou shalt be saved." Romans 10:9


You won't have a lot of luck on this website (I hope).
GSwift7
2.7 / 5 (3) Jan 25, 2011
And each teaspoon can create an oil slick with a size of about 1/2 acre. (not agitated of course). Hope you enjoy the beach swim. POS


I usually just ignore you, but that one made me laugh. Do you realize how much oil naturally seeps up out of the ground all over the world, both on dry land and under the ocean? Like most environmentalists, you really don't understand the reality of the world. You know that there are actually good things about oil too, don't you? It's not like it's antimatter that completely destroys anything it touches. Oil on a frozen lake isn't a disaster. It's just ugly to look at and it may kill a handful of animals. That in turn decreases competition and allows other animals to prosper. It's just a temporary trade-off. Life always ends in death. Your ideals are not shared by everyone, and that doesn't make you worse or better than someone who has a different set of ideals.
GSwift7
2.3 / 5 (3) Jan 25, 2011
I'm just glad that for every crazy person like howhot on the planet there are so many normal people. Extremeists say the funniest things though. They are good for a laugh, as long as they don't show up with an AK-47 one day.

I think maybe tonight I'll play my Howhot drinking game, where I read the comments and take a drink every time howhot calls somebody names like a little kid in first grade.

I just LOVE name-calling. That's really the best way to deal with just about any situation. Get pulled over by a cop, call him names. Girlfriend is pissed at you, call her names. Your kid is doing something wrong, call him/her names. You get a bad grade on a college paper, call the professor names.
nuge
2 / 5 (4) Jan 25, 2011
Howhot didn't call you names at any point in his comment, GSwift7. You, however, referred to him as a "crazy person" and an "extremeist" (whatever that is, I think you meant 'extremist').
GSwift7
2.3 / 5 (3) Jan 25, 2011
nuge, are you just trolling or do you have some point?

I didn't say that he called me a name. I said that he is using name-calling again, as he does in many of his posts. He's called me names plenty of time in other threads. I get sick of seeing those kinds of comments, whether they come from him or someone else and no matter who they are directed at. I will denounce anyone who stoops to that level, no matter who they are calling names.

Yes I called him crazy. I could be more technical and say that I think he seems to have an emotional disorder or a social boundary issue if that makes you happier. I prefer to keep it simple and just call him crazy though, since I'm just a layman. I don't really think that's name-calling, but call it what you want. It was an attack either way. :)

Yeah, thanks for the spelling help. I don't really worry about correcting typos here. It's just an internet comment thread, after all. Despite my skill in math, I've never been a good speller.
geokstr
1 / 5 (1) Jan 25, 2011
three and a half million teaspoons sounds worse.

That's three and a half BILLION teaspoons. Stop minimizing this montrous, horrendous, horrific end-of-Gaia disaster, you capitalist-roader Exxon shill.

:-)

And each teaspoon can create an oil slick with a size of about 1/2 acre. (not agitated of course). Hope you enjoy the beach swim. POS.


Right! Cite please?

And as usual, it's HowSnot, with his typical juvenile name calling based on excretory functions. You do seem to have a fixation on bowel movements. Perhaps you should get some professional help for that.

Another 12 year old living in mom's basement, thinking he's all that.
geokstr
1.5 / 5 (2) Jan 25, 2011
Howhot didn't call you names at any point in his comment, GSwift7. You, however, referred to him as a "crazy person" and an "extremeist" (whatever that is, I think you meant 'extremist').

Nuge, what do you think "POS" means, "Point Of Sale"? (That is actually one of the meanings, used in business. But this commenter is an opponent of the evil capitalist-roaders, so I doubt that's what he meant.)

No, it means "Piece of Sh*t". This is what passes for discourse for people like HowNot.
GSwift7
3 / 5 (2) Jan 25, 2011
Yeah, I was thinking that myself, but I refuse to type stuff like that here. I really don't like that kind of stuff geo. Sorry, and thanks at the same time.
nuge
3.3 / 5 (3) Jan 25, 2011
No, I'm not trolling. I hadn't realised what POS meant, but it had seemed to me like at least Howhot was still talking about oil in his post, whereas you were just complaining about his posting. From what I could see, within THIS thread, he was in the right. I may retract that viewpoint, or I may not.
GSwift7
2.3 / 5 (3) Jan 26, 2011
Yes, that's entirely correct. I'm guilty as charged. I just get tired of his constant vulgarity, and felt the need to make an off-topic post to point out my disdain for his posting style. I don't take issue with other people who share his point of view, but do it in a mature way. I'm perfectly capable of using vitriol to marginalize people who disagree with me, but I try not to do that. Sorry, I thought everyone knew that POS was an abbreviation for an insult. That's why I didn't understand your post, and accused you of trolling. It makes more sense now, and I'm sure my post makes more sense to you now also.

If I could just block out all comments from Howhot and Vendicar Drecarian I would certainly do it, but we can't do that here, so I just protest them once in a while when I've had more than I can take.
geokstr
2.3 / 5 (3) Jan 27, 2011
Yeah, I was thinking that myself, but I refuse to type stuff like that here. I really don't like that kind of stuff geo. Sorry, and thanks at the same time.

I don't care for it either, and while I can snark with the best of them, it is at political groups and ideologies, not individuals.

I try to avoid personal insults aimed at other commenters, but after being on the end of too many "POS" and "sucking corporate d*ck" attacks from the assorted juvenile potty-mouthed leftists here for disagreeing with them, I'll happily give as good as I get.
Javinator
5 / 5 (2) Jan 27, 2011
As soon as you label someone as a part of the group that you've insulted previously, you have just personally insulted that individual.
geokstr
2.3 / 5 (3) Jan 27, 2011
As soon as you label someone as a part of the group that you've insulted previously, you have just personally insulted that individual.

Yeah, right. You can't see the difference between criticizing leftism or other ideology in general and calling someone a POS or dumb or stupid or accuse them of "sucking corporate d*ck" and on and on, as a number of commenters here do? (and you know who you are)

One is part of debate, even in polite company and the other will get you decked. But certain people are so brave that they will talk that way to your computer but not to your face.
Javinator
3.7 / 5 (3) Jan 28, 2011
Neither has part in debate.
geokstr
1 / 5 (1) Jan 28, 2011
Neither has part in debate.

Really?

Are you saying that I can't criticize ideology in debate? What is the point of debate otherwise, wherever politics is even peripherally involved, as it is often in these times, even where "science" is concerned?

The whole AGW controversy has been politicized beyond belief, mostly by the left, as have things like "carcinogens" and "multi-hand smoke" and energy alternatives and population demographics and economic policy and lots more.

A good chunk of the articles on this "unbiased" "objective" "non-political" "science" site are fraught with political implications, and like many other pop-sci sites, it has been co-opted with a left lean.

There is an article today I found elsewhere about a new peer reviewed study that says that the Himalayan glaciers are NOT shrinking, some are growing, and that climate change is not a factor. I will be interested to see if this site covers it, and if so, how they spin it.
Javinator
1 / 5 (2) Jan 28, 2011
If you equate me to Hitler, I'd probably take offense.

If you equate leftist ideology to Hitler's, then call me a leftist, it's the same thing as you calling me Hitler. Then you wonder why I take offence.

There's a difference between logical criticism and mudslinging.

A good chunk of the articles on this "unbiased" "objective" "non-political" "science" site are fraught with political implications, and like many other pop-sci sites, it has been co-opted with a left lean.


Most (not all) scientists are "on the left" as you would say. As such, there's not too much science coming from "your side".

More news stories

Six Nepalese dead, six missing in Everest avalanche

At least six Nepalese climbing guides have been killed and six others are missing after an avalanche struck Mount Everest early Friday in one of the deadliest accidents on the world's highest peak, officials ...

China says massive area of its soil polluted

A huge area of China's soil covering more than twice the size of Spain is estimated to be polluted, the government said Thursday, announcing findings of a survey previously kept secret.

There's something ancient in the icebox

Glaciers are commonly thought to work like a belt sander. As they move over the land they scrape off everything—vegetation, soil, and even the top layer of bedrock. So scientists were greatly surprised ...

Clean air: Fewer sources for self-cleaning

Up to now, HONO, also known as nitrous acid, was considered one of the most important sources of hydroxyl radicals (OH), which are regarded as the detergent of the atmosphere, allowing the air to clean itself. ...

Scientists tether lionfish to Cayman reefs

Research done by U.S. scientists in the Cayman Islands suggests that native predators can be trained to gobble up invasive lionfish that colonize regional reefs and voraciously prey on juvenile marine creatures.

Leeches help save woman's ear after pit bull mauling

(HealthDay)—A pit bull attack in July 2013 left a 19-year-old woman with her left ear ripped from her head, leaving an open wound. After preserving the ear, the surgical team started with a reconnection ...