The Arctic region is known for its freezing temperatures, high winds, little or no sunlight and never-ending whiteness. A little less known fact is the amount of oil lying underneath it all. It is estimated that the 13% of the world’s undiscovered oil and 30% of the world’s undiscovered natural gas lie in this region making it one of the most exciting prospects for oil companies.
The interesting aspect about drilling in the Arctic is that the oil is not located in deepwater. It is just 500 meters below the surface. However the conditions are extremely harsh since it is all comprised of sea ice. In addition, environmental groups strongly insist that given the region’s lack of accessibility, responding to disasters and mishaps like oil spills can be impossible or extremely complex.
Totally 8 different nations share the rights to the Arctic region’s 30 million square kilometers and each of them have different stands with respect to oil exploration. On the Russian side of the Arctic, BP is in negotiations with the government to proceed with their oil drilling plans however this got waylaid after the Gulf of Mexico mishap. Negotiations have now been revived.
On the US side, Shell had obtained the rights to begin exploration but after a number of protests and challenges were posed by Alaskan native and conservation groups regarding clean air permits, Shell has deferred its drilling plans to 2012.
Norway on the other hand was proceeding full steam ahead until environmental groups forced them to defer plans until 2013, after the next elections. However with their reserves in the North Sea fast depleting, they are expected to move forward sooner than the other countries.
One thing is certain about drilling in the Arctic. It is an eventuality given its massive potential. A total of 90 billion barrels of oil is expected to lie underneath. However given the strong resistance by so many nations and interest groups, many believe that the only way it will ever progress is through deliberate and fruitful international negotiations.