Royal Dutch Shell is pinning a lot of hope (and even more money) on the U.S. Arctic Ocean becoming its next major oil find. Despite a number of years of failed attempts, embarrassing accidents, and failed safety tests – Shell hopes to head back to the Chukchi Sea off the Alaskan coast this summer.
Arctic oil exploration is as reckless as it sounds – from an environmental perspective, a climate perspective, and a financial perspective. Let’s take a look at the uphill battle Shell faces as it continues its quest for unburnable carbon.
– Opposition in Seattle: Seattle is not happy that Shell plans to dock its Arctic drilling fleet in the port. Citizens have packed the Port Authority meetings, the Seattle City Council has written and urged Secretary Jewell to reject Shell’s lease approval, and the Port Commissioners themselves are under incredible pressure – including a lawsuit- to rescind the port lease agreement. Greenpeace is currently tracking one of Shell’s two major rigs – the Polar Pioneer- as it makes its way across the Pacific towards Seattle.
– Permits and leases: Shell is waiting on a number of permits for the 2015 season, many of which are based on a federal review process that seems to have been dangerously sped up to accommodate the company. But there is still a chance that Secretary Jewell could make the responsible decision and refuse to renew Shell’s lease. For now, we are waiting on the official Record of Decision from the Secretary on Lease 193, which will then start a clock on the official consideration period for Shell’s approval.
– Safety and seasons: Shell’s Arctic track record is abysmal. Safety equipment has been “crushed like a beer can”, rigs have run aground, caught fire, and had to be urgently removed due to unexpectedly early sea ice. Shell is currently testing safety equipment under government supervision off the coast of Washington state. But even if the safety gear stands up for now, the Arctic is a difficult and harsh environment – equipment failures and spills are not a matter of if, but rather when. Last week marked the 26th anniversary of the Exxon Valdez spill – a visceral reminder of the damage these spills continue to cause.
– Stranded assets and unburnable carbon: Recent studies have confirmed that there is no room for Arctic Oil in a safe climate future. It is the ultimate in unburnable carbon. Pursuing Arctic oil means that Shell is betting on a high carbon future, and betting that the world does nothing about climate change. The world will move on climate change – many jurisdictions already are, but Shell and Big Oil are ignoring all of the warning signals. Every single dollar spent on its Arctic program is a dollar thrown at an ultimately stranded asset.
– Spills and disasters: If Shell were to ever get to a production phase in Arctic oil, a spill would be all but inevitable. Even government studies peg the probability at 75%, and this number has been widely criticized as being conservative. Oil spills in the ocean are impossible to clean up effectively, but oil spills in the Arctic Ocean are in a category of their own.
– Money: Shell has already sunk over 6 billion dollars into its Arctic program plus over a billion that is already spent on this season alone. It has spent more money looking for unburnable carbon than any other company. While Shell is currently pointing to the low oil price and cutting jobs and costs around the world, it remains insistent in pouring billions into projects that can never see the light of day in a safe climate future.
Big Oil is facing an existential crisis. Its business model is on its way out. And instead of thinking seriously about what the future of energy might look like and switching gears, it is are digging in its heels and insisting that the fossil fuel era will never end.
But it will – it has to. You can already see it happening with the collapse of coal in North America, and the surge in renewable energy investment globally for example. These are the early signs of a promising new energy future. It is time to starting take cues from the leaders, not the laggards.
Shell needs to feel the heat on its Arctic pursuits. So lets double down and stop the madness before it begins.
Go here to call on the Obama Administration to stop it all before it starts.