Drilling for oil in the Arctic:
risks and rewards
Fran Ulmer
Chair, US Arctic Research Commission
UNH Oil Spill Forum
October 2014
Rapidly
changing Arctic
• Less sea ice
• Warmer temperatures
• Thawing permafrost
• Vulnerable species
• Increased human activity
• International interest
Economics…major
driver for Arctic
change
• Region is increasingly
accessible due to
technological advances
and climate change
• Increasing global demand
for resources
• Arctic is resource rich
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Potential Arctic Shipping Routes
= Chokepoint
Thule AB
Bering Strait
Arctic has much of
world’s remaining
“undiscovered”
oil and gas
13% oil
30% natural gas
20% natural gas liquids
2009 USGS CARA report
Energy companies active in the Arctic
Rosneft
Novatek
Gazprom
Statoil
Nunaoil
Exxon
Shell
Conoco-Phillips
BP
ENI
And many others
Oil and Gas Development
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Challenges of working in extreme environments:
cold, dark, remote, little infrastructure
• Severe & cold weather requires specially designed
equipment & vessels & training
• Inadequate aids to navigation and marine charts
• Changing soil conditions (permafrost)
• Some deposits are hazardous (gas hydrates)
• Limited airports, marine ports & exportation options;
long supply lines & extensive transport
• High costs to develop reserves
• Distant and limited USCG assets
What does this mean to Arctic residents?
Impacts to subsistence foods and cultural practices
Impacts to coastal villages and basic infrastructure
Possible regional/village economic opportunities
Many different expectations
• Local people want no negative environmental impact, respect
for local subsistence activities, local jobs and business
opportunities, shared revenues and services
• People more remote from the region may be more interested
in general economic activity/state revenues and domestically
produced oil and gas
• Shareholders, small businesses, unions, scientists,
environmentalists, regulators, others… all have expectations
• Concern about oil spills
…oil spills
in icecovered
waters…
UNCLASSIFIED
Deepwater Horizon Oil Spill Commission:
Recommendations for the Arctic
• Drill with utmost care: sensitive Arctic environment
• Develop comprehensive research program: scientific
information
• Lead in developing int’l drilling standards: best practices
• Raise liability cap
• Address gaps:
– Oil-spill response
– Containment
– Search and rescue
What’s happened since DWH?
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BSEE/BOEM/ONNR
SEMS Regs adopted
DOI’s Energy Coordination
Increased research $ in Arctic
ICCOPR revitalized
NOAA’s Arctic ERMA
Arctic Specific Regs developed
BSEE finished “Oil Spill Response Gap in Arctic”
National Arctic Strategy adopted
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ICCOPR, IARPC, NRC, Industry research efforts have increased
Reports have been produced
Conferences are being held
International efforts, like Arctic Council, IMO and Barents 2020
The Arctic Council
Ottawa Declaration 1996
 Forum to provide cooperation, coordination and interaction
among the 8 Arctic States, Permanent Participants, Observers
 Projects on sustainable development and environmental
protection in the Arctic
 Six working groups that focus collaborative research
 Negotiated agreements on SAR and oil spill response
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Arctic Offshore Oil and Gas Guidelines (PAME)
Guidelines for Transfer of Refined Oil in Arctic (PAME)
Systems Safety Management and Safety Culture (PAME)
Guide on Oil Spill Response in Snow and Ice (EPPR)
Recommended Practices for Arctic Oil Spill Prevention (EPPR)
Arctic Marine Shipping Assessment (PAME 2009) and
Implementation Report (2013) and IMO Polar Code
Bilateral cooperation:
Norway and Russia
Barents 2020 Project
Develop standards to be used internationally to ensure safe
oil, gas and maritime operations in the Barents Sea for
people, environment & asset values
Create predictable HSE framework for companies and
contractors regardless of nationality
7 teams of international experts worked together
with DNV (plus Norwegian Foreign Affairs Ministry, Rosneft,
Statoil, and many more)
Prevention: reduce risk
• Arctic standards appropriate to the circumstances and level
of risk ( probability + consequence)
• Industry led safety culture enhancement and data sharing
(build on COS and examples like Barents 2020)
• Identification of important ecological areas and protection
strategies (avoid, minimize, mitigate hierarchy)
• Increased investment in technology, training, protocols,
communication, infrastructure, capacity and regulatory
competency/effectiveness
• Incorporate performance based regulatory approach
• Cooperation in all aspects of prevention, preparation and
response at all levels of gov’t and industry
4 million people live in the Arctic
US Arctic Research Commission
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Arctic Human Health
Civil Infrastructure
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Assessment & Earth
Science
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Identities, Cultures
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