Oil Spill? Pass It On

By Bill Moore

Posted: 29 Sep 2012

As the brief Arctic summer began the slide towards its long, cold, dark winter, the U.S. Coast Guard conducted a three-day exercise with the Defense Department to test its ability to respond to an oil spill in the Arctic Sea. Using the Coast Guard Cutter Sycamore, as well as a support tug and barge, along with other vessels, Arctic Shield 2012 tested several different oil containment and skimming technologies, including the DEMSI 'Polar Bear' depicted above.

The reason the Coast Guard is conducting such exercises is because global warming is rapidly melting sea ice, opening up the fabled Northwest Passage to not only to surface ship navigation, but also mineral exploration; oil and gas, in particular. It is believed, depending on various estimates, that the offshore region of the Arctic, out to waters 500m deep, there might be anywhere from 157 billion barrels of oil (bbo) and 299 trillion cubic feet (tcf) of natural gas (5% probability) to as little as 44 bbo and 770 tcf (95% probability). As Business Insider noted, "Given the scarcity of actual drilling data and the reliance on analogs and statistical simulation for this survey, our understanding of the Arctic’s hydrocarbon potential will no doubt evolve as fresh prospecting gets under way."

Based on our current understanding, two-thirds of this is located off the Alaskan coastline, a third off of the Russian Arctic.

So, the Coast Guard practices dealing with the inevitability of oil spills in one of the most inhospitable and ecologically-fragile regions on the planet where it's dark and very, very cold most of the year. This, as Business Insider points out, "will require technologies that don’t yet exist, enormous amounts of capital, and a high tolerance for risk."

But at whose expense, is the question? If trends continue on their present course, increasingly, the cost will be born, not by the oil companies, but by taxpayers, following the corporate mantra of "internalize reward, externalize risk."

Take the Coast Guard's three-day exercise as an example. One of the key pieces of equipment being tested was the boom that would be used to surround the spill. To deploy it, it normally has be to assembled on land then towed out to the spill, which is logistically less a problem in the warm waters of the Gulf of Mexico off Louisiana. The Arctic is another story entirely. The nearest port, Barrow, Alaska, is 600 miles away, so the Coast Guard had to hire an ocean-going tub and barge to haul the boom to the test site. And this is in the summer, when there's daylight nearly 24 hours of the day for some 12 weeks. Now imagine responding to a Deepwater Horizon-like blow-out in the depth of an Arctic winter, when the ocean is frozen over and travel is impossible.

This is why "The Senate’s No. 2 Democrat and five colleagues are urging the Obama administration to cancel planned oil-and-gas lease sales off Alaska’s Arctic shores in coming years," reports The Hill. The letter was sent on September 21st by Senate Majority Whip Dick Durbin (D-Ill.) and five colleagues. States the letter:

Challenges with infrastructure and spill response are unprecedented in the Arctic’s remote, undeveloped region: the Arctic Ocean is characterized by hurricane-force storms, 20-foot swells, sea ice up to 25 feet thick, sub-zero temperatures and months-long darkness.

The Senators further point out that the Arctic has "'extremely limited infrastructure' and that the nearest Coast Guard station is 1,000 miles away," The Hill adds.

Assuming, as Business Insider declared, "Exploration and development of oil and gas from the Arctic Circle is a foregone conclusion," and that the Obama Administration -- and certainly a Romney White House -- lets oil and gas companies explore and develop the region's hydrocarbon resources, we can assume those same companies are going to use every trick in the book to shift as much of the external costs of these projects -- starting with environmental clean-up -- as possible onto taxpayers and not their shareholders, meaning they get to keep the profits and we pay for the mess, one way or another. Can we really expect they are going to pay for keeping a fleet of icebreakers, barges, booms and skimmers at the ready when a drilling operation goes amiss offshore? In two words, "Hell no!" They weren't ready to deal with the Deepwater Horizon blow-out just offshore of balmy Louisiana.

And here's the real kicker. Based on what we know about the potential offshore reserves in the region and what our current global consumption rate is, "the Arctic may contain anywhere from a 1-3 year supply of oil and a 7-27 year supply of gas."

Actually, it is likely to be even less than that. Continues Business Insider:

[T]hese are merely estimates of 'original oil and gas in place.' Typically, only 25-35% of that amount is economically recoverable using current technology. So the Arctic may in fact have perhaps a 4-month world supply of recoverable oil, and around a 2-year supply of gas.

Is that really worth the risk, much less the effort?

Originally published on EV World.Com

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