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Oil and the Arctic: what is at stake
By C�line SERRAT, Marlowe HOOD
Paris (AFP) Dec 21, 2016


U.S., Canadian voices chime in on drilling ban
Ottawa (UPI) Dec 21, 2016 - U.S. and Canadian voices debated the wisdom of the indefinite ban on oil and gas work in some of its territorial waters, the Arctic in particular.

As part of a joint move with the Canadian government, outgoing U.S. President Barack Obama used his authority under the Outer Continental Shelf Lands Act to ban oil and gas work in the Chukchi and Beaufort Seas off the coast of Alaska, as well as Atlantic coast areas.

Dale Marshall with Environmental Defense Canada said the indefinite ban on Arctic oil and gas in particular was welcome news for a nation looking to strike a balance between coastal resources and aboriginal and environmental concerns.

"The Arctic holds a precious, yet sensitive ecosystem that is vital to Indigenous livelihoods and culture in the north," he said in a statement. "Increasingly, governments need to be taking steps to remove the most dangerous forms of fossil fuel development off the table."

A report from the U.S. Energy Information Administration finds the Arctic basins alone hold about 22 percent of the world's undiscovered conventional oil and natural gas resources. Uncorking those reserves supports some of the regional economies, with Alaska relying in part on the 13.6 billion barrels of recoverable oil in Prudhoe Bay.

In the joint Canadian-U.S. statement, the governments said some of the other ecological and cultural assets in the Arctic are irreplaceable and the vulnerability from an oil spill and extraction is too great to ignore. The U.S. government as a result designated most of its U.S. territorial waters and the Canadian government designated all of its Arctic territorial waters off limits to oil and gas indefinitely.

Alaska Gov. Bill Walker said the move was an unprecedented shot across his state's bow. Decisions made far away from Arctic territories exposes his state to economic vulnerabilities.

"No one is more invested than Alaskans to ensure that the habitats within the Arctic are protected," he said in a statement. "To lock it up against any further exploration or development activity is akin to saying that the voices of activists who live in Lower 48 cities have a greater stake than those to whom the Arctic is our front yard and our back yard."

Without Prudhoe Bay, the EIA's assessment found it was unlikely that smaller oil fields in Alaska would be development because of the corresponding infrastructure build. Nevertheless, EIA said developing Arctic basins is costly to the point that work is prohibitive.

EIA said 61 large oil and gas fields have been discovered across the entire Arctic region. Forty-three of those are in Russian territorial waters.

A US-Canadian move to block new leases for oil or gas drilling in sovereign Arctic waters is designed to protect an area already severely disrupted by climate change.

A quick tour of the Arctic and what is at stake:

- THE ARCTIC -

The Arctic Circle, which starts 66.5 degrees north of the equator, marks an area where on at least one day of the year there will be no light or no night -- and that period is longer, the further north you go.

It covers more than 20 million square kilometres (7.7 million square miles), an area bigger than Russia, cutting through northern Canada, Alaska, Russia, Scandinavia and Greenland. About a third of the area is land.

The part of the Arctic Ocean permanently covered by ice has been diminishing steadily for several decades due to global warming, making the region more accessible to shipping, and thus oil and gas extraction.

The record low ice cover -- 3.41 million square kilometres in September 2012 -- was 44 percent below the 1981-2010 average.

Some of the ocean falls under the national jurisdictions of the countries it borders, but most is not subject to any national laws or regulations.

An Arctic Council created in 1996 to address territorial and political disputes has so far only dealt with peripheral issues such as protocols for sea rescue and oil spills.

- ENVIRONMENTAL RISKS -

The biggest threat -- driven by the burning of fossil fuels -- is climate change, which has pushed temperatures in the Arctic up twice as fast as the worldwide average.

Scientists have calculated that global oil, gas and coal projects already under construction or in operation will push Earth past the threshold of dangerous global warming, heating the planet by more than two degrees Celsius (3.6 degrees Fahrenheit) over pre-industrial era levels.

Developing even a portion of the Arctic's massive as-yet-untapped gas and oil reserves would exacerbate climate change even further.

The region's human communities and wildlife -- from polar bears to bowhead whales, from seals to sea birds -- are also at risk.

Dozens of distinct indigenous cultures within the Arctic depend directly on the ocean and its wildlife for food and income.

Oil production, and spills, difficult to clean up in icy conditions, could threaten livelihoods by damaging fragile ecosystems. Dirty fuel from ships operating in the Arctic is also a source of pollution.

Climate change, meanwhile, has already had a major impact on these mostly coastal communities, some of which are literally falling into the sea.

- NOT ON THE SAME PAGE -

The US decision designates the vast majority of its waters in the Chukchi and Beaufort Seas -- an area covering some 50 million hectares (125 million acres) -- as "indefinitely off limits" to offshore oil and gas leasing. Canada said all its Arctic waters were off limits.

Both the United States and Canada have aggressively developed other fossil fuel resources in the last two decades -- gas extracted via "fracking" and oil from tar sands, respectively.

The same is not true for Russia and Norway, whose economies depend heavily on oil, some of which is taken from the Arctic Circle.

"The economy-energy balance of the US is not the same as for Russia and Norway," notes Laurent Mayet, France's representative to the Arctic Council.

- NOT WORTH THE TROUBLE? -

In September 2015, Anglo-Dutch oil giant Shell abandoned exploratory drilling operations in the Alaskan Arctic, saying not enough oil and gas had been discovered to make extraction worthwhile. The licence had been granted by the Obama administration.

The British company Cairn Energy likewise gave up on its forays, said Pierre Terzian, head of French consulting firm Petrostrategies.

"There were no imminent prospection projects" before the joint US-Canadian announcement, Terzian told AFP. "Why go into the Arctic when there is plenty of oil and gas elsewhere that is technically less expensive to extract and does not carry as much risk in terms of image?"

French group Total has gone further, renouncing the exploitation of oil fields in the Arctic.

"The best insurance for the Arctic is a low price for oil," Terzian added.

ces-mh/pvh

ROYAL DUTCH SHELL PLC

TOTAL


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