One Reason Obama Might Open the Arctic to Drilling: China
President Barack Obama says climate change is a priority, and his recent track record suggests that he’s serious. But he's also taking some big steps backwards as well: On Monday, he cleared a major hurdle for Royal Dutch Shell to explore untapped oil reserves in the Arctic, 70 miles off the coast of Alaska in Chukchi Sea.
It’s not quite the final word on whether Shell will soon fumble its way through drilling in the Arctic. Though it's overcome a key hurdle by winning approval from the Bureau of Oceans Energy Management, the permit is conditional on approvalfrom other federal and state agencies, and Shell must also prove it can comply with the Endangered Species Act.
But environmentalists are furious, arguing this sets up for a disaster akin to the 2010 BP Gulf of Mexico explosion, only worse. “Any major Arctic Ocean spill would be impossible to clean up,” Franz Matzner, director of the Beyond Oil Initiative at the Natural Resources Defense Council, said in a statement. “Some ideas are just non-starters, like drilling for oil in the Arctic Ocean,” Audubon President and CEO David Yarnold also said. “Spills under ice sheets can’t be controlled, and America doesn’t need the oil in order to maintain its energy independence.”
After all, Shell’s initial attempt at drilling in the icy waters in 2012 ended with two oil rigs running aground and one catching fire. Shell suspended its drilling and the Coast Guard followed up with a scathing report of the company's irresponsible practices.
According to Yarnold, letting Shell resume “is just cynical partisan politics, a public relations bone that the Obama administration is throwing to Shell.” Surely, the administration has faced pressure from Shell and Republican critics.
But Obama's decision is as much about geopolitics and the age-old myth of American energy independence as it is about bowing to corporate pressure.The Obama administration enjoys crediting its all-the-above energy policies that are reducing America’s reliance on foreign oil, and it may see Arctic drilling in the same light. At the same time, Russia wants to heavily push into the region, though it's facing its own challenges due to western sanctions. While China does not have Arctic territory, it is investing in Norwegian and Russian operations, which do have claims. Each country is looking to the Arctic's vast untapped resources—estimated at 20 percent of untapped oil and gas reserves. Climate change, ironically, is making it easier to access these resources as the polar ice caps melt.
The U.S. does not want to miss out on this energy gold rush, even if it runs afoul of the administration's efforts on climate change. By removing barriers now for Shell, the U.S. hopes to capitalize early on a resource-rich region. The Arctic could mean a long-term, fundamental change to the world’s oil supply, since commerical production is still decades away. According to a 2012 report from the Center for Climate and Energy Solutions, melting sea ice is “ushering in a new era of Arctic geopolitics driven by global warming in combination with contemporaneous economic and political trends. The Arctic is therefore a bellwether for how climate change may reshape geopolitics in the post-Cold War era.” Countries are also ramping up their military presence in the Arctic, “with serious long-term ramifications for the peace, stability and security of the region,” says the report.
In April, the National Petroleum Council, a Department of Energy federal advisory committee, published a report making the case that development in the Arctic is as much a strategic choice as it is an economic one: “The United States has large offshore oil potential, similar to Russia and larger than Canada and Norway. Facilitating exploration in the U.S. Arctic would enhance national, economic, and energy security, benefit the people of the north and the United States as a whole, and position the United States to exercise global leadership.” The NPC itself is far from an unbiased source; it may not be labeled a lobbying group, but its representatives hail from the oil industry, including Shell. But the report carried enough weight to make its way into the citations of a Department of Energy Quadrennial Energy Review published weeks later.
The U.S. is poised to be a leader in the Arctic for plenty of other reasons besides drilling. In April, Secretary of State John Kerry took over as chair of the eight-country Arctic Council, a position he’ll occupy for the next two years. Kerry has vowed to make climate change a priority. But the White House's latest move suggests the climate is not the only one.