Gulf of Mexico leak may slow Arctic "cold rush"

OSLO Thu May 6, 2010 6:26pm IST

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OSLO (Reuters) - The oil leak in the Gulf of Mexico may slow any "cold rush" to explore the Arctic, where companies would struggle to clean up spills in remote, icy seas, experts say.

Firms are eyeing opportunities to tap Arctic oil reserves made more accessible by climate change. But the disaster at a ruptured BP oil well has refocused attention on environmental risks.

"The blowout is pretty disastrous for anyone planning to start offshore operations in ecologically fragile areas," said Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies.

"It was already going to be tough in the Arctic."

Royal Dutch Shell, for instance, is facing pressure from conservationists at least to postpone 2010 drilling in the Chukchi Sea off Alaska. They say it would be harder to deploy clean-up gear there than BP has managed in the Gulf of Mexico after last month's explosion of Transocean Ltd's Deepwater Horizon rig, which it had hired to drill the well.

In Norway, the spill is fuelling arguments against opening a region off Lofoten on the fringe of the Arctic, favored by firms including Statoil.

"This is a very strong reminder that we should move very slowly in the Arctic. There are much fewer people but oil remains much longer because of the colder water," Norwegian Environment Minister Erik Solheim said.

Arctic spills could hit indigenous peoples in remote societies dependent on wildlife from polar bears to seals, and under pressure from a retreat of sea ice in summer which has been blamed by a U.N. panel of scientists on global warming.

DARKNESS AND ICEBERGS

Oil is hard to clean up in many parts of the Arctic because of icebergs, winter darkness and a lack of nearby ports to bring in booms or skimmers. That remoteness, and high costs, already make many analysts doubt a big "cold rush" is imminent.

"We are committed to operating safely wherever we are in the world, including the Chukchi and the Beaufort (seas)," said David Williams, a spokesman for Shell. He said the company would draw lessons from BP's blowout.

But Marilyn Heiman, head of the U.S. Pew Environment Group's Arctic Program, said: "We don't believe there is adequate spill response planned for the Arctic." Documents show Shell's worst case is a blowout of 5,500 barrels per day -- comparable to BP's well -- lasting a maximum 30 days.

Pew and some other conservation groups wrote to U.S. Interior Secretary Ken Salazar this week asking him to reconsider approval for Shell to drill in the Chukchi and Beaufort Seas this summer. The plan faces some legal challenges.

Shell paid $2.1 billion for Chukchi Sea leases in 2008 and ConocoPhillips $506 million. Firms such as BP, Exxon Mobil and Chevron are investing millions of dollars to lease tracts of Canada's Beaufort Sea.

Among other plans, Russia's Gazprom aims to develop the Shtokman gas field in the Barents Sea. Greenland has allowed some drilling and Iceland has carried out surveys.

The U.S. Geological Survey has estimated the Arctic may contain 90 billion barrels of oil, enough to meet world demand for three years. In 2007, Arctic summer ice shrank to its lowest since satellite records began in the 1970s.

Firms have made progress with stronger skimmers, techniques to burn oil on ice, and even helicopter-deployed radar that can map oil under ice to limit risks of spills.

"We're working continuously with the supply industry and others to develop oil spill protection," Statoil chief executive Helge Lund said, adding there may be lessons from the Gulf of Mexico gush.

But a 2007 report for Arctic governments said that skimmers or booms were often stored far away and might not work.

"There are no effective means of containing and cleaning up oil spills in broken sea ice," it said. Tugs are not powerful enough, and booms too weak, to round up ice mixed with oil.

"Even with the best planning you can't avoid accidents," said Lars-Otto Reiersen, head of the Arctic Monitoring and Assessment Program which produced the report.

Just south of the Arctic, the 1989 Exxon Valdez tanker spill off Alaska showed the risks of spills in a cold climate. The worst accident in U.S. history spilled 260,000 barrels of oil -- some of which lingers despite a vast clean-up.

(Additional reporting by Joergen Frich in Oslo, Deborah Zabarenko in Washington and John Irish in Paris; editing by Mark Trevelyan)

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