|The Shell oil rig the Polar Pioneer is heading to the Arctic via Seattle. Photo credit: Coast Guard News via Flickr.|
By Anders Lorenzen
Environmentalists are saying that Obama’s hypocrisy on climate change has been exposed after he handed Shell permission to drill for oil in the Arctic.
The Obama Administration approved Shell’s exploration programme in the Chukchi Sea, off the Alaskan coast, on Monday. This will be the first time since 2012 that Shell has attempted an exploration in the area. The oil giant famously had to drop its Arctic exploration plans in 2012 when its oil rig, the Kulluk, ran aground.
The Arctic is believed to contain 20% of the world’s undiscovered oil reserves. However, oil drilling there is highly controversial and opposed by environmental groups who say: It is not if but when an oil spill will occur in the Arctic, and once a spill happens it will be impossible to clean up.
Shell wants to drill up to six wells of 40 metres in depth.
On Tuesday, shares in Shell experienced a dramatic fall on the stock market—the market reacting to the Obama Administration’s approval. This is related to the continued low price of oil. It is estimated that to break even in the Arctic you need an oil price of at least $80 per barrel and that is still some way off as the current price is just $67 per barrel. Investors do not seem 100% convinced that Shell entering the Arctic would result in dividends either. The company has already spent huge sums of money exploring for oil in the Arctic, so far without reaping any financial rewards.
Obama’s move to allow drilling has been met with fierce criticism and arguments have been put forward that Obama can’t both say that he both wants to deal with climate change and allow Arctic drilling. It is only possible to search for oil in the Arctic due to the receding of Arctic summer ice that we know has been diminishing due to climate change. Writing in the New York Times, the environmentalist, Bill McKibben, says that nobody understands the power of the fossil fuel industry, and that the irresponsibility of Shell is now also the irresponsibility of the White House. He adds that drilling for oil in the Arctic is, for climate change, the equivalent of putting tobacco machines in cancer wards.
And while Shell will be the only oil giant undertaking risky Arctic oil drilling, with Total having said that conducting oil drilling in the Arctic is both risky and irresponsible, the move is being watched very careful by other oil giants. Environmentalists are concerned that if Shell is successful in the Arctic and we also see an increase in oil prices, a flood of oil companies could enter the frozen north.
Over the weekend thousands of activists in kayaks surrounded a Shell oil rig, destined for the Arctic, (currently housed in the Port of Seattle) sending a no Arctic drilling message to the company.
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