May 12, 2015

A Step Forward for Arctic Production

Matthew Koch

From CNN:  The Obama administration, citing "rigorous safety standards" and a long review process, has granted conditional approval to energy giant Shell to begin oil drilling in the Arctic waters off the coast of Alaska.

This decision by the Department of Interior is a positive step toward further development the vast resources in the Arctic region. The announcement is a clear nod of recognition that Shell is meeting safety requirements and is an acknowledgement that the abundant Arctic resources can be developed safely.

As we noted last week, the United States took over leadership of the Arctic Council, an intergovernmental forum created in 1996 to promote cooperation and coordination and address issues facing the eight Arctic-nation governments and the region.  Given the Obama Administration’s lackluster record of supporting energy development, all eyes are now on us. 

The National Petroleum Council’s recent study on Arctic Potential noted that “the oil and gas industry has a long history of successful operations in arctic conditions enabled by continuing technology and operational advances” and that “most of the U.S. Arctic offshore conventional oil and gas potential can be developed using existing field-proven technology.”

Since the global Arctic contains 25% of the world’s remaining oil and gas resources that can be developed with existing technology, it is no wonder that so much attention is now on the region. Approving Shell’s application is a good first step, but there’s a lot more potential out there which would bring long term economic and security benefits to the United States and the rest of the world.