Safe, Responsible Arctic Drilling for Our Future

Mark Green
Posted April 1, 2015

News that the Interior Department has reaffirmed Shell’s right to drill in the Chukchi Sea off the Alaskan coast is an important step toward to Arctic energy development. While the company still must secure individual drilling permits and overall federal approval of its exploration plan, this week’s action advances the larger objective of safe and responsible development of an extremely valuable energy reserve. Interior Secretary Sally Jewell:

“The Arctic is an important component of the Administration’s national energy strategy, and we remain committed to taking a thoughtful and balanced approach to oil and gas leasing and exploration offshore Alaska.”

The oil and natural gas industry agrees. In official comments to the federal Bureau of Ocean Energy Management (BOEM), API and seven other industry-related associations argue that developing Arctic oil and natural gas off the coast of Alaska is essential to U.S. energy security. It’s also vital to the “long-term viability” of the Trans-Alaskan Pipeline System that connects Alaskan energy with the Lower 48. Developing Arctic energy is one of the keys to a robust offshore leasing program, which the federal government is drawing up right now.

A new report from the National Petroleum Council (NPC) underscores the importance of Arctic energy development. Responding to a request from Energy Secretary Ernest Moniz, NPC found that large U.S. oil and natural gas potential in the Arctic can “contribute significantly to meeting future U.S. and global energy needs.” The technology, drilling skill and advances in oil spill prevention and response exist to ensure safe and responsible development, NPC says.

Developing these Arctic reserves is consistent with the actions of an energy superpower. The report:

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.

An NPC chart shows the potential of U.S. Arctic energy reserves compared to other nations:

The report notes that oil and natural gas activities in the Arctic have produced more than 25 million barrels of liquids and 550 trillion cubic feet of natural gas. An estimated reserve base contains 38 billion barrels of liquids and 920 trillion cubic feet of natural gas oil and natural gas. The report:

Given the resource potential, and long timelines required to bring Arctic resources to market, Arctic exploration today may provide a material impact to U.S. oil production in the future, potentially averting decline, improving U.S. energy security, and benefitting the local and overall U.S. economy.

More in a video produced by NPC:

The question is whether the United States will put access policies in place that allow this energy to be harnessed – creating jobs, boosting state and national economies and making America’s future more energy secure. Decisions made now are essential to future production. The report:

Why pursue Alaskan exploration and development now? The answer to this question lies in the long lead times involved in exploration and development in Alaska, compared with other sources of U.S. oil production, and the potentially transitory nature of the current world oil supply/demand situation. If development starts now, the long lead times necessary to bring on new crude oil production from Alaska would coincide with a long-term expected decline of U.S. Lower 48 production. Alaskan opportunities can play an important role in extending U.S. energy security in the decades of the 2030s and 2040s. … However, these new sources of crude oil production in the 2030s and 2040s will only be available if new offshore exploration drilling can ramp up in Alaska during this decade.

We have the technology, the skills and expertise and safety infrastructure to responsibly develop America’s Arctic energy. Needed is the energy policy to foster that development – starting with the BOEM federal leasing program, whose draft unfortunately takes too much acreage off the table, in Alaskan waters and others on the outer continental shelf. Offshore development is a great opportunity to make the U.S. more energy secure, but development can’t occur if access to reserves is blocked by too-timid policy decisions.