Arctic Drilling Disaster
World's Biggest Insurance Market Fights Arctic Drilling
Arctic drilling is a growing possibility as companies plan to take advantage of melting ice caps and oil abundance.
Total S.A. (NYSE: TOT) is interested in the Russian-owned Shtokman field in the Barents Sea. Cairn Energy (LON: CNE) and Shell (NYSE: RDS.A) have sights set on areas in Canada and Greenland. And BP (NYSE: BP) is making plans to develop in Russia’s Yamal-Nenets.
But the risks of drilling in so delicate a location, where wildlife and ecosystems are already struggling from climate change, are high.
Lloyd’s of London, the largest insurance market in the world, spoke out on behalf of environmentalists.
In a report by Charles Emmerson and Glada Lahn, Lloyd’s urges the companies, and the world, to consider what this sort of development could do:
“Migration patterns of caribou and whales in offshore areas may be affected. Other than the direct release of pollutants into the Arctic environment, there are multiple ways in which ecosystems could be disturbed, such as the construction of pipelines and roads, noise pollution from offshore drilling, seismic survey activity or additional maritime traffic as well as through the break-up of sea ice.”
There have been danger signs already, especially when two of the aforementioned companies all too recently dealt with oil spills. But Lloyd’s estimated that over $100 billion in oil investing in the Arctic will occur in the next 10 years.
The report urges companies to gain knowledge of the areas and the ecosystems. They should at least know something about the nature of the areas they are planning to pollute.
Another problem highlighted is that oil will likely take longer to biodegrade in the icy Arctic temperatures than, say, the Gulf. Clean up would be much more complicated.
And it’s an area with messy political borders. Should a spill occur, there would be a confusing struggle when dealing with liability and damage payment.
The report reminds its readers of the BP disaster in the Gulf. The complications were enough when one company and legal boundary were involved. And luckily, the company was large enough to afford the compensation without filing for bankruptcy. Any change in the scenario would mean a whole new ballgame.
And still the marine life seems to get lost as the legal and financial issues are highlighted. Species are struggling to survive amid a melting world. What would industrial invasion mean for them?