BP Gives Up Arctic Drilling Dreams

Beufort Sea

Anyone who watched in horror as the Deepwater Horizon disaster unfolded will be relieved to know that BP has given up plans to procure an exploration license in Greenland. It's a political move more than anything else—as one source told the UK Guardian, "With the Greenpeace ship already harassing Cairn off Greenland—a company which has an exemplary safety record—everyone realised it would be political madness to give the green light to BP."

But BP isn't the only oil company with designs on Arctic drilling. And while BP may be notorious for its abysmal safety record, drilling in the Arctic is risky for any oil company. So whom should we be watching?

Cairn Energy, a Scottish oil and gas exploration company, announced earlier this week that it discovered gas off the Greenland coast. But it hasn't yet found enough hydrocarbons to make drilling worthwhile. According to the Wall Street Journal, Cairn will need to find at least 250 million barrels of oil or trillions of cubic feet of gas for a worthwhile project. Cairn isn't going anywhere, however—the company plans to spend $1 billion over three years in the region as it searches for oil and gas.

Shell is also eagerly anticipating Arctic drilling success. The company has already spent $3 billion on plans to drill wells in the Beaufort and Chukchi seas. Now Shell is waiting President Obama to give its drilling plans the go-ahead.

Exxon, too, is hoping to strike black gold in the Arctic. The oil giant's Ajurak lease, located nearly 90 miles off Canada's north shore, was purchased for $600 million in 2007. Drilling has not yet begun.

Are Cairn, Shell, and Exxon all more trustworthy than BP? It's hard to say. Even a small slip-up in the Arctic will be difficult to correct—with few ports, oil skimmers, and Coast Guard employees available, cleanup for any oil disaster will be much more difficult than in, say, the Gulf. BP may no longer be a threat, but danger in the Arctic remains.

Ariel Schwartz can be reached on Twitter or by email.

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