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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  • Chris Reich

    This whole story is about the scariest paradox ever presented mankind.

    We burn fossil fuels to brink of shortages. Geopolitical tension rises as competition for carbon based fuels increases. Terror is funded by revenue from oil production, the earth warms. Bad enough? No.

    As the earth warms, we witness floods, heat waves and droughts. Our food supply could very well be in jeopardy. We witness a huge eco disaster in the Gulf of Mexico as oil spews into the sea. We pour toxins on the oil to "disperse" it. Guess what, all this 'stuff' is going into a closed system which means it dilutes but does not disappear. (Yes, given enough time it will degrade and 'disperse')

    Bad enough? Still no.

    As the Earth warms, ice melts, sea levels rise, things are looking bad. But on the bright side, getting that darn ice out of the way opens up a whole new source of oil.

    Am I the only one who sees the dreadful irony of this?

    There are vast fortunes to be made in alternative energy technologies. We are not developing this industry nearly fast enough.

    I would propose a project like the great east-west railroad. Let's insulate the grid from the potential of energy shortages and possible failure caused by a major solar magnetic event. Let's build vast solar farms on that open space from Nevada to the Mississippi River!

    Jobs. New industry. Cheap energy. And we spend over $1 Trillion and suffer life and limb in that horrible waste in Iraq?

    Chris Reich