DOE Advisers Warn US Might Lose Arctic Energy War With Russia, China

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Michael Bastasch DCNF Managing Editor
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The Arctic is home to vast oil and natural gas reserves that Russia and China are eager to tap into, meaning the U.S. needs to start drilling in the north pole to keep ahead of its economic rivals, according to Department of Energy report.

The DOE’s National Petroleum Council is urging the Obama administration to allow for oil companies to develop the Arctic’s vast oil and gas reserves for the sake of national and economic security.

“Internationally, other countries such as Russia are moving forward with increased Arctic economic development during this time of change,” the NPC reported. “Russia is drilling new exploration wells in the Kara and Pechora Seas and is expanding its naval and transportation fleet. While China does not have Arctic territory, it is investing millions of dollars in Arctic research, infrastructure, and natural resource development.”

“To remain globally competitive and to be positioned to provide global leadership and influence in the Arctic, the United States should facilitate exploration in the offshore Alaskan Arctic now,” according to NPC.

Arctic sea ice has shrunk in recent decades, making it easier for oil and shipping companies to traverse the north pole than in the past. Russia has been quick to beef up its military presence in the Arctic as sea ice recedes, and it’s moving forward with oil and gas drilling.

“Russia is estimated to have by far the largest Arctic resource potential… and will continue to be a dominant player in Arctic oil and gas development,” the NPC said in its report. “When considering only Arctic oil potential, however, the United States and Russia are assessed to have approximately equal portions of the conventional resource potential with approximately 35 billion barrels of oil each.”

The Arctic likely holds one-quarter of the world’s undiscovered oil and gas potential, and the U.S. has the technology to reach much of it, especially as shale production in the lower 48 states begins to slow, says NPC.

The NPC report comes as the U.S. is preparing to take control of the multinational Arctic Council. But Secretary of State John Kerry has made global warming, not oil and gas exploration, a major focus of the Council’s upcoming meeting. Likewise, the Obama administration has positioned itself as anti-drilling, especially in the Arctic.

While the Obama administration is considering letting Royal Dutch Shell once again pursue offshore drilling in the Arctic, the White House has pushed for permanently closing the Alaska National Wildlife Refuge to drilling as well as offshore areas in the Arctic seas.

Republicans have repeatedly criticized Obama for hampering offshore drilling — the administration’s latest proposal keeps 87 percent of America’s offshore territory off limits to drilling.

“If this administration is truly committed to developing our Arctic resources then it’s imperative that the Interior Department provide clear direction to Shell and the other leaseholders in the region on how they can proceed,” Alaska Republican Sen. Lisa Murkowski said in a statement.

“It’s important that any changes to existing regulations covering the Chukchi and Beaufort seas allow companies the flexibility to respond to changing conditions and for the deployment of new drilling technologies,” Murkowski said.

But environmentalists have increasingly opposed Arctic drilling. Activists have slammed the NPC’s report, despite worries about Russia’s aggressive Arctic strategy.

“This puts an end to the myth that a relentless rush to fracking can overturn the laws of supply and demand,” Niel Lawrence, a senior attorney at the Natural Resources Defense Council, said in a statement.

“The answer, though, is not to risk a BP-style blowout in Arctic waters where we can’t prevent, contain or clean up a catastrophic oil spill,” Lawrence said. “We need, instead, to break our dependence on the fossil fuel use that is putting our natural systems at risk and driving the dangerous climate change that threatens our future.”

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