Exploration for petroleum in the Arctic is expensive and challenging both technically and logistically. In the offshore, sea ice can be a major factor.[1] There have been many discoveries of oil and gas in the several Arctic basins that have seen extensive exploration over past decades but distance from existing infrastructure has often deterred development. Development and production operations in the Arctic offshore as a result of exploration have been limited, with the exception of the Barents and Norwegian seas. In Alaska, exploration subsequent to the discovery of the Prudhoe Bay oilfield has focussed on the onshore and shallow coastal waters.
Technological developments such as Arctic class tankers for Liquefied Natural Gas, and climatic changes leading to reduced sea ice, may see a resurgence of interest in the offshore Arctic should high oil and gas prices be sustained and environmental concerns mitigated.
Since the onset of the 2010s oil glut in 2014, and, in North America particularly, the widespread development of shale gas and oil depressed prices. Consequently commercial interest in exploring many parts of the Arctic has declined.[1][2]
A 2008 United States Geological Survey estimates that areas north of the Arctic Circle have 90 billion barrels of undiscovered, technically recoverable oil (and 44 billion barrels of natural gas liquids ) in 25 geologically defined areas thought to have potential for petroleum. This represents 13% of the undiscovered oil in the world. Of the estimated totals, more than half of the undiscovered oil resources are estimated to occur in just three geologic provinces – Arctic Alaska, the Amerasian Basin, and the East Greenland Rift Basins.[3][4][5]
More than 70% of the mean undiscovered oil resources is estimated to occur in five provinces: Arctic Alaska, Amerasian Basin, East Greenland Rift Basins, East Barents Basins, and West Greenland–East Canada. It is further estimated that approximately 84% of the undiscovered oil and gas occurs offshore. The USGS did not consider economic factors such as the effects of permanent sea ice or oceanic water depth in its assessment of undiscovered oil and gas resources. This assessment is lower than a 2000 survey, which had included lands south of the arctic circle.[3][4][5]
A recent study carried out by Wood Mackenzie on the Arctic potential comments that the likely remaining reserves will be 75% natural gas and 25% oil. It highlights four basins that are likely to be the focus of the petroleum industry in the upcoming years: the Kronprins Christian Basin, which is likely to have large reserves, the southwest Greenland basin, due to its proximity to markets, and the more oil-prone basins of Laptev and Baffin Bay.
1st shallow water year-round manned GBS production in the Arctic (Prirazlomnaya platform)
Canada
Drilling in the Canadian Arctic peaked during the 1970s and 1980s, led by such companies as Panarctic Oils Ltd. in the Sverdrup Basin of the Arctic Islands, and by Imperial Oil and Dome Petroleum in the Beaufort Sea-Mackenzie Delta Basin. Drilling continued at declining rates until the early 2000s. In all, some 300,000 km of seismic and 1500 wells were drilled across this vast area. Approximately 1.9 billion barrels (300×10^6m3) of oil and 32.4trillion cubic feet (9.2×1011m3)[7] of natural gas were found in 73 discoveries, mostly in the two basins mentioned above, as well as further south in the Mackenzie Valley. Although certain discoveries proved large, the discovered resources were insufficient to justify development at the time. All the wells which were drilled were plugged and abandoned.
Drilling in the Canadian Arctic turned out to be challenging and expensive, particularly in the offshore where drilling required innovative technology. Short operating seasons complicated logistics for companies who had to contend with the additional risk of variable ice conditions.[1]
Exploration has demonstrated that several sedimentary basins in the Canadian Arctic are rich in oil and gas. In particular, the Beaufort Sea-Mackenzie Delta Basin has a discovery record for both gas (onshore) and oil and gas (offshore) although the potential beneath the deeper waters of the Beaufort Sea remains unconfirmed by drilling. Discoveries in the Sverdrup Basin made between 1969 and 1971 are principally of gas. The several basins in the eastern Arctic offshore have seen little exploration activity.
According to Russia's media, the geologists returned with the "sensational news" that the Lomonosov ridge was linked to Russian Federation territory, boosting Russia's claim over the oil-and-gas rich triangle. The territory contained 10bn tonnes of gas and oil deposits, the scientists said.[9]
Greenland
In the years post 2000, sedimentary basins offshore Greenland were believed by some geologists to have high potential for large oil discoveries.[10] In a comprehensive study of the potential of Arctic basins published in 2008,[11] the U.S. Geological Survey estimated that the waters off north-eastern Greenland, in the Greenland Sea north and south of the Arctic Circle, could potentially contain 50 billion barrels of oil equivalent (7.9 x 10^9 m^3) (an estimate including both oil and gas).[12] None of this potential has been realized.
Prospecting took place under the auspices of NUNAOIL, a partnership between the Greenland Home Rule Government and the Danish state. Various oil companies secured licences and conducted exploration over the period 2002 to 2020. Much seismic exploration and several wells were drilled offshore western Greenland, but no discoveries were announced. Drilling proved expensive and the geology more complex than expected, discouraging further investment.[13]
Greenland has offered 8 license blocks for tender along its west coast by Baffin Bay. Seven of those blocks were bid for by a combination of multinational oil companies and the National Oil Company NUNAOIL. Companies that have participated successfully in the previous license rounds and have formed a partnership for the licenses with NUNAOIL are, DONG Energy, Chevron, ExxonMobil, Husky Energy, Cairn Energy. The area available, known as the West Disko licensing round, is of interest because of its relative accessibility compared to other Arctic basins as the area remains largely free of ice. Also, it has a number of promising geological leads and prospects from the Paleocene era.
In 2021, following the election of a new executive, the Greenland government announced it would cease petroleum licensing and disband the state oil company Nunaoil.[14] This political development, combined with the high costs of drilling exploratory wells and discouraging exploration results to date, it is unlikely that the Greenland offshore will see further exploration for the foreseeable future.[15]
In September 2012 Shell delayed actual oil drilling in the Chukchi until the following summer due to heavier-than-normal ice and the Arctic Challenger, an oil-spill response vessel, not being ready on time.[17] However, on September 23, Shell began drilling a "top-hole" over its Burger prospect in the Chukchi. And on October 3, Shell began drilling a top-hole over its Sivulliq prospect in the Beaufort Sea, after being notified by the Alaska Eskimo Whaling Commission that drilling could begin.[18]
In September, 2012, Statoil, now Equinor, chose to delay its oil exploration plans at its Amundsen prospect in the Chukchi Sea, about 100 miles northwest of Wainwright, Alaska, by at least one year, to 2015 at the earliest.[19]
In 2012 Conoco planned to drill at its Devil's Paw prospect (part of a 2008 lease buy in the Chukchi Sea 120 miles west of Wainwright) in summer of 2013.[20] This project was later shelved in 2013 after concerns over rig type and federal regulations related to runaway well containment.[21][22]
October 11, 2012, Dep. Secretary of the Department of the Interior David Hayes stated that support for the permitting process for Arctic offshore petroleum drilling will continue if President Obama stays in office.[23]
Shell, however, announced in September 2015 that it was abandoning exploration "for the foreseeable future" in Alaska, after tests showed disappointing quantities of oil and gas in the area.[24]
On October 4, 2016 Caelus Energy Alaska announced its discovery at Smith Bay could "provide 200,000 barrels per day of light, highly mobile oil".[25]
Norway
Rosneft and Equinor (then Statoil) made the Arctic exploration deal in May 2012. It is the third deal Rosneft has signed in the past month, after Arctic exploration agreements with Italy's Eni and US giant ExxonMobil.[26] Compared to other Arctic oil states, Norway is probably best equipped for oil spill preparedness in the Arctic.[1]
Environmental concerns
Petroleum exploration and production operations in the Arctic have faced concerns from organizations and governments about the potential for detrimental environmental consequences. Firstly, in the event of a large oil spill, the effects on Arctic marine life (such as Polar Bears, Walruses and seals) could be calamitous. Secondly, pollution from ships and noise pollution from seismic exploration and drilling, could negatively affect fragile Arctic ecosystems and may lead to declining populations. Such issues concern Indigenous populations who live in the Arctic and rely on such animals as food sources.
In response to these concerns, the Arctic Council working group on Arctic Monitoring and Assessment Programme (AMAP) undertook a comprehensive review of Oil and Gas Activities in the Arctic - Effects and Potential Effects.[27] In another initiative, Greenpeace, an independent global campaigning network, have launched the Save the Arctic Project since the melting Arctic is under threat from oil drilling, industrial fishing and conflict.[28]
Response of governments to mounting concerns about the risk of petroleum operations in the Arctic offshore include regulatory changes and the moratorium on offshore leasing issued in 2016 for the Arctic marine waters of both the United States and Canada[29] (and subsequently in Canada a prohibition of oil and gas operations). Consequently, no leasing or operations have been approved for the Canadian Arctic offshore since that year.
In 2021, the Greenland government ended plans for future licensing for offshore exploration citing high costs and climate change impacts.[14]
A summary of the status of offshore oil and gas activities and regulatory frameworks in the Arctic was published by PAME in 2021. (Program for the Protection of the Arctic Marine Environment.).[30] The Deepwater Horizon disaster in the Gulf of Mexico stimulated much concern about the consequences of a similar event in Arctic waters and has resulted in many developments in regulation of operations and management of oil and gas leasing by countries active in Arctic exploration.
In 2021, the Arctic Environmental Responsibility Index (AERI) was published that ranks 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle in Alaska, Canada, Greenland, Finland, Norway, Russia, and Sweden.[31] The Index measures companies' environmental activities and demonstrates that oil and gas companies are generally ranked higher than mining companies operating in the Arctic.[31]
ConocoPhillips Company is an American multinational corporation engaged in hydrocarbon exploration and production. It is based in the Energy Corridor district of Houston, Texas.
The Straits of Florida, Florida Straits, or Florida Strait is a strait located south-southeast of the North American mainland, generally accepted to be between the Gulf of Mexico and the Atlantic Ocean, and between the Florida Keys (U.S.) and Cuba. It is 93 mi (150 km) wide at the narrowest point between Key West and the Cuban shore, and has been sounded to a depth of 6,000 feet (1,800 m). The strait carries the Florida Current, the beginning of the Gulf Stream, from the Gulf of Mexico.
The Beaufort Sea is a marginal sea of the Arctic Ocean, located north of the Northwest Territories, the Yukon, and Alaska, and west of Canada's Arctic islands. The sea is named after Sir Francis Beaufort, a hydrographer. The Mackenzie River, the longest in Canada, empties into the Canadian part of the Beaufort Sea west of Tuktoyaktuk, which is one of the few permanent settlements on the sea's shores.
The Alaska North Slope is the region of the U.S. state of Alaska located on the northern slope of the Brooks Range along the coast of two marginal seas of the Arctic Ocean, the Chukchi Sea being on the western side of Point Barrow, and the Beaufort Sea on the eastern. With the exception of the highway connecting Fairbanks to Prudhoe Bay, the region is disconnected from the rest of the Alaskan road system and relies mostly on waterways and small airports for transportation due to the Brooks Range secluding the region from the rest of the state.
The Shtokman field, one of the world's largest natural gas fields, lies in the northwestern part of the South Barents Basin in the Russian sector of the Barents Sea, 600 kilometres (370 mi) north of Kola Peninsula. Its reserves are estimated at 3.8 trillion cubic metres of natural gas and more than 37 million tons of gas condensate.
The question of whether to drill for oil in the Arctic National Wildlife Refuge (ANWR) has been an ongoing political controversy in the United States since 1977. As of 2017, Republicans have attempted to allow drilling in ANWR almost fifty times, finally being successful with the passage of the Tax Cuts and Jobs Act of 2017.
Canada's early petroleum discoveries took place near population centres or along lines of penetration into the frontier.
Equinor ASA is a Norwegian state-owned multinational energy company headquartered in Stavanger, Norway. It is primarily a petroleum company operating in 36 countries with additional investments in renewable energy. In the 2020 Forbes Global 2000, Equinor was ranked as the 169th-largest public company in the world. As of 2021, the company has 21,126 employees.
Prudhoe Bay Oil Field is a large oil field on Alaska's North Slope. It is the largest oil field in North America, covering 213,543 acres (86,418 ha) and originally contained approximately 25 billion barrels (4.0×109 m3) of oil. The amount of recoverable oil in the field is more than double that of the next largest field in the United States by acreage (the East Texas Oil Field), while the largest by reserves is the Permian Basin (North America). The field was operated by BP; partners were ExxonMobil and ConocoPhillips until August 2019; when BP sold all its Alaska assets to Hilcorp.
Offshore oil and gas in the United States provides a large portion of the nation’s oil and gas supply. Large oil and gas reservoirs are found under the sea offshore from Louisiana, Texas, California, and Alaska. Environmental concerns have prevented or restricted offshore drilling in some areas, and the issue has been hotly debated at the local and national levels.
Offshore drilling for oil and gas on the Atlantic coast of the United States took place from 1947 to the early 1980s. Oil companies drilled five wells in Atlantic Florida state waters and 51 exploratory wells on federal leases on the outer continental shelf of the Atlantic coast. None of the wells were completed as producing wells. All the leases have now reverted to the government.
Vladimir Ignatyuk is a Russian icebreaking anchor handling tug supply vessel. She was built by Burrard-Yarrows Corporation in Canada in 1983 as Kalvik as part of an Arctic drilling system developed by BeauDril, the drilling subsidiary of Gulf Canada Resources. After the offshore oil exploration in the Beaufort Sea ended in the early 1990s, she was sold to the Canadian shipping company Fednav in 1997 and renamed Arctic Kalvik. In 2003, she was purchased by Murmansk Shipping Company and transferred to Russia.
Mount Elbert Methane Hydrate Site
The natural resources of the Arctic are the mineral and animal natural resources which provide or have potential to provide utility or economic benefit to humans. The Arctic contains significant amounts of minerals, boreal forests, marine life, and fresh water.
The Nanushuk Group or Nanushuk formation is a geologic group in Alaska in westernmost National Petroleum Reserve in Alaska (NPR-A). Oil in these rocks likely was generated beneath Western North Slope and migrated northeastward into NPR-A. It preserves fossils dating back to the Cretaceous period. Underneath the Nanushuk lies the Torok Formation.
Single steel drilling caisson is a drill barge that was built for year-round oil exploration in shallow ice-covered waters in the Beaufort Sea. The unit, initially named SSDC and later shortened to SDC, was converted from an old oil tanker in the early 1980s. It has been used to drill a total of eight oil wells on both Canadian and U.S. continental shelves, the most recent in 2006.
The Arctic resources race is the competition between global entities for newly available natural resources of the Arctic. Under the United Nations Convention of the Law of the Sea, five nations have the legal right to exploit the Arctic's natural resources within their exclusive economic zones: Canada, Russia, Denmark, Norway, and the United States.
Kigoriak is a Russian icebreaking anchor handling tug supply vessel. Built by Saint John Shipbuilding & Dry Dock Company for Canadian Marine Drilling (Canmar) in 1979 as Canmar Kigoriak, she was the first commercial icebreaking vessel developed to support offshore oil exploration in the Beaufort Sea.
The Alaskan North Slope (ANS) is a foreland basin located on the northern edge of the Brooks Range. The Alaska North Slope is bounded on the north by the Beaufort Sea and runs from the Canadian border to the maritime boundary with Russia in the west. The western edge extends into the Chukchi Sea and Chukchi platform where the basin is at its widest. As the basin moves east it narrows towards the Canadian border. The basin is 1000 km long, 600 km at its widest, and covers a total area of 240,000 km2.
References
1 2 3 4 Gulas, Sarah; Downton, Mitchell; D'Souza, Kareina; Hayden, Kelsey; Walker, Tony R. (January 2017). "Declining Arctic Ocean oil and gas developments: Opportunities to improve governance and environmental pollution control". Marine Policy. 75: 53–61. doi:10.1016/j.marpol.2016.10.014.
1 2 Overland, I., Bourmistrov, A., Dale, B., Irlbacher‐Fox, S., Juraev, J., Podgaiskii, E., Stammler, F., Tsani, S., Vakulchuk, R. and Wilson, E.C. 2021. The Arctic Environmental Responsibility Index: A method to rank heterogenous extractive industry companies for governance purposes. Business Strategy and the Environment. 30, 1623–1643. https://onlinelibrary.wiley.com/doi/10.1002/bse.2698
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