Place your bets in the Arctic oil casino!

Posted by Richardg — 30 March 2011 at 10:04am - Comments
Melting icebergs in the path of rigs in the Arctic, the latest oil frontier
All rights reserved. Credit: Will Rose / Greenpeace
Melting icebergs in the path of rigs in the Arctic, the latest oil frontier

Drilling in the Arctic is a risky business. So it’s a good thing that the only company with a license to drill in the Arctic isn’t comparing the whole endeavour to hanging out in Vegas and trying your hand at shooting craps.

Oh wait. That’s exactly what they’re doing.

Bill Gammell, head of Cairn Energy, has been delighting the Daily Telegraph by describing Arctic exploration as "like going into a casino" (only with more polar bears). "It's high risk,” he says, “but you do everything you can to minimise that risk through technical expertise and having a team that has made great leaps and is hopefully going to be successful again."

Phew, that’s reassuring. It sounds like they’re aware of the potential disaster and are taking the necessary precautions. Except that Sir Bill isn’t talking about the likelihood of an Arctic leak or the problems of trying to clean a pod of oil-covered whales. He’s talking about the risk of failing to find any oil and the damage that would do to their share value.

Last year Cairn managed to drill a handful of shallow wells, but didn’t discover any oil. Not that that's discouraged them: Sir Bill splashed out on a £3m house, and Cairn’s directors have reaped a windfall from selling their shares. It seems no matter where the roulette wheel stops, the house always wins.

This year they’ve got bolder, riskier plans: heading off to Greenland and drilling four new wells. These aren’t like the shallow well they drilled last time: they’re deep wells, 1,500m deep. Cairn wants to drill as far into the earth as the Deepwater Horizon, but in the Arctic, not the Gulf of Mexico.

An oil spill in that environment wouldn’t just be a disaster. It would cause irreparable damage to an untouched landscape; damage which can’t be stopped by bunging a handful of golfballs down the pipe and hoping for the best. It’s really hard to stop an oil leak when you’re dodging icebergs and only have a few months to work before the leak – and the millions of gallons on oil pouring into the Arctic Sea – disappears for the winter under several metres of sea ice.

This isn’t about solving the oil crisis. It takes between ten and fifteen years to bring a new well online. Even if Cairn struck gold tomorrow, we’d be waiting a decade before the first drops reached British petrol pumps.

Instead, like the red-eyed gambler who just can't quit, Cairn Energy is placing insane bets on hitting the jackpot in the Arctic. The result is keeping us hooked on dirty, dangerous energy sources, when we could be supporting cleaner technologies and cutting energy demand.

Maybe instead of risking the event of a disaster by drilling there they should go to there local street and set up a lemonade stall just to be on the safe site!

It is true that Oil is an addiction. No matter what the downside is...we cannot just away from it.

I understand that these oil companies don't give a damn about the environment.

However, from a purely business and economic point of view, they are focussing on the wrong areas. They need to diversify into renewables.

They need to become energy companies rather than beleaguring the oil.

Bad strategy. One day, they will wake up and see that oil is gone and the market for energy has been captured by companies focussing on renewables.

 

"I understand that these oil companies don't give a damn about the environment." How did you come to that conclusion. If you only limit yourself to the propaganda pedelled on this website, perhaps. Do some research and learn about the environmental assessments these companies need to undertake, read about the government red tape and hoops that these companies have to jump thru, look at the all the preparation work that has taken place to allow these companies to undertake these explorations. Done that, ok? Now explain to me how the massive environmental mistakes that have blighted the North Sea drilling for the past 30 years have impacted my world. What? None? Surely not - you say these companies are killing the world? Oh I see, just the frontier companies. Get a decent argument, THEN I might listen.

In response to your comment, Meg Hender, although this article focuses on the potential impact of an oil spill, ultimately is the fact that Cairn Energy aim to make money from crude oil not proof in itself of their disregard for the environment? Rightfully they must ensure that environmental assessments have been carried out, but it has also been proven that the extent of such research done by energy companies isn't enough to predict all potential consequences, as the computer modelling used cannot adequately predict the outcome for every situation. Moreover, they are still searching for oil which will go on to cause global warming, and therefore damaging the environment irreversibly no matter what lengths they may go to in order to ensure they are given the go ahead to drill. Is this not the underlying argument?

@Meg Hender: We all see the world through our own lenses.

Yes, the oil companies do do due diligence, but, that is only what is mandated by  the government (which itself may not be adequate)....I think WGC was also hinting towards this. Also, you say "my world"....there is only one world for you, me, and the animals and plants.

Anyways, my point here was that oil companies need to play a broader role and invest in alt energy.

Why waste a lot of money on going after remote oil reserves? Also, we need oil as a raw material for plastics, paints, coatings, you name it. We cannot replace oil as a raw material, but, we can for energy.

From your comment, you sound like someone associated with (but, not directly part of) the oil industry....may be consulting to the oil industry or research in oil?

If you are a consultant, I challenge you be the change agent for the oil industry. Rather than being in the business of supplying oil and gas, the oil companies need to be in the business of supplying energy and raw materials for the chemical industry.

Look beyond the obvious!

PS - Your observation that this site is propogandist did not keep you from visiting and engaging....that's what we want...balance, engagement.

@WGC: Thanks for your supporting comment!

Come on folks,
this is a no-brainer......... greed has to be stopped somewhere, and if nobody's waking up to the potential disaster in the making then at least those people don't deserve the beautiful planet they're living on......... bloody pity is that they are dragging us down with them.......
UNLESS of course we (globally) get some action going... suggest that we support Greenpeace as a starter.......

@PareshB: no problem, you make some great points!
@Rosemarie Greenbank: well said, I can't stand ignorance surrounding environmental issues! Greenpeace is a great way forward.  

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