Shell In the Arctic

2080 Words5 Pages

A race is underway for the Arctic by a new rush of 21st century pioneers. With icecaps melting, all eyes turn to the Arctic in the hopes of exploiting newfound opportunities. With many existing oil reserves facing depletion, the Arctic is thought to be the final frontier for fossil fuel development. It is estimated approximately 13% of the world's undiscovered oil (90 billion barrels), and 30% of the world's undiscovered natural gas1 lie offshore in the Arctic. Shell, just one of the of the many O&G companies interested in the Arctic, has already spent 6 years and over $5 billion dollars in attempts to drill the pristine north.

Over and above Big Oil’s attention, the Arctic is the center of geopolitical battles, national security interests, and the focus for a plethora of environmental NGO’s and activists alike. Due to shell’s recent history in the arctic, they have become the focal point for many debates since in all their attempts Shell has yet to locate any oil in the Arctic. Recently, following an endless string of incidents and near misses in 2012, Shell decided to pause their Alaskan Arctic drilling mission for 2013, which was then followed by a ban from the US stating “Shell will not be able to move forward into the Arctic to do any kind of exploration unless they have an integrated management plan put in place2”. Additionally, due to a partnership they have with Gazprom, Shell has managed to find it self tangled in the midst of a battle between environmental activists and the Russian Government. Currently, Shell is facing a mess of market and non-market issues with their Arctic exploration, ranging from dropping profits to safety and environmental concerns to NGO’s who want the Arctic to have the same status as the An...

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...both bordering the arctic as well as countries who lay in wait for the seas to open up. These partnerships will enable Shell to ensure that regulations are strict enough to prevent companies such as Gazprom and Rosneft from exploiting the Arctic with their dismal safety and environmental record and they will enable Shell to have access to innovate new technologies required for responsible and sustainable drilling in the arctic. To mitigate the risk of current and future border disputes, which could adversely affect Shell’s plans for the Arctic, it is crucial for the Arctic Council (and the UN?) to dictate the rules of the game when dealing with the Arctic. For the Arctic Council to hold any authority they need to work towards opening up the doors of the arctic council to observers may lead it more transparency and credibility for the council as a governing body.

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