activists from Greenpeace are taking direct action against oil drilling in the Arctic. Source: Greenpeace
Share this page:
Arctic drilling and its impacts
The United States Geological Survey estimates that 30% of the world's undiscovered gas and 13% of the world's undiscovered oil is to be found north of the Arctic Circle. Of this oil, 84% - approximately 90 billion barrels - is expected to be found offshore, some of it in deepwater. Harsh conditions, low temperatures, operational windows cut short by the winter freeze-over, icebergs that threaten to collide with rigs and a delicate ecology that requires meticulous protection all conspire to make oil production here difficult, risky and expensive, possibly more so than any other region in the world.
Many social and environmental issues characterize Arctic drilling including:
- the contribution to climate change with some parts of the Arctic among the fastest warming areas on the planet, and the massive Greenland Ice Sheet losing ice at record rates,
- the impact of climate change which threatens the livelihood of local communities,
- the health impacts from contaminated water, species, and influence on air quality,
- the very high vulnerability of Arctic ecosystem to oil spills,
- the important threats towards wildlife.
As Greenpeace, Platform and FairPensions showed in their May 2012 report "Out in the Cold", all these risks have an impact on the financial returns of such exploration projects. Oil spill risks, high extraction costs, doubts over the amount of commercially recoverable reserves, and a precedent of cost overruns and delays combine to raise questions about the commercial viability of some proposed Arctic projects.
Arctic Drilling 'dodgy deals'
Sakhalin II oil and gas project: The Sakhalin II project in the Russian Far East is said by project sponsors to be the largest integrated oil and gas project in the world. Sakhalin II is one of the first and oldest dodgy deals BankTrack members have been tracking now for nearly a decade.
Greenland Arctic drilling: Greenpeace International recently launched an international campaign to save the Arctic, targeting several companies including Cairn and Shell. The banks which financed those companies have also been and continue to be exposed.
What must happen
To avoid the devastating impacts of their investments, private banks must take steps to disengage from all activities and projects that substantially contribute to climate change and environmental and communities degradation, by ending support for all new oil extraction and delivery.