The Executive Order opening up areas of the Continental Shelf to oil and gas development announced by the White House on Friday has provoked a predictable storm of outrage from environmental groups.
At the heart of the opposition is the question of whether to allow industry access to the significant resources which lie under the Chukchi and Beaufort seas in the Arctic. For ENGOs the issue is a critical one, an unbreakable shibboleth. Accordingly, every possible argument against development has been deployed.
Unfortunately, many of these fail to acknowledge a number of realities, and thus only tell half the story about the challenges and opportunities that come with offshore energy development in America's far north.
The justification most frequently given is that industry simply isn't interested in the Arctic. While there certainly was a decrease in activity after Shell withdrew from the region in 2015, there's been a spate of movement since. In the last six months Eni submitted a development proposal to the Bureau of Ocean Management, the Arctic Slope Regional Corporation acquired 21 leases in the Beaufort, Caelus Energy announced a world class oil discovery and the State of Alaska held an "outstanding" leasing round.
Ultimately the most accurate barometer of appetite is the fact that industry has been calling for this for over a year. Among others, those efforts include a seven figure advertising campaign by a coalition of Alaskan and national organizations to publicly voice their support for offshore energy development.
One of the key arguments that campaign attempted to articulate is that Arctic offshore energy isn't a short-term play; building out the infrastructure needed to safely develop resources will take time, likely over a decade. That point hits on the second main charge against Arctic energy – that the region lacks the facilities to safely extract oil resources.
Again there is some truth in the claim, the Arctic is infrastructure poor. But the position is a circular argument, a self-fulfilling prophecy, which ignores the point that the oil and gas industry is effectively the only source of major investment in the region. Without it, there is little prospect that the ports, roads and airports that local communities need will built, and the region will be condemned to a future as some kind of wilderness themed eco-park, bereft of the economy that those in the lower 48 take for granted.
That unavoidable fact is reflected in the attitudes of many of the people who live in the Arctic. Too often environmental groups talk about the need to protect subsistence hunting traditions of Native groups, while simultaneously ignoring their views.
There are undoubtedly some on the North Slope who are opposed to oil and gas activity in Arctic waters, but evidence would suggest that a majority are in favor. In 2016 an Arctic Energy Center survey found that 72% of Native respondents are supportive, a statistic that is substantiated by the testimony of numerous community leaders.
Finally opponents have attacked Arctic energy on the basis of commercial viability, claiming that it doesn't make sense in the current price environment and thus, that holding lease sales is a costly and unnecessary irrelevance. Once again there's some truth in this argument; clearly with the price of crude hovering around $50, offshore energy is a difficult proposition.
But again the key point here is the length of time involved. By the time Arctic resources become available in the mid to late 2020's it's difficult, if not impossible, to predict where the oil price will be (though it's worth noting the Energy Information Agency forecasts global demand will grow strongly). At that point Arctic offshore plays may make sense financially. And in the meantime, as Secretary Zinke noted, leases sales could provide an important source of revenue for the government.
Energy development in the Arctic is not without its challenges, and it's important that we have a full and frank discussion about how to address them. But that conversation should include all of the facts and not just those that are convenient.
Oliver Williams is a spokesperson for the Arctic Energy Center.
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