Arctic fossil fuel choices

Last week, protestors in Seattle rallying against drilling for oil and gas in Arctic waters carried signs calling for, among other things, “Climate Justice.”  The protests were aimed against a decision by the U.S. Bureau of Ocean Energy Management (BOEM) to grant conditional approval for exploratory drilling in Arctic waters to Shell.  Frankly, it’s not clear how stopping drilling in the U.S. – jurisdictional Arctic territory would lead to “climate justice.” In fact it could even exacerbate global environmental problems.

First, the drilling permits are conditional; and secondly there is no guarantee that Shell will find adequate volumes of oil or natural gas which could be produced economically and sold competitively in global markets.  Even if fossil fuels could be produced from U.S. Arctic waters, that future production would continue to be environmentally regulated by Alaska state and federal agencies, including the U.S. Environmental Protection Agency, as well as by the BOEM.

{mosads}But what if these future new fossil fuel supplies were not produced from U.S. Arctic waters? And what if global demand for fossil fuels continues to grow? There’s little disagreement among experts on the answer to that question. The International Energy Agency predicts that world primary energy demand will be 37 percent higher in 2040 than it was last year.

The U.S. Geological Survey indicates that the 21 million square miles of the Arctic Circle includes more than 400 oil and gas accumulations. Future oil and natural gas demand could be met by other suppliers from the Arctic area, such as the Russians (whose Arctic shelf is believed to hold half of the total Arctic reserves ) or from other stakeholders, such as those who own new global oil fields off the African coast, in China and other locations.

Would there really be “climate justice” if new fossil fuel supplies came to the market from other sources, at the full volumes necessary to balance supply and demand, but without the stringent environmental rules and oversight of U.S. environmental regulators? Alaskan protestors in Seattle may have legitimate parochial reasons for opposing oil and gas production in their state. But global “climate justice” may be diminished and not advanced by their protests.

Terzic is an independent consulting engineer, former gas company CEO, former commissioner on the U.S. Federal Energy Regulatory Commission and a former commissioner on the State of Wisconsin Public Service Commission.