Could the allure of drilling in the Arctic be wearing off?
This comment by Reuters says it all:
"The high Arctic, once the irresistible frontier for oil and gas exploration, is quickly losing its appeal as energy firms grow fearful of the financial and public relations risk of working in the pristine icy wilderness."
Shell’s blunders this winter have spread fear across the oil industry and why bother when there are so many cheaper, more accessible places to plunder?
Luckily, Shell’s mishaps didn’t result in a catastrophe, but the potential for that and the fact that the company laid out $4.5 billion with nothing to show for it is putting other oil companies off.
And there are inevitable lawsuits.
Shell cancelled plans to drill there this year and they may not be back.
"The interest to develop oil and gas is very high, but nevertheless there is more and more concern about the environment and the risk part of it," Harald Norvik, a ConocoPhillips board member and a former Statoil CEO, told Reuters.
"The reality is that going forward, the obvious demonstration of climate change in the Arctic will affect policymakers and boardrooms for years to come, and I see that more clearly now than five years ago or three years ago," he adds.
Instead, oil companies are looking at places like Argentina, Tanzania and Mexico, where there is probably as much oil as in the US Gulf. These resources are certainly easier to reach and thus much less expensive and treacherous.
Then there’s shale oil, which isn’t cheap, but neither is deepwater drilling. There are deposits around the world, such as Russia, China, South Africa and Argentina.
Russia still plans to develop their oil resources, as does Norway, which charges oil companies a carbon tax.