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Drilling in the Arctic - what is theenvironmental impact?Greenpeace activists have been charged with piracy for theirprotest on a Gazprom oil rig. But what are they protesting aboutand what is the justification for their claims? With your help, KarlMathiesen investigates. Post your views below,email karl.mathiesen.freelance@guardian.co.uk ortweet @karlmathiesen.

Karl Mathiesentheguardian.com, Wednesday 2 October 2013 18.48 BST

Welcome to the eco audit

Russia today charged Greenpeace activists with piracy for theirprotest action on a Gazprom oil rig in the Arctic Circle. Russia'spolice action and the potential for draconian punishments(piracy carries a maximum sentence of 15 years in Russia) is "themost serious threat to Greenpeace's peacefulenvironmental activism" since the sinking of the RainbowWarrior, according to Greenpeace executive director, KumiNaidoo.

Apart from Greenpeace's right to protest, what is at stake in theArctic? And why is Greenpeace so concerned about Arcticdrilling in particular?

Today I will be talking to experts, industry and scientists aboutthe potential environmental impacts of an Arctic energy rush.

You too can help with the investigation. Please write yourthoughts in the comments below, or tweet me, or email me. Ifyou are quoting figures or studies, please provide a link throughto the original source. Later I will return with my own verdict.

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What are the risks of drilling for oil and gas in the Arctic? AP/Greenpeace/Steve Morgan

Greenpeace activists hold a demonstration against Champions Leaguesponsor Gazprom last night to draw attention to the incarceration of 30protesters being held by the Russian government. The action delayed thebeginning of the game between FC Schalke and Basel FC. Photograph:Fabrice Coffrini/AFP/Getty Images

The key arguments put forward by Greenpeace

Greenpeace identifies two distinct threats posed by drilling in theArctic. One is the immediate threat of an oil spill. Greenpeaceclaims oil companies do not have appropriate risk mitigationagainst this kind of accident.

The indirect threat to the Arctic ecosystem posed by climatechange and the fossil fuel industry's contribution to carbonemissions is the underpinning motivation for Greenpeace'sactions. Diminishing Arctic sea ice poses a direct threat to theArctic's biodiversity and eventually to the planet, sayGreenpeace.

Their website says Arctic oil exploration is being assisted by themelting ice:

The fragile Arctic is under threat from both climatechange and oil drilling. As climate change melts theArctic ice, oil companies are moving in to extractmore of the fossil fuels that caused the melt in thefirst place. But above the Arctic circle, freezingtemperatures, a narrow drilling window and aremote location mean that an oil spill would bealmost impossible to deal with. It's a catastrophewaiting to happen. Greenpeace is working to halt

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climate change and to stop this new oil rush at thetop of the world.

Shell has been a particular target of Greenpeace. To examinesome of Greenpeace's claims against the Dutch and British-owned company you can read a list of their charges against them.Mostly Greenpeace says it is concerned about the company'sunpreparedness to contain any accident.

"The Arctic is the air conditioner and the refrigerator of theplanet and what happens here affect all of us," says Kumi Naidooin this interview with Bill Moyers.

The great hope of the energy industry

Oil Magazine, an energy industry quarterly, devoted the whole ofits March 2013 issue to Arctic energy exploration. DisappearingArctic sea ice is seen as a huge opportunity for an energyindustry seeking new reserves of fossil fuels. "20% of the world'sunexplored gas and oil potential lies in the Arctic," says Oil.

"The new frontier of energy procurement runs along the ArcticCircle," says editor-in-chief, Gianni di Giovanni.

Economist Geminello Alvi writes: "With the melting of the ice,this most inhospitable of areas might one day be green again,and even inhabited, as in the myths about the Hyperboreans."

It is clear from reading Oil that the energy industry sees anexciting future beneath the Arctic seas. But Oil journalist MoisésNaím says: "Critical environmental, technological, political andinstitutional questions remain unanswered."

Naím says the impacts of climate change have led to inevitableinterest from oil and gas companies as the retreating sea iceexposes large, untapped resources: "The trend, then is forclimate change to make the region more accessible, bolsteringthe attraction to the Arctic's wealth of oil, gas, and mineralsupplies."

But Naím says the cost implications should mean exploration iscautious and mindful of the delicate Arctic environment:

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"Limiting the costs and damages associated with industrialdevelopment, climate change, pollution, natural resourceextraction, and disturbance to the precious ecosystem must beprioritized and monitored with great attention."

Naím identifies two extreme futures for the Arctic. An anarchic,exploitative future where poor governance, activism andpollution are rife and a sustainable, harmonious future in whichgovernments, energy companies and NGOs cooperate to decideon best practice exploration. He admits that the secondalternative seems utopian.

Reaction from drilling industry

Statoil spokesperson Bård Glad Pedersen says the Norwegian oiland gas company is exploring the Arctic through a step-by-stepapproach that builds on decades of experience in cold waterregions.

"Statoil have taken a step-wise approach to the Arctic.A prerequisite to any activity or any drilling is that weare able to do it safely and responsibly. We have 20years experience from the Norwegian Barents Sea inice free areas. We have around 90 wells and alsomade large discoveries. Currently we are drilling inice free areas or ice free periods of the year.

"I think this step-wise approach where youdevelop competence. experience and technology totake on new challenges going forward is the rightapproach to have. We will not move faster into theArctic than technology allows us to make sure thanwe are able to do it safely."

He says different Arctic regions offer different challenges todrilling companies:

"It is important to understand that there are differentareas within the Arctic that present differentchallenges. A substantial part of the Arctic is ice-free.But it could be areas which are dark, remote and

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maybe you could have icing of equipment so you needto take those challenges seriously. I think we are ableto do that.

"Where there's no ice you need to have heatingequipment and insulation to avoid freezing on therigs. On the east coast of Canada, where werecently made a large oil discovery, you need to havea system to manage icebergs who occasionally driftby. We have ships in place to tow them on to differentroutes. In this area there has been oil andgas activity for years and you have these systemsdeveloped."

On the activities of other Arctic exploration companies, he said:"I think there is a general understanding of the challenges in theArctic and the need to develop technology and competence."

A oil rush?

One of the major narratives the green movement hasbeen propagating is that of an oil and gas rush with irresponsiblecompanies storming north trying to beat one another to tapnewly available reserves.

But an article by Paul Betts in Oil Magazine suggests otherwise."After a period of "irrational exuberance," the pace in the Arcticis slowing. In the last year; Royal Dutch Shell, BP and Statoilhave stopped drilling, and Gazprom has suspended theShtokman project," he says.

Betts says the industry may have gotten ahead of itself inits excitement at new opportunities presented by retreating seaice. He said it was clear that the industry had become"increasingly skeptical about the ability of oil companies - atleast for now - to drill, extract and ship the oil and gas safely inthe extreme weather and sea conditions of this remote region".

The enormous costs of developing new technologies wasa deterrent to investment he said. As wellas embarrassing incidents such as the grounding of a Shell rig inJanuary 2013, which highlighted the difficulty of operating in thestorm torn seas of the north.

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Betts says these costs, when combined with low oil prices andcompetition from new energy resources like coal-seam gas andLNG, mean that the Arctic region has become less enticing for oilcompanies.

A report by consultancy firm Ernst and Young said Arcticexploration is "not for the faint of heart, nor for those with lessthan deep pockets".

Betts says extra pressure is being applied to companies byuncertainty over the geopolitics of the Arctic. Russia is one of thekey drivers of Arctic exploration. Oil and gas resources in theregion are key to Russia's geopolitical strategy and energysecurity. "Russia, however, is also fully aware that it cannot dothis by itself and that the development of the oil and gas sector,particularly offshore, depends to some extent of the participationand cooperation of Western oil companies," says Betts.

Reaction from NGOs

Louise Rouse from NGO ShareAction says there are manyexamples of the oil industry's unpreparedness to move into thechallenging Arctic region:

In the case of Russian Arctic projects, the risks thatShell – one of the most advanced and experienced oilcompanies in the world – could not successfullynavigate are compounded by a lack of relevantexperience by the two Russian companies withexclusive rights to drill in the Russian Arctic andwith whom international oil companies like Shell areentering into alliances – Rosneft and Gazprom.

Arctic oil and gas exploration presents new andunique challenges to the oil industry. Thesechallenges are compounded in the Russian Arctic byGazprom and Rosneft’s lack of experience of offshoreprojects at senior level, poor environmental andhealth and safety track records, a lack oftransparency in company reporting and questionablecorporate practices at board level. Theseunpredictable and risky corporate practices are

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compounded by a complex political regime that iscurrently divided over the future of the Russianenergy sector. In this context, the rush to gain accessto the Russian Arctic seas through JVs with and/orshare acquisitions in Russian oil and gas giants,Gazprom and Rosneft, is worthy of investor scrutiny.

To illustrate this lack of experience:

Rosneft:

Has never brought an offshore project toextraction stage as operator.

Responsible for 2,727 or 75% of spills inRussia’s largest oil province Yugra in 2011while extracting only 25% of the total regionaloutput that year.

Still lacks sufficient expertise at appropriatelevels despite recent appointments.

Gazprom

The Kolskaya rig sank, killing 53 of its 67 crewafter Gazprom’s subsidiary Gazflot continueddrilling outside of the approved season andwithout carrying out all necessary assessments

No member of the board of directors hasspecific offshore experience or with specialresponsibility for offshore projects

Has taken no steps to address the lack ofoffshore drilling expertise or oversight at boardlevel.

Gazprom’s headline Arctic JV with Total andStatoil, which was to operate the massiveShtokman field in the Barents Sea, fell apart in2012 after years of delays, a cost rise from$20bn to $40bn and lack of clarity over fiscalconditions made extraction economicallyunfeasible.

Scientific reaction

Professor Rick Steiner from OasisEarth Sustainability Consultancy wrote this assessment of whathe says are the inherent and unavoidable risks of Arcticexploration. I highly recommend a full read of the document asSteiner goes to the heart of today's Eco Audit question.

"Put simply oil drilling in the Arctic Ocean cannot bedone safely – there will be chronic degradation, therewill be spills. So the policy question is whether wewish to expose the Arctic Ocean and its people tosuch risk.

"And, perhaps a larger issue is that all of the carbonproduced from the Arctic seabed will ultimately beemitted into the global atmosphere and oceans,further compounding climate change that is alreadydevastating the Arctic ecosystem."

"I have read nothing that makes me feel this issue isproperly understood"

Reaction is coming in quickly now so stay tuned for furtherupdates.

The Guardian's energy editor, Terry Macalister, has writtenextensively on this topic, including an e-book called PolarOpposites, Opportunities and Threats in the Arctic, publishedlast year.

Today he writes of the need for transparency from explorationcompanies:

The oil industry is looking down a telescope from thewrong end. To them the Arctic area is just anothergeological prospect to be looked at like any other. BigOil has been spurred on by US Geological Surveyorswho claim a quarter of the recoverable hydrocarbonreserves may lie there.

But the far north is a special area - one of the world’slast pieces of wilderness - and should be recognised

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as such: a priceless environmental gem, likeAntarctica which is guarded by international treaty.

Much of the Arctic is untouched by human footprintand there is an array of unique animal species whichlive there and are already in danger. The fact that itis one of the places in the world that is most exposedto climate change makes it ironic, if nothing else,that the oil industry is determined to extract morefossil fuels there.

Drilling for oil is a messy business at the best oftimes. Look at pictures of the early days of Baku tosee what impact it can have on the environment, ormore recently of course the beaches off the Gulf ofMexico.

BP was able to call upon dozens of marine craft tohelp with the Macondo blowout at short notice.Obtaining the same kind of support would have beenmuch harder had there been an oil spill offGreenland when Cairn Energy was drilling there.

There are all sorts of special problems that arise withworking in the Arctic, not least the exact impact of acrude spill in ice conditions. I have read nothing thatmakes me feel this issue is properly understood.

Equally Cairn and the Greenland government bothseemed queasy about releasing details in public of oilspill plans. That secrecy gets to the heart of theproblems in the far north today.

The littoral states that surround the Arctic Oceanwould like the rest of the world to leave them aloneto explore for oil, iron ore or just touristopportunities, none more so than Russia where thegovernment expects to get its own way on mostthings and does not recognise any right to scrutinyby outside interests, certainly not environmentalists.

But if the Arctic is to be left purely to the control ofthe surrounding countries then they owe the rest ofthe world one thing at least: transparency. In the

absence of this we need someone to act boldly as oureyes and ears: if not Greenpeace then who?

More scientific reaction

Professor Klaus Dodds, professor of geopolitics at RoyalHolloway's department of geography, says:

"... drilling in the Arctic varies so very greatlydepending on where you are talking about e.g.Northern Norway is very different to say Alaska.Offshore drilling is less well developed compared toonshore. And places like the Hibernia development isarguably more challenging in the sub-Arctic thanparts of the so-called blue Arctic north of Scandinavia... so geography matters.

"My own view is that the environmental impact needsto be juxtaposed with social-cultural impact as well aspossible benefits. In Greenland, opinion is dividedand one thing to be clear on is that northerncommunities are not always opposed to resourceextraction. The issue is sharing and consultation aswell as regulation."

Dr Simon Boxall from the University of Southampton says that,at present, Arctic drilling does not have the technology to cleanup a spill.

"Companies will say that it won't happen, we've got somany fail-safes these days that it's a perfectly safeoperation. But there's no such thing as a fail-safe. Ifthere was a a fail-safe, we wouldn't have planescrashing... Human error and humans cutting cornersmeans that accidents happen. And there will be a spillin the Arctic. And as with the Gulf of Mexico it'llprobably be fumbling in the dark a bit, dealing with itas it happens."

But Boxall says that the Arctic climate means an oil spill in thefar north could be much harder to clean up than the Deepwater

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Horizon spill in the Gulf of Mexico.

"The environment in the tropics and certainly in theGulf of Mexico is such that nature kicks in and itdeals with oil that gets spilt in the tropicsvery efficiently. Even in fairly temperate climates,bacteria take over and they clean up what we leavebehind. Now in the Arctic things are very different. Inthe Arctic it's much much colder first of all, whichmeans that the whole process takes much longer. Sowe have a problem, the fact that we are putting our oilin the fridge and that keeps it in its natural state.

"Problem number two is the spill, when ithappens, whether it's from a tanker, whether it's froma drill operation if it's close to the ice edge, will gounder the ice and we have no research andno experience with a spill that goes under ice.

"Problem number three is that we are working in aremote part of the world. In the Gulf of Mexico we areclose to big international airports, we canget big heavy equipment in. There are ships sittingthere, there's big industry there. There are smallships ready to deal with clean up and that sort ofthing. That infrastructure doesn't exist in the Arctic."

Boxall says that the issue is complicated by the need to find newreserves of oil:

"There are lots of unknowns in terms of whathappens. So scientifically, I suppose, our role is tosay, what are the problems? What are the solutions?The problems are oil won't break down quickly, it willbe diffuclt to tackle and we don't have models anddetailed methodology for dealing with oil in that kindof climate. What are the positives? There's lots of oilup there. So it's a balance between are we ready to gooil free yet as a society? And the answer is no.Personally, I'm not a great fan of exploring the Arcticbut I can see that there is an imperative almost that ifwe don't start exploring less suitable places then weare going to run out of oil."

From the environmental audit committee

Parliamentary green watchdog, the environmental auditcommittee, produced a report last year on the impact of climatechange on the Arctic and the safety of oil and gas drilling in theregion.

The committee said:

It [the report] concluded that the lack of proven oilspill response techniques makes exploring for newreserves in the extreme Arctic environmentneedlessly risky. The MPs also pointed out that theworld already has more proven oil and gas reservesthan can be burnt without exceeding a global averagetemperature rise of 2 degrees – widely regarded as adangerous threshold.

The report called for a moratorium on Arctic oil andgas drilling, and challenged the UK government –which supports drilling by UK companies like Shellin the Arctic - to set out how future Arctic oil and gasextraction could be reconciled with its commitmentto limit global temperature increases to below 2C.

Joan Walley, chair of the committee, said:

“Protecting the Arctic should automatically be highon the political agenda. It should not be left topeaceful protesters to insist that risks from oilexploitation in this fragile environment be urgentlyaddressed.

“There should be informed international dialogueand action and I hope our report and follow up to itcan be part of the process for tackling the threatsthat the Greenpeace protesters have so graphicallyexposed.”

“The government has sadly not been very receptiveto our recommendations, but did at leastacknowledge the need for an Arctic strategy cutting

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across the remits of all relevant governmentdepartments. We will be scrutinising that policyframework carefully when it is produced.”

For the record

I approached Shell, BP and Cairn Energy about their pastoperations and future plans in the Arctic. All of them declined tocomment saying they were not currently drilling in the region.

My verdict

Greenpeace's assertion that the drilling industry is unprepared,in fact unable, to clean up a major Arctic oil spill is resoundinglyseconded by scientists. We do not have the technology, northe infrastructure, to deal with the specific challenges ofa disaster in this region.

But Arctic oil extraction is in no way a new thing. Statoil hasbeen operating in ice-free areas of the Arctic circle for 20 years.This means the industry has developedcertain technologies which help it to avert accidents. It alsomeans that there are places in the Arctic that are safer to drillthan others.

Oil exploration in the north is driven by the demands of themarket. But the market is sending mixed messages. On one handare high costs, questions over technology, competition fromother energy resources and geopolitical uncertainty. On the otherhand is the world's insatiable hunger for energy. These combineto make Arctic oil a mercurial economic proposal.Although countries like Russia have more to gain in the regionthan others.

A key point is that controlling the Arctic future and ensuringgood practice will require transparency on the part of drillers. Aquestionable prospect with companies such as Gazprom andRosneft. The adversarial actions of Greenpeace could have twoopposing effects. They may force accountability on oilcompanies, but they may also serve to drive them further into thedark.

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On a slightly different note, many of the comments today havefocussed on the piracy charges against the Greenpeace protestersrather than the question of the audit. This raises a questionabout whether the civil liberties case of the activists has obscuredthe environmental message.

Today's resounding (and scary) scientific consensus is that an oilspill in the Arctic is inevitable if drilling progresses. If this is so,shouldn't we support research into safer practices? Or should wesimply be pulling out of the region altogether.

How we clean up an oil spill is a very different issue to how wesupply the energy demands of the future. But in the Arctic thesetwo questions collide. Climate change, contributed to by fossilfuel emissions, opens up new regions for the extraction of morefossil fuels. It's a catch-22 that can only be solved by a halt todrilling. Greenpeace have obviously become an effective thorn inthe side of big Arctic oil. But realpolitik and the market may welldecide the future of the north, rather than a protest movement.

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