Trump Greenlights Drilling in the Arctic National Wildlife Refuge, but Will Oil Companies Show Up?
By Scott L. Montgomery
The Trump administration has announced that it is opening up the Arctic National Wildlife Refuge to oil and gas development – the latest twist in a decades-long battle over the fate of this remote area. Its timing is truly terrible.
Low oil prices, a pandemic-driven recession and looming elections add up to highly unfavorable conditions for launching expensive drilling operations. In the longer term, the climate crisis and an ongoing shift to a lower-carbon economy raise big questions about future oil demand.
I've researched the U.S. energy industry for more than 20 years. As I see it, conservative Republicans have backed oil and gas production in ANWR since the 1980s for two overriding reasons. First, to increase domestic oil production and reduce dependence on "foreign oil," a euphemism for imports from OPEC countries. This argument now is largely dead, thanks to the fracking revolution, which has greatly expanded U.S. oil and gas production.
The other motive for drilling in ANWR, I believe, is to score a major, precedent-setting victory over government policies that prioritize conservation over energy production and environmental advocacy groups that have fought for years to protect ANWR as "one of the finest examples of wilderness left on Earth." Capturing ANWR and transforming it into a locus of fossil fuel extraction would be a massive physical and symbolic triumph for politicians who believe that resource extraction is the highest use of public lands.
President Trump seems to understand this, based on his recent comment that "ANWR is a big deal that Ronald Reagan couldn't get done and nobody could get done." But global, national and oil industry circumstances are overwhelmingly arrayed against Trump getting it done.
Years of Debate
ANWR is inarguably an ecological treasure. With 45 species of mammals and over 200 species of birds from six continents, the refuge is more biodiverse than almost any area in the Arctic.
This is especially true of the 1002 coastal plain portion, which has the largest number of polar bear dens in Alaska. It also supports muskoxen, Arctic wolves, foxes, hares, migrating waterfowl and Porcupine caribou, which calve there. Most of ANWR is designated as wilderness, which puts it off-limits for development. But this does not include the 1002 Area, which was recognized as a promising area for energy development when the refuge was created in 1980 and left that way after a 1987 study confirmed its potential.
Climate change is causing especially rapid warming in the Arctic, with probable negative effects for many of these species. Environmental advocates argue that fossil fuel production in ANWR will add to this process, damaging habitat and impacting the Indigenous people who rely on the wildlife for subsistence. But the situation is complex: There are also Indigenous groups who support ANWR development for the jobs and income it would bring.
Energy companies' interest in ANWR, meanwhile, has risen and fallen over time. The discovery of oil at Prudhoe Bay in 1968, followed by two oil shocks in the 1970s, sparked support for exploration and production in the region. But this enthusiasm faded in the late 1980s and '90s in the face of fierce political and legal opposition and years of low oil prices.
A majority of Americas of all political leanings believe the U.S. should develop alternative energy sources rather than expanding production of oil, coal and natural gas. Pew Research Center, CC BY-ND
Scientists performed two major assessments of oil reserves in the 1002 Area in 1987 and 1998. The latter study concluded that ANWR contained up to 11 billion barrels of oil that could be profitably recovered if prices were consistently high. But when prices rose between 2010 and late 2014, companies chose to focus instead on areas to the west of the refuge, where new discoveries had been made.
In the Tax Cuts and Jobs Act of 2017, a Republican-controlled Congress directed the Trump administration to open the 1002 Area to leasing. The bill required one lease sale within four years, and at least two sales within a decade. But as the Interior Department tried to comply, it was hampered by political controversies and environmental assessment requirements.
The new Record of Decision, released on Aug. 17, 2020, determines where and how leasing will occur. It represents the Trump administration's last chance to bring forward a well-designed leasing plan, and is certain to spark legal challenges from environmental and wildlife organizations.
Is ANWR Oil Worth It?
Today the oil industry is facing its greatest set of challenges in modern history. They include:
- A collapse in oil demand and prices due to the global pandemic, with a sluggish and uncertain recovery
- Companies canceling and reducing activity worldwide, with bankruptcies in the U.S. shale industry and drilling rig counts falling back to 1940 levels
- New uncertainty about future global oil demand as climate concerns push public interest and government policy toward electric vehicles, and automakers respond with new EV designs
- The growing possibility of Democratic victories in the November 2020 elections, which would likely lead to policies reducing fossil fuel use
- Increasing investor pressure on banks and investment firms to reduce or eliminate support for fossil fuel projects.
All of these factors compound the challenges of leasing and drilling in ANWR. Well costs there would be among the highest anywhere onshore in the U.S. Only one well has ever been drilled in the area, so new drilling would be purely exploratory and have a lower chance of success than in better-studied areas. Under these conditions, it would make more sense for companies that are active on Alaska's North Slope to pursue sites they currently have under lease, which pose much lower risk.
Alaska's North Slope outside of ANWR remains rich in oil, according to the latest U.S. Geological Survey assessment. USGS
What's more, as I have argued previously, it's not clear that there's a need to drill in ANWR. Energy companies have made new discoveries elsewhere south and west of Prudhoe Bay – most recently, the Talitha Field, which could yield 500 million barrels or more.
Companies that pursue leases in ANWR also will have to weigh the prospects of litigation, investor anger and a tarnished brand – especially large firms with public name recognition. Shell's experience in 2015, when it abandoned plans to drill offshore in the Arctic under heavy pressure, indicate what other companies can expect.
If Trump is voted out of office, I expect that a Biden administration would quickly move to reverse the directive for leasing in ANWR. In my view, this contested area will have far more meaning and value as a wildlife refuge in a warming world that is starting to seriously move away from hydrocarbon energy.
Scott L. Montgomery is a Lecturer, Jackson School of International Studies, University of Washington.
Disclosure statement: Scott L. Montgomery does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Reposted with permission from The Conversation.
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Wisdom the mōlī, or Laysan albatross, is the oldest wild bird known to science at the age of at least 70. She is also, as of February 1, a new mother.
<div id="dadb2" class="rm-shortcode" data-rm-shortcode-id="aa2ad8cb566c9b4b6d2df2693669f6f9"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1357796504740761602" data-partner="rebelmouse"><div style="margin:1em 0">🚨Cute baby alert! Wisdom's chick has hatched!!! 🐣😍 Wisdom, a mōlī (Laysan albatross) and world’s oldest known, ban… https://t.co/Nco050ztBA</div> — USFWS Pacific Region (@USFWS Pacific Region)<a href="https://twitter.com/USFWSPacific/statuses/1357796504740761602">1612558888.0</a></blockquote></div>
By Hui Hu
Winter is supposed to be the best season for wind power – the winds are stronger, and since air density increases as the temperature drops, more force is pushing on the blades. But winter also comes with a problem: freezing weather.
Comparing rime ice and glaze ice shows how each changes the texture of the blade. Gao, Liu and Hu, 2021, CC BY-ND
Ice buildup changes air flow around the turbine blade, which can slow it down. The top photos show ice forming after 10 minutes at different temperatures in the Wind Research Tunnel. The lower measurements show airflow separation as ice accumulates. Icing Research Tunnel of Iowa State University, CC BY-ND
While traditional investment in the ocean technology sector has been tentative, growth in Israeli maritime innovations has been exponential in the last few years, and environmental concern has come to the forefront.
theDOCK aims to innovate the Israeli maritime sector. Pexels<p>The UN hopes that new investments in ocean science and technology will help turn the tide for the oceans. As such, this year kicked off the <a href="https://www.oceandecade.org/" target="_blank" rel="noopener noreferrer">United Nations Decade of Ocean Science for Sustainable Development (2021-2030)</a> to galvanize massive support for the blue economy.</p><p>According to the World Bank, the blue economy is the "sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem," <a href="https://www.sciencedirect.com/science/article/pii/S0160412019338255#b0245" target="_blank" rel="noopener noreferrer">Science Direct</a> reported. It represents this new sector for investments and innovations that work in tandem with the oceans rather than in exploitation of them.</p><p>As recently as Aug. 2020, <a href="https://www.reutersevents.com/sustainability/esg-investors-slow-make-waves-25tn-ocean-economy" target="_blank" rel="noopener noreferrer">Reuters</a> noted that ESG Investors, those looking to invest in opportunities that have a positive impact in environmental, social and governance (ESG) issues, have been interested in "blue finance" but slow to invest.</p><p>"It is a hugely under-invested economic opportunity that is crucial to the way we have to address living on one planet," Simon Dent, director of blue investments at Mirova Natural Capital, told Reuters.</p><p>Even with slow investment, the blue economy is still expected to expand at twice the rate of the mainstream economy by 2030, Reuters reported. It already contributes $2.5tn a year in economic output, the report noted.</p><p>Current, upward <a href="https://www.ecowatch.com/-innovation-blue-economy-2646147405.html" target="_self">shifts in blue economy investments are being driven by innovation</a>, a trend the UN hopes will continue globally for the benefit of all oceans and people.</p><p>In Israel, this push has successfully translated into investment in and innovation of global ports, shipping, logistics and offshore sectors. The "Startup Nation," as Israel is often called, has seen its maritime tech ecosystem grow "significantly" in recent years and expects that growth to "accelerate dramatically," <a href="https://itrade.gov.il/belgium-english/how-israel-is-becoming-a-port-of-call-for-maritime-innovation/" target="_blank" rel="noopener noreferrer">iTrade</a> reported.</p><p>Driving this wave of momentum has been rising Israeli venture capital hub <a href="https://www.thedockinnovation.com/" target="_blank" rel="noopener noreferrer">theDOCK</a>. Founded by Israeli Navy veterans in 2017, theDOCK works with early-stage companies in the maritime space to bring their solutions to market. The hub's pioneering efforts ignited Israel's maritime technology sector, and now, with their new fund, theDOCK is motivating these high-tech solutions to also address ESG criteria.</p><p>"While ESG has always been on theDOCK's agenda, this theme has become even more of a priority," Nir Gartzman, theDOCK's managing partner, told EcoWatch. "80 percent of the startups in our portfolio (for theDOCK's Navigator II fund) will have a primary or secondary contribution to environmental, social and governance (ESG) criteria."</p><p>In a company presentation, theDOCK called contribution to the ESG agenda a "hot discussion topic" for traditional players in the space and their boards, many of whom are looking to adopt new technologies with a positive impact on the planet. The focus is on reducing carbon emissions and protecting the environment, the presentation outlines. As such, theDOCK also explicitly screens candidate investments by ESG criteria as well.</p><p>Within the maritime space, environmental innovations could include measures like increased fuel and energy efficiency, better monitoring of potential pollution sources, improved waste and air emissions management and processing of marine debris/trash into reusable materials, theDOCK's presentation noted.</p>
theDOCK team includes (left to right) Michal Hendel-Sufa, Head of Alliances, Noa Schuman, CMO, Nir Gartzman, Co-Founder & Managing Partner, and Hannan Carmeli, Co-Founder & Managing Partner. Dudu Koren<p>theDOCK's own portfolio includes companies like Orca AI, which uses an intelligent collision avoidance system to reduce the probability of oil or fuel spills, AiDock, which eliminates the use of paper by automating the customs clearance process, and DockTech, which uses depth "crowdsourcing" data to map riverbeds in real-time and optimize cargo loading, thereby reducing trips and fuel usage while also avoiding groundings.</p><p>"Oceans are a big opportunity primarily because they are just that – big!" theDOCK's Chief Marketing Officer Noa Schuman summarized. "As such, the magnitude of their criticality to the global ecosystem, the magnitude of pollution risk and the steps needed to overcome those challenges – are all huge."</p><p>There is hope that this wave of interest and investment in environmentally-positive maritime technologies will accelerate the blue economy and ESG investing even further, in Israel and beyond.</p>
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