Ice, Ice Baby: Obama Gives Shell the Thumbs Up for Arctic Drilling

The Obama administration gave Royal Dutch Shell conditional approval Monday to begin drilling for oil and gas in the Arctic, a major triumph for a company that has seen the waters of the remote region as a tantalizing business opportunity for years.

The company will still need to receive approval from other regulatory agencies, but has plans to begin drilling in the Chukchi Sea this summer. According to the Wall Street Journal, the company plans to invest $1 billion in the Arctic project this year.

The decision is a major setback for environmentalists, who argue that drilling in the Arctic could pave the way for a major environmental disaster. Oil giants, including Shell and BP, have had major spills in recent years, including Shell of Nigeria spills in 2008 and 2009 that cost the company $84 million. In 1989, the Exxon Valdez spilled millions of gallons of crude oil on the Prince William Sound in Alaska.

The United States’s interest in the Arctic is not exclusive to drilling. The melting of the polar ice cap and opening of Arctic waterways means an increase in tourism, fishing, and mineral exploration. And for the U.S. Navy and Coast Guard, it means new waterways to patrol.

In 2013, the Defense Department released an Arctic Strategy report claiming that it was the Pentagon’s responsibility to ensure that the Arctic remains peaceful as human access to the region increases in coming years. Their security focus in the region, the report said, would range from resource extraction to national defense.

Last year, the Pentagon complemented that report with a climate change readiness roadmap to outline ways the Defense Department would work proactively to prepare for the national security implications climate change could have. That would include military responses to would need to respond to natural disasters sparked by climate change.

In the case of this Shell project, environmentalists are especially concerned because its remote location would make it difficult to mount a clean-up effort in the event of a spill. The closest Coast Guard station equipped to respond is more than 1,000 miles away.

A Shell spokesman, Curtis Smith, said in a statement that the approval of Shell’s project was “an important milestone and signals the confidence regulators have in our plan.”

But before operations can begin this summer, he said “it’s imperative that the remainder of our permits be practical, and delivered in a timely manner. In the meantime, we will continue to test and prepare our contractors, assets and contingency plans against the high bar stakeholders and regulators expect of an Arctic operator.”

Obama’s relationship with environmentalists has had its highs and lows.  As president, he has made strides on climate change but also advanced opportunities for offshore drilling — which activists vehemently oppose — as the United States continues to look for more domestic oil opportunities.

Just four months ago, his administration approved a measure to begin another offshore drilling project on the East Coast. But in February, when Congress passed legislation for Keystone XL pipeline, an $8 billion project to transport tar sands from Canada to refineries on the U.S. Gulf, Obama vetoed the measure. Lawmakers need his permission because the pipeline would cross the Canadian border, but he refuses to give it his approval until the State Department finishes reviewing the project.

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