Arctic exploration and production is not for the timid.
Nor for those without deep pockets.
Look at Royal Dutch Shell Plc, for example.
Long recognized for its considerable E&P expertise, this super major has labored for eight years to find and produce oil in the Beaufort and Chukchi seas.
Despite spending more than $5 billion and counting, the fates have not been kind.
A drillship mishap in 2012 followed by damage to the company's unique spill containment barge during certification testing, along with other setbacks, led to a halt in drilling, with the exception of some top hole activity.
Early on, the company had become a favored target of lawsuits instigated by environmental groups seeking to block any and all Arctic exploration.
With its lease holdings still intact, Shell continues to press forward with plans to drill again, possibly this year.
The Big Story, however, tends to overshadow the considerable bustle already under way in the region.
Jocelyn Fenton, health and safety executive and regulatory coordinator at Statoil in Alaska, has considerable insight on the industry's Arctic activity overall. This comes from her hands-on experience working in the Alaska oil and exploration arena for 10 years, focusing on regulatory and permitting issues and sciences.
"There is a lot of activity in the Arctic that is quite comprehensive, and I want to combat the lack of awareness of this," she said. "There are numerous completed, ongoing and planned projects characterizing this complex region, but getting the word out seems to be a struggle.
"Also, I want to emphasize that all this work should be coordinated with other groups in the area," she said.
"The Arctic is a complex region with differing policies and protocols, so collaboration and communication are imperative for success," she added, "even when we're talking about competing companies."
The Arctic Council
There's good news already in that the oil and gas industry currently collaborates with numerous diverse public and private partnerships to plan, explore, develop and sustain multiple regions within the Arctic.
Still, little is known outside of the energy or research milieu about the extensive research and data collection efforts in the region. Much of this is available for public review and use, according to Fenton.
She summarized the aspects of Arctic hydrocarbon exploration that present the greatest opportunities for cooperation:
- Baseline studies.
- Engineering.
- Oil spill prevention, detection and response.
- Data collection and modeling.
- Monitoring.
The Arctic Council is the leading international forum involving all of the Arctic nations.
"Through its formal working groups and task forces, the Arctic Council encourages collaborative research among governmental and non-governmental organizations laboring to explore and develop resources in this challenging environment," Fenton said.
She also emphasized that the Arctic Council is maturing into a science-based forum where multiple entities can share their findings and work toward sustainable development for the benefit of the Arctic states and other global communities as well.
Chairmanship of the group will be handed over from Canada to the United States in May ([PFItemLinkShortcode|id:15858|type:standard|anchorText:see Policy Watch|cssClass:asshref|title:see Policy Watch|PFItemLinkShortcode]).
Social License
Besides the operational and logistical headwinds posed by the locale itself, sociological challenges also must be considered.
Six organizations that represent Arctic indigenous peoples have been designated as permanent participants on the council.
The Arctic Oil Spill Response Technology-Joint Industry Program (JIP) has proven to be one of the region's successful collaborative endeavors to date. The JIP comprises 10 oil and gas companies, and the program's goal is to advance oil spill response logistic strategies and equipment sharing, and also to increase knowledge of the potential impacts that oil could have on the region's marine environment.
The Chukchi Sea Environmental Science Program (CSESP) was founded by Shell and Conoco-Phillips in 2008, incorporating Statoil as a partner from 2010 until 2014. CSESP was formed to characterize pre-exploration baseline information on the ecology of the region.
Fenton's take on collaboration in general is straightforward.
"A lot of great things have been achieved," she said, "when public-private partnerships work together to meet numerous interests."