Environmentalists Blast Obama's Decision to Let Shell Drill in Arctic

Last Monday, just weeks after he gave Royal Dutch Shell (NYSE:RDS.A) final approval to go ahead with its controversial plan to resume oil and gas drilling in the Arctic, President Obama greenlighted a request by the company to drill even deeper for oil than it ever has before. Granted through the Bureau of Safety and Environmental Enforcement, the approval lets Shell start drilling in the Arctic for the first time in since 2012, when it was forced to halt drilling operations amidst a series of accidents, culminating in the washing ashore of its drilling rig Kulluk on Sitkalidak, a pristine uninhabited island off the Alaskan coast.

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Kulluk aground on the southeast side of Sitkalidak Island on January 1, 2013. (image: U.S. Coast Guard)

President Obama's decision to let Shell resume its Arctic operations stands in stark contrast to his efforts to combat climate change, particularly the recent release of the EPA's Clean Power Plan, which environmentalists hailed as the nation's strongest ever climate action. Even more puzzling is the fact that the Shell approval comes just days before the president is scheduled to make a landmark visit to Anchorage for a State Department-sponsored conference on the Arctic, at which he is expected to talk about the dangers of climate change. It begs the question: When it comes to the environment, where does Obama really stand?

Mixed messages

"It sends a terrible signal to the rest of the world for the United States to be using public resources to promote [Arctic] development," said Niel Lawrence of the Natural Resources Defense Council (NRDC). "We have to make clear to the rest of the world that we are all in on a clean energy future. And we've got to stop giving the rest of the world license to go exploring by permitting Shell to do it."

Could Obama's decision help fuel an international Arctic oil rush? Under international law, four other countries besides the U.S. — Canada, Norway, Russia and Denmark (via Greenland) — have Arctic exploration and resource rights to areas within 200 nautical miles of their coasts. In Norway, the fear of oil spills in the Arctic have made lawmakers push back on the plans to let oil companies press further northward into the Arctic Circle. But Russia is going full bore, with plans to deploy a floating nuclear reactor to power its Arctic drilling operations by October 2016. Canada has a similar plan to power its remote mining projects.

“Shell shouldn’t be drilling in the Arctic, and neither should anybody else,” said Franz Matzner, the director of the Natural Resources Defense Council’s Beyond Oil program, in an email. “President Obama’s misguided decision to let Shell drill has lit the fuse on a disaster for our last pristine ocean and for our climate.”

"This is a disaster," said Kristin Brown, director of digital strategy at the League of Conservation Voters, in an email. "Shell has an awful safety track record — even the Interior Department says there’s a 75 percent risk of a large oil spill if these leases are developed, and in the unpredictable Arctic Ocean, cleanup would be next-to-impossible."

Brown noted Obama's bewildering about-face regarding the climate crisis:

Earlier this month, we had an amazing victory when President Obama finalized the Clean Power Plan, putting in place the first-ever national limits on carbon pollution from power plants. It's the single biggest step our country has ever taken to tackle climate change. President Obama has demonstrated time and again that he cares about our environment — that’s why this decision doesn’t add up. Arctic drilling is completely incompatible with President Obama’s leadership on climate.

Not only does Shell have the final permit it needs to drill off of Alaska's northwest coast — right in the heart of the fragile habitat of the threatened polar bear — but thanks to the recent approval, according to Fuel Fix, the energy giant now has Obama's blessing to "burrow into potential oil-bearing rock thousands of feet below the seafloor that previously was off limits." The modified permit gives Shell until September 28 to conduct exploratory drilling below the bottom of the last stretch of pipe set in the well. The company has spent $2.1 billion on leases in the Arctic's Chukchi Sea, and upwards of $7 billion on exploration in both Chukchi and the nearby Beaufort Sea.

Senator Lisa Murkowski (R-Alaska), who chairs the powerful Senate Energy and Natural Resources Committee, hailed Obama's decision, saying that it helps ensure her state remains "a major energy supplier well into the future." The Arctic waters off of Alaska are estimated to contain 24 billion barrels of oil and 104 trillion cubic feet of natural gas.

Obama to threatened Arctic wildlife: Screw you

Even though Obama's approval was expected and doesn't give Shell an unrestricted license to drill in one of the most ecologically sensitive regions in the world —Interior Department regulators ruled that existing wildlife protections require a 15-mile buffer zone between active drilling rigs — it was a stinging defeat for environmentalists, who have long warned that oil drilling in this region will harm a number of threatened and endangered species, including the mascot of Arctic conservation, the polar bear.

The approval of Shell's Arctic drilling is another recent nail in the coffin for this iconic species: Last month, Obama moved to essentially clear the way for a polar bear extinction when the U.S. Fish and Wildlife Service (USFWS) proposed a polar bear "recovery" plan that allows for a shocking 85 percent drop in the polar bear population. Conservationists were quick to slam the proposal, with the Center for Biological Diversity (CBD) saying in a recent email that it "looks more like an extinction plan," calling it a "perverse twist" following Obama's Arctic drilling approval. "Under the plan all of Alaska's polar bears could disappear," warned the CBD. The group recently launched a public petition urging Mary Colligan, Chief of Marine Mammals Management at the USFWS, to "seriously reconsider" the current recovery plan for polar bears, saying that it is "simply not acceptable" that it "allows a 10 percent probability that polar bears in each of the four ecoregions will go extinct."

"Alaska's Southern Beaufort Sea polar bear population is the first subpopulation of bears to show the severe effects caused by climate change," said Sara Thomas, who oversees the online advocacy program for the World Wildlife Fund (WWF), in an email. "Unfortunately, it probably won't be the last … This very minute, Shell Oil's drilling rigs are on their way to drill for oil in polar bear habitat. With that habitat rapidly shrinking due to climate change, the last thing these bears need is the added risk of a potential oil spill."

"Because of their dependence upon the sea ice for food," according to the U.S. Geological Society, changes in sea ice "can directly affect the carrying capacity of the Arctic for polar bears … longer ice-free seasons have resulted in reduced survival of young and old polar bears and a population decline over the past 20 years. Recent observations of cannibalism and unexpected mortalities of prime age polar bears in Alaska are consistent with a population undergoing change."

In addition to polar bears, other species like Pacific walrus, ice seals and whales are struggling to survive amidst a warming Arctic and rapidly melting sea ice. These dramatic changes, brought upon by anthropogenic climate change, make it much more difficult for animals near the top of the food chain to survive, as smaller animals like plankton and fish disappear from the region. Even seals, which are the polar bear's main source of food, are becoming increasingly scarce.

But for decades, the oil and gas industry has enjoyed exemptions or exclusions from keys parts of at least seven major environmental laws. When it comes to Arctic drilling, the Obama administration seems to have no desire to buck this trend, as evidenced by the National Marine Fisheries Service's recent issuance of an “incidental harassment authorization” to Shell, which gives the company the right to harass thousands of whales and seals in the Arctic.

Emma Hedman, a conservation associate at Alaska Wilderness League, put this remarkable authorization into perspective:

Simply put, granting this permit will expose Arctic marine mammals – including more than 1,000 bowhead whales (an endangered species), more than 1,600 beluga whales and more than 25,000 ringed seals (listed as threatened) – to damaging acoustic activity from actions including exploratory drilling, seismic testing and icebreaking. Seismic testing alone can cause temporary and permanent hearing loss, abandonment of habitat, disruption of mating and feeding, beach strandings and even death. Whales in particular need their hearing to survive, as it is critical for mothers and their calves to call out to each other as they migrate. Sadly, the simple truth might be that a deaf whale is a dead whale.

With his actions regarding polar bears, whales and seals, the president has made it abundantly clear that protecting wildlife — even threatened or endangered species — will not take priority over drilling for dirty fossil fuel and lining the coffers of the world's oil barons.

Dirty fuel, tarnished legacy

"President Obama’s decision to grant Shell the final drilling permits goes against science, the will of the people, and common sense," said Sierra Club executive director Michael Brune. “To preserve his climate legacy, President Obama must change the course on Arctic drilling set eight years ago by former President George W. Bush, and not perpetuate it. The President should cancel the lease sales scheduled for 2016 and 2017 and remove the possibility of drilling in the Arctic Ocean leases from all energy plans going forward."

Democratic presidential hopeful Hillary Clinton is establishing her own climate narrative by distancing herself from her former boss, saying, "Given what we know, it's not worth the risk of drilling [in the Arctic]." She has clearly drawn a line in the ice: On the Arctic drilling issue, she is on the side of the environmentalists.

Clinton isn't the only member of Obama's party to question his decision. Following Shell's approval, a dozen Senate Democrats led by Maryland's Ben Cardin sent a letter to Mary Jo White, chair of the Securities and Exchange Commission (SEC), urging her to review offshore drilling disclosure requirements to ensure "companies fully and fairly disclose the risks from proposed offshore oil and gas activities." The senators said that Shell "did not disclose risks inherent to its Arctic Ocean exploration program," despite the significant known risks of offshore drilling. While their SEC-slanted angle may ultimately be more financial than environmental — they noted that "full and timely disclosure of material risk is necessary to protect investors by enabling them to make informed investment decisions" — activists should surely concur with their request for full disclosure from Shell.

Black comedy of errors

For its part, Shell has stressed their focus on safety. “We remain committed to operating in a safe, environmentally responsible manner and look forward to evaluating what could potentially become a national energy resource base,” said Shell spokesman Curtis Smith, who noted that the company may complete an Arctic well this summer.

But it is difficult to believe Smith's statement, considering Shell's recent mishaps. "They've had drill ships run aground, an oil containment dam crushed like a beer can, a towline snapped … It's been like Keystone Cops for Shell up there," said Greenpeace director John Sauven about the company's sketchy history in the Arctic. "Nothing of what they have done ... would give you any kind of guarantee that they could drill safely for oil in the Arctic."

Art of battling giants

“We cannot move from the land when that spill hits the Arctic," said Mae Hank, an Inupiat from Point Hope, Alaska. "The Chukchi is ancestral waters and we want it to stay so.” A native Alaskan people, the Inupiat migrated to Alaska around 1000 BC and span a traditional territory from Norton Sound on the Bering Sea to the Canadian border. Hank is one of many native Alaskans who have joined environmentalists in the battle against Arctic drilling.

"The people we represent don't want any development in the Arctic Ocean of any kind, no matter what," said Faith Gemmill, executive director of the nonprofit group Resisting Environmental Destruction on Indigenous Lands (REDOIL) and member of the Gwich'in tribe who lives in Anchorage. But some native Alaskans support Shell's drilling operations because they will provide jobs and tax revenue.

Still, there is a growing coalition of indigenous people and environmentalists who view Arctic drilling as a major threat to the environment and a traditional way of life. And the activists show no signs of letting up the pressure anytime soon. The #ShellNo movement recently grabbed headlines with dramatic images of activists blocking Shell's oil rig in Seattle with a flotilla of kayaks and blocking an icebreaking ship by dangling from a bridge in Portland.

"Granting Shell the permit to drill in the Arctic was the wrong decision, and this fight is far from over," said Brune. "The people will continue to call on President Obama to protect the Arctic and our environment."

Going too far

Notably, the #ShellNo activists may even claim top members of the oil industry among their ranks. It was during Shell's nightmarish 2012 Arctic adventure that Total SA chief executive Christophe de Margerie became the first oil boss to publicly criticize Arctic oil drilling, saying that energy companies should keep out of the Arctic because the risks were simply too high.

Amory Lovins, the co-founder and chief scientist of the Rocky Mountain Institute who has worked in energy policy for 40 years and counts among his clients a number of Big Oil firms, including Shell, BP, Chevron and ConocoPhillips, last month offered fresh criticism, saying Arctic oil exploration is too costly. Oil companies, he argues, with "decadal lead times and high technological, geological, and political risks…can’t charge a high enough price to pay for Arctic oil."

"You’ve got to be careful what you do," former BP boss Lord Browne warned Shell earlier this month. Lord Brown, currently chairman of new Russian-backed oil firm L1, also pointed out a different kind of price one may have to pay on an ill-advised Arctic treasure hunt: "Cost includes your long-term reputation."

Citing a "personal journey" that involved asking the question, "Can I do this in a responsible way?" Shell CEO Ben van Beurden recently affirmed, "We believe that we can responsibly explore for hydrocarbons in Alaska."

It difficult to share his confidence in light of the fact that — after being pressed by "What if?" questions at a shareholder meeting in May — he ultimately admitted that he is not familiar with his own company's oil spill response plan for the Arctic. It is a shocking admission, especially considering not only the Interior Department's assertion of a 75-percent Arctic oil spill risk, but also Shell's own well-documented history of accidents in the region. As Portland's KOIN-TV reported ealier this week, "Companies haven’t shown that they can clean up a spill if one happened in that ice-choked water."

But van Beurden really only needs to convince one other person besides himself. And while the president's decision is a serious blow to the movement to exclude the Arctic from the dangers of energy development, there is a chance that the narrative may change. His administration is currently in the process of finalizing the next five-year plan for Arctic lease sales. During this period, Obama has the power to exclude all drilling in the Arctic Ocean. In the meantime, Shell is heading northward. And the polar bears are powerless to stop them.

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