Will the Arctic Oil Rush Be Spoiled By a Spill?

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Robert van der Hilst / CORBIS

Icebergs in the Davis Strait near Ilulissat, Greenland

This summer, when Operation Nanook heads into the midnight sun of the Canadian Arctic, there will be more on the agenda than the annual boots-on-the-ground patrol of the remote reaches of the North American continent. In addition to their yearly sovereignty drills, the Canadian Forces' will also be running exercises with residents in the region's far-flung villages on how to respond to an oil spill. To prepare, the Canadian Coast Guard is shipping oil spill kits to 19 Canadian Arctic communities, including oil booms and oil skimmers. "Well, having the kit is one thing," Duncan Walker, an official in the tiny town of Resolute who requested the training, told CBC News in May. "I think they're hoping we have an adequate supply of boats or what have you."

What's Walker worried about? As some nations are putting new Arctic drilling on ice, offshore drilling resumed last week in the berg-strewn Davis Strait between Canada and Greenland. Edinburgh-based Cairn Energy PLC has parked two oil rigs roughly 100 miles off Greenland's west coast, and plans to spend some $400 million this summer drilling four exploratory wells to try and tap into the nation's fabled oil reserves. The U.S. Geological Survey (USGS) estimates there could be as much as the equivalent of 17 billion barrels of oil (in oil or gas) off west Greenland in addition to another 30-some billion off the island's northeast coast, potentially making the area one of the world's largest untapped oil fields.

The timing of the project is, to put it gently, bad. The Deepwater Horizon spill has brought the economic, social and environmental risks of offshore drilling directly under the glare of international spotlight. And while Cairn is not the first company to try its luck off Greenland — previous exploratory wells have come up dry — it's certainly getting the most attention. Cairn has six operating licenses in Greenland; it secured the license from Greenland to the block being drilled now in 2007. It's been working with Greenland for years, but for a relatively small company, valued at $9 billion, to start drilling in a pristine and unpredictable environment while a giant like BP fails to stem the flow of crude in better-known waters has raised some red flags. "[The world doesn't] have the capacity to respond to large spills, even in the best conditions," says Patrick Lewis, a program officer with World Wildlife Fund's Arctic Program. "In the Arctic, the complications are manifold."

The same thing making resource exploitation ever-more feasible in the far north is also what makes it risky: ice. Part of a shipping route area nicknamed "Iceberg Alley," the Davis Strait is covered in sea ice some of the year, but for a four-to-five month window from May to September, the water is mostly ice free, and icebergs are tracked and managed. The Arctic's ice-free season is expected to grow longer as global temperatures continue to rise, but in the meantime, Cairn and other companies with licenses off Greenland, including Exxon and Chevron, have a relatively short timeframe to drill — and to fix any problems that arise. Lewis and others are worried that if there were a blowout toward the end of summer, and not enough time to drill a relief well before the sea froze over for the next eight months, results would be disastrous both for residents and fragile ecosystems already coping to survive in a warmer world.

Ice isn't the lone unknown. Greenland has some extreme weather; the highest sea-level wind speeds were recorded near the U.S. air base in Thule, Greenland, clocking in at 207 miles per hour. Thule is a lot further north than where Cairn is drilling this summer, but potential difficulties in getting an emergency crew to a site quickly in unseasonably bad weather could happen anywhere along the coast. Oil also breaks down differently in extremely cold water, and dispersants, too, behave differently. It's a long list of variables that organizations like the U.S. Minerals Management Service and the National Oceanographic and Atmospheric Administration (NOAA) and their international equivalents have been working on for years. The U.S. responded to the Gulf disaster by suspending new offshore activity in Alaska, and Norway also enacted a moratorium on new offshore deepwater drilling.

Greenland and Cairn, not surprisingly, say there is little cause for alarm. Greenland's Bureau of Mineral and Petroleum (BMP), which manages the blocks, has used Norwegian offshore drilling regulations, widely considered to be some of the world's most stringent. Senior BMP geologist Henrik Stendal says rigs operating in Greenland waters are required to have more levels of security to mitigate a blowout than Deepwater Horizon had, including requiring companies to work with two rigs present at all time in case a relief well needs to be drilled. BMP conducts weekly inspections at Cairn's rigs, and will be joined later this summer by an inspector from Canada's energy agency to help oversee the safety checks. Cairn, too, says they have done "as much as we possibly can" to ensure they are running a safe operation for their some 300 employees and the surrounding environment. "We have really kicked the tires and checked the undercarriage," says David Nisbet, Cairn's Head of Group Corporate Affairs. "We are very conscious of the responsibility we've got in an area like that."

Another thing that the Greenland drilling has going for it on the safety side is that the wells are in relatively shallow water. The first two Cairn wells (the second two are awaiting approval) are being drilled at depths of 300 and 500 meters, compared to the Gulf's blowout, which took place at about 1,500 meters. "In deepwater drilling, you have high pressure in the water column that is really hard to work under" in the event of an emergency, says Stendal. Shallow water is much easier, he says, but it's an industry distinction that "people do not understand."

Cairn's success this summer could literally change the course of the island's history. Though granted semi-autonomy in 1979, Greenland remains a territory of Denmark, reliant on Danish subsidies amounting to roughly $600 million a year, or a third of the island's income. If Cairn strikes black gold in the Sigguk block this summer, the 20 blocks surrounding it will almost certainly see a lot of action, and soon. Tax revenues from oil could help Greenlanders wean themselves off the crown and bring much needed jobs — and a much-needed sense of self-sufficiency — to a tight-knit population disproportionately fraught with alcoholism and high suicide rates. Cairn, for example, has already committed to using local companies when possible in its support crews this summer, and pledged up to $3 million to environmental research in Greenland along with its operating licenses.

Not all Greenlanders, however, are so sure an oil boom would be a blessing in their remote homeland. Like residents in Resolute, Canada, some are anxious about how Greenland's remote villages would handle a spill on their shores. And though 75% of Greenlanders voted in 2008 that they wanted independence from Denmark, it's not unanimous that oil is the best way to get there. "Every night I pray they don't find oil and gas in the Greenland area because that will end the peace and calm heaven here," Aqqaluk Lynge, president of Greenland's Inuit Circumpolar Conference, told TIME even before the referendum on independence. "Too much interest in resource development will not help us gain more autonomy."

Blessing or curse, ready or not, the time to stanch interest in Greenland oil seems to have passed. Another round of licenses for blocks off the west coast will be announced in August, and blocks off the northeast coast, which could hold even more oil and gas, are being carved out by the BMP now. Nisbet says Cairn is not put off by the fact that past attempts have come up dry. "We believe somebody will find oil off Greenland," says Nisbet. "Whether it's us, we'll see."