Our Viewpoint: ‘Shell no,’ the end of the drilling in the Arctic, for financial loss

Category:  Opinions
Friday, October 23rd, 2015 at 2:00 PM

The day of Sept. 28 will likely be one that environmentalists around the world will remember fondly.

Last week, Royal Dutch Shell, know colloquially as Shell, agreed to relinquish its search for oil off of the Alaskan shoreline, dashing the company’s ideal of becoming the first company to own an oil monopoly in Arctic waters.

The process of searching for oil wells buried deep in the arctic oceans basins has been, as stated in a press release from the company, “halted for the foreseeable future.” The decision came after finding little to no oil deposits in proposed drilling sites. The lack of findings is made even bitterer due to the daunting regulations that the company needed clearances for, as well as the abysmal fee, $7 billion, to begin prospection off the shoreline.

Shell was continually confronted by activists and environmentalists throughout the process. In one instance, kayakers successfully blocked a Shell ship from passing to a proposed drilling location. Their reasoning was the wildlife could potentially be devastated should an oil spill occur. Local fauna like polar bears, walruses, seals and birds could potentially have their entire ecosystems shattered from such a tragedy. Alaskan oil has only recently come into contention.

Prior to Shell’s proposal, oil was not thought to have been available in the Arctic regions. As it turns out, most scientists agree the Arctic likely holds a quarter of the world’s oil reserves. This, of course, excited local Alaskans, who were interested in the wealth that exploitation of the sea could bring them in much the same way Pennsylvanians are interested in leasing their land to fracking companies. U.S. oil industry executives also had high hopes for the Shell expedition. The Alaskan deposits were supposed to keep the U.S. in competition by vaulting our nation among the ranks of Russia and Saudi Arabia. It was predicted by leading geologists there would be enough oil within the depths of the seafloor to meet the American electricity demand for 50 years.

The hype surrounding the mission quickly died when the findings were noted as meager at best. At 6,800 feet into the ground and roughly 80 miles offshore in what is known as the Cukchi Sea in northwestern Alaska, nothing of acclaim surfaced. In the industry, it’s common for wells that do not yield tremendous profits to be called “dry holes.” This is often the case when little to no exploratory probing has been done in prior years or decades.

Thus, the American effort spearheaded by the Energy Department Advisory Council to find reservoirs that could be tapped and harnessed, was absolved. In the conclusion of this long protested endeavor, we don’t know how to feel other than torn. Sure, harvesting energy is important and vital to the longevity of our nation by lessening our dependence on foreign oil.

However, can we afford to jeopardize the habitats of the Arctic, where many a species are already endangered due to dramatic climate change? Are we ready to deal with the consequences of off-shore drilling opening the flood gates for other companies to come to the ocean and compete with some of the most irreplaceable resources in the world? Analysts predict that by the year 2030, the world will need to collectively manufacture an extra 10 million barrels per day simply to meet the growing demands of population needs and industrializing countries. In a world where we already consume 93 million barrels of oil daily, is this really the direction we want the people of our nation to subscribe to, especially when alternatives exist?

The U.S. Geological Survey estimates the Arctic waters of the Cukchi Sea alone have the potential to produce 26 billion barrels. That’s an extraordinary amount, and when we hear our politicians boasting on talk shows and televised conferences about the wonderful opportunity we’ve inherited, they’re right.

However, there’s another side to the argument we need to consider, even if it’s not mentioned in a forthright manner. The other side of the debate is we truly can’t keep producing and consuming oil at the rate we currently are. In an era where we drastically need to reduce our carbon footprint from fossil fuel usage, it is poor decision making on behalf of the companies we have long supported every time we stop at a station to fill our cars.

The gas crisis is analogous with our fracking crisis in Pennsylvania. Companies with fast-talking, feel-good executives send their best persuasive speakers to small, rural town halls where townships are economically depressed and vying for any type of economic release. When fracking corporations come to town with their effective propaganda and educate the general public on the short term benefits to such an endeavor, the dire situations most families on the low end of the socioeconomic strata face seem to vanish into thin air as their pockets are lined by reckless companies. The free gas and monthly check seem miraculous initially, but as the months wear on, these people find that their pets are losing their hair, their infant is born with birth defects, and they can light their tap water on fire.

If you can feel rage for one industry, but not the other, then you have a misunderstanding for how the corporate world functions. Hint: It’s not always from inventive practices and hard work. The biggest mistake we can make as spectators of Shell’s decision to abandon their project in the north is to assume it’s because of ethics. The environmentalist movement to tarnish Shell’s and other oil tycoon industries played a small, but rather insignificant role in influencing the corporation to retreat (The best thing the activists did regarding this issue was raise awareness that Shell was up north to begin with).

No, the reason Shell has evacuated in purely monetary. Large, multi-billion dollar companies like Shell don’t respond to please and thank you, petitions, treaties, or even laws. These companies listen to money, and they’ll base their business models around its acquisition. Observers of the Shell decision should realize the derogatory role that money plays in influencing corporate ideology. Shell’s arctic dreams were shattered by reality, oil prices more than halved in the past year, (due largely in part to shale infiltrating the market) making expensive arctic drilling a tough sell to shareholders. Besides, operations in frigid waters are more expensive than those elsewhere, and require a much bigger upfront investment with a much smaller window of opportunity to extract any oil.

To confuse these statistics with the company’s admission of an ethical lapse or the efforts of non-profit groups like World Wildlife Fund and Greenpeace, is to delude yourself into thinking that these industries have less power and influence than they actually do. Even though the ill-informed Alaskan senator Lisa Murkowski still feels obliged to point her finger at President Obama for the lack of an economic boon on behalf of Shell, the truth is still right before our very eyes.

In retrospect, it’s too bad Shell didn’t spend the $7 billion for arctic drilling on diversifying their brand by experimenting with renewable energy options such as wind, solar, or tidal power. The fossil fuel companies remind us of the last whaling ships, desperately clinging to producing energy sources whose heyday is rightfully over.

Our Viewpoint is voted on by the staff of The Spectator. It is written by the acting Voices editor.

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