Economy

Why Big Oil’s Thirst For Arctic Exploration Is Bound To Return

By announcing the end of its exploration campaign in the north of Alaska, Shell delighted environmental NGOs. But the self-imposed moratorium, to the degree it even exists, will not last.

Why Big Oil’s Thirst For Arctic Exploration Is Bound To Return
Anne Feitz

PARIS â€" The polar bear lovers have claimed victory. On Sept. 28, Shell announced it was suspending its exploration campaign in the Chukchi Sea, in the north of Alaska, after disappointing results. Many saw in this retreat the signal they'd been waiting and hoping for: oil companies have finally given up on the Arctic’s black gold. Greenpeace and other environmental NGOs exulted on social networks.

Their reaction is understandable. But is it also premature? "There is still a lot of oil activity in the Arctic, for instance on land in Alaska and in Russia, or offshore in Norway," says Mikå Mered, the president of the regional consultancy firm Polarisk.

ENI and Statoil are about to launch their Goliat project â€" slated to become the world’s northernmost production site â€" in the Barents Sea off the coast of Norway. This past summer, the Norwegian government launched a bidding process for petroleum activity licenses in a separate area of the Barents Sea. And in the Pechora Sea, off the coast of Russia, Gazprom is already extracting oil. Production there, in the Prirazlomnoye oil field, began last year.

If Shell’s failure brought Arctic oil exploration to a halt, it’s only in the most fragile areas â€" in the polar Chukchi and Beaufort Seas, off the coasts of Alaska, Canada or Greenland, which are frozen most of the year (unlike the Barents Sea).

"Many companies, such as ConocoPhillips, Statoil, ExxonMobil or Chevron, let Shell go first by taking on a "wait and see" attitude," says Jon Marsh Duesund, an Arctic specialist at the Oslo-based advisor Rystad Energy. "I don’t see them returning there before at least five years." Chevron, ExxonMobil and BP reportedly already announced this year that they were suspending their operations in the region.

Costly ventures

Exploratory drilling in this extreme environment involves huge logistical costs and challenges. The window of time during which the waters are not frozen is reduced to three or four months in the summer. The weather conditions (the cold air, storms, icebergs) make operations technically complex and hazardous. And the constraints imposed to limit the consequences of a possible leak in this extremely fragile ecosystem are huge.

Shell knows a thing or two about this. During a previous attempt, in 2012, the company faced a series of setbacks. One of Shell's anti-oil slick systems failed a test, which prevented it from drilling down to the layers of oil. Then one of its vessels became stranded on the way back. For its 2015 campaign, the company took precautions: it brought two oil rigs on site, as well as some 30 ships, seven planes and a host of other equipment and machinery.

Needless to say, the efforts weren't cheap: in the past 10 years, the group burned through a whopping $7 billion on its Chukchi Sea adventure. Shell has also had to face virulent environmental protection campaigns from top global NGOs. Greenpeace, in particular, organized various high-profile protests â€" including rallies with hundreds of kayaks â€" to protest and raise awareness among U.S. regulators.

A polar bear on a frozen stretch of the Arctic Ocean. Photo: NOAA National Ocean Service

And yet, neither the exhorbitant exploration costs nor the legal or political risks were what really turned Shell and others off the idea of Arctic drilling. Those are things the companies are willing to live with given the potential windfall represented by the area's estimated oil and gas reserves of 90 billion barrells and 47 billion cubic meters respectively, according to a 2008 assessment report by the U.S. Geological Survey. The energy giants are in vital need of renewing their reserves, and the Arctic is one of the rare "new frontiers" where they hope to make major discoveries.

Sinking prices

What did impact their push into the Arctic are falling oil prices, which are down by 50% since June 2014. On paper, that's not something companies would normally worry too much about with regards to long-term investment projects.

"We don’t make investment decisions based on the price of oil in the short term," Tim Domson, head of the Statoil exploration, explained last January in an interivew with Les Echos. "In the Arctic, the time between the first drillings and production is more than 10 years. By then the price of crude oil will have gone back up."

Still, the low prices are a problem in terms of short-term cash flow, forcing companies, as a result, to squeeze investments.

Another determing factor are the sactions Russia imposed on Western companies, meaures that aim directly at the technologies needed for offshore exploration of the Arctic. ExxonMobil and Rosneft announced in September 2014 a potentially huge discovery in the Kara Sea, but had to close up the oil wells and interrupt their programs to respect the sanctions. The Russian companies Rosneft and Gazprom have neither the means nor the necessary technologies to pursue the venture on their own.

For now, the project is being shelved â€" at least until 2020 or 2021, Russia's energy minister announced in September. Overall interest in Arctic oil, however, isn't likely to disappear. Companies may have frozen their projects, but they haven't buried them for good.

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Society

What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel

-Essay-

BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.


Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

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