Commentary Magazine


Topic: Shell

Oil Exploration Calls for Expanded Security

The New York Times has a lengthy report on Shell’s plans this summer to drill exploratory oil wells in the Arctic Ocean off the north coast of Alaska. Much of the article focuses on the politicking and lobbying behind President Obama’s decision to let the drilling go forward which holds the possibility of tapping a million barrels a day of crude, or close to Qatar’s entire production. One of the many oddities which goes unexplained is why drilling in the Arctic Ocean–an inherently risky undertaking given the existence of icebergs, storms, monster waves, and other dangers–is permitted while drilling in the Arctic National Wildlife Refuge a few miles away–which not only has more oil (upwards of six billion barrels in all) but also could be drilled in greater safety–is not. But let’s leave that aside. What I want to address here is another neglected dimension of this important issue–the security dimension.

I saw this for myself last week when I traveled to Alaska, along with a group from the Council on Foreign Relations, to meet with Coast Guard officials and to do an Arctic overflight that took me from Anchorage to Barrow–America’s northernmost city which remains, even now, frigid and snowy. The expansion of oil exploration calls for expanded security–to protect against terrorists and extreme environmentalists who might try to sabotage these operations (Greenpeace is said to be chartering a vessel to try to block Shell) and to guard against other Arctic nations such as Russia that might try to grab for themselves oil fields that rightfully belong to the U.S., Canada or other nations. There is also a need for expanded safety operations to ensure an adequate response in case of accidents or oil spills.

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The New York Times has a lengthy report on Shell’s plans this summer to drill exploratory oil wells in the Arctic Ocean off the north coast of Alaska. Much of the article focuses on the politicking and lobbying behind President Obama’s decision to let the drilling go forward which holds the possibility of tapping a million barrels a day of crude, or close to Qatar’s entire production. One of the many oddities which goes unexplained is why drilling in the Arctic Ocean–an inherently risky undertaking given the existence of icebergs, storms, monster waves, and other dangers–is permitted while drilling in the Arctic National Wildlife Refuge a few miles away–which not only has more oil (upwards of six billion barrels in all) but also could be drilled in greater safety–is not. But let’s leave that aside. What I want to address here is another neglected dimension of this important issue–the security dimension.

I saw this for myself last week when I traveled to Alaska, along with a group from the Council on Foreign Relations, to meet with Coast Guard officials and to do an Arctic overflight that took me from Anchorage to Barrow–America’s northernmost city which remains, even now, frigid and snowy. The expansion of oil exploration calls for expanded security–to protect against terrorists and extreme environmentalists who might try to sabotage these operations (Greenpeace is said to be chartering a vessel to try to block Shell) and to guard against other Arctic nations such as Russia that might try to grab for themselves oil fields that rightfully belong to the U.S., Canada or other nations. There is also a need for expanded safety operations to ensure an adequate response in case of accidents or oil spills.

All of this calls for a greater Coast Guard presence, yet this perennially underfunded service is hard put simply to base two helicopters in Barrow for a few months–an operation which will require renting scarce hanger space. The entire Coast Guard has but one modern icebreaker, the Healy, commissioned in 1999; there is an urgent need for more icebreakers but despite years of talk, Congress has never budgeted the funds. (A new icrebreaker would cost $1 billion if built in America–considerably less if in South Korea.) The money coud be assessed directly as a user fee on oil companies, but that would require a change in current laws which send all oil taxes straight to the the general funds of the U.S. Treasury and the state of Alaska where they are used for myriad other purposes.

A broader struggle for control of the Arctic looms as age-old ice melts, uncovering not only oil but other valuable resources from minerals to fish stocks and creating new shipping lanes, at least in the summertime, which cut the time of travel between the Pacific and Atlantic. Other nations, such as China and Russia, are investing in icebreakers and ice-strengthened ships to take advantage of these new opportunities; as my Council on Foreign Relations colleague, Coast Guard Captain Melissa Bert points out, the U.S. lags behind. That is only one of many national security challenges that need to be addressed, but it is hard to imagine dealing with this issue, or others, if military spending is subjected to an indiscriminate sequester come January 1.

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Impotent Measures Against Iran

Secretary of State Hillary Clinton won grudging praise even from the Wall Street Journal editorial board for managing to reach agreement with China and Russia on a UN Security Council sanctions resolution against Iran. That accomplishment was touted as undercutting Iran’s attempts to avoid a fresh round of sanctions by agreeing to export some of its enriched uranium in a deal brokered by Turkey and Brazil. But now the details of the sanctions resolution are emerging and they are even worse than expected.

As the New York Times notes, “What is notably absent from the draft resolution, however, is any binding restriction on transactions with Iran’s central bank.” Nor is there any binding language limiting Iran’s oil trade, the basis of its entire rotten regime. As the Wall Street Journal notes: “The resolution — which followed 20 rounds of ‘hard bargaining,’ said Chinese diplomats quoted by the state-run Xinhua news agency — puts no direct restrictions on investing in Iran’s energy sector. That should allow Chinese oil companies to continue working in Iran, and China to continue consuming Iranian oil. Iran was the third-biggest supplier of oil to China last year after Saudi Arabia and Angola.” Oh, and the sanctions resolution even lacks a total ban on weapons sales to Iran.

That rather undercuts the Obama administration’s naive rationale for reaching out to the mullahs last year even as their own people were rebelling against them. The administration claimed that an outreach effort in good faith would make it easier to rally world opinion in favor of tough sanctions. Skeptics (myself included) were never convinced that countries like Russia and China would agree to binding sanctions under any circumstances. That skepticism certainly seems warranted now.

Given the weak nature of the latest sanctions resolution, one wonders, “What’s the point?” Certainly no serious analyst can possibly imagine that this will stop the Iranians from going nuclear. At most it provides a talking point for the administration to claim that it’s doing something about Iran’s nuclear program while in fact avoiding tough action – such as imposing sanctions on Shell, Total, and other Western oil companies that, according to the Wall Street Journal, continue to trade with Iran. Such sanctions are already possible under the 1996 Iran-Libya Sanctions Act, which would be strengthened by legislation that has already passed both houses. But the Obama administration shows no interest in implementing such tough measures. Instead, we are left with empty posturing. One suspects that the president has already decided that a nuclear Iran is a done deal and that the U.S. should concentrate on containment and deterrence rather than on prevention. If so, I wish the White House would just come out and say so rather than pretending that this new sanctions resolution will achieve anything.

Secretary of State Hillary Clinton won grudging praise even from the Wall Street Journal editorial board for managing to reach agreement with China and Russia on a UN Security Council sanctions resolution against Iran. That accomplishment was touted as undercutting Iran’s attempts to avoid a fresh round of sanctions by agreeing to export some of its enriched uranium in a deal brokered by Turkey and Brazil. But now the details of the sanctions resolution are emerging and they are even worse than expected.

As the New York Times notes, “What is notably absent from the draft resolution, however, is any binding restriction on transactions with Iran’s central bank.” Nor is there any binding language limiting Iran’s oil trade, the basis of its entire rotten regime. As the Wall Street Journal notes: “The resolution — which followed 20 rounds of ‘hard bargaining,’ said Chinese diplomats quoted by the state-run Xinhua news agency — puts no direct restrictions on investing in Iran’s energy sector. That should allow Chinese oil companies to continue working in Iran, and China to continue consuming Iranian oil. Iran was the third-biggest supplier of oil to China last year after Saudi Arabia and Angola.” Oh, and the sanctions resolution even lacks a total ban on weapons sales to Iran.

That rather undercuts the Obama administration’s naive rationale for reaching out to the mullahs last year even as their own people were rebelling against them. The administration claimed that an outreach effort in good faith would make it easier to rally world opinion in favor of tough sanctions. Skeptics (myself included) were never convinced that countries like Russia and China would agree to binding sanctions under any circumstances. That skepticism certainly seems warranted now.

Given the weak nature of the latest sanctions resolution, one wonders, “What’s the point?” Certainly no serious analyst can possibly imagine that this will stop the Iranians from going nuclear. At most it provides a talking point for the administration to claim that it’s doing something about Iran’s nuclear program while in fact avoiding tough action – such as imposing sanctions on Shell, Total, and other Western oil companies that, according to the Wall Street Journal, continue to trade with Iran. Such sanctions are already possible under the 1996 Iran-Libya Sanctions Act, which would be strengthened by legislation that has already passed both houses. But the Obama administration shows no interest in implementing such tough measures. Instead, we are left with empty posturing. One suspects that the president has already decided that a nuclear Iran is a done deal and that the U.S. should concentrate on containment and deterrence rather than on prevention. If so, I wish the White House would just come out and say so rather than pretending that this new sanctions resolution will achieve anything.

Read Less