Politicians have the propensity to ignore risks and march forward and we have

weathered waste from nuclear weapons in our groundwater, coal ash in our

llakes, the savings and loan fiasco and recent economic meltdown, poor preparation

and response to Katrina -- all costing taxpayers bilions of dollars. Economists have

estimated the seafood industry to contribute $5.8 billion and 78,500 jobs to the

Alaskan and US economy and add tourism and hunting atop these statistics. Before

we rush to drill, we need to absolutely sure we don't destroy the wealth livelihood of

other Americans especially when 24 recent studies conclude the US can meet all it's

energy needs with high-value energy efficiency and renewable energy.

At Shell, we have reason to believe the Alaska offshore could be home to some of the most prolific, undeveloped hydrocarbon basins left on the planet. These oil and gas resources, in combination with an abundance of marine mammals and a centuries-old subsistence culture, place the Alaskan Arctic on a stage that has few rivals. Against this backdrop, Shell has invested five years and more than $3.5 billion in an effort to provide jobs and energy to a nation desperate for both. We have made an unwavering commitment to plan and operate in the most environmentally responsible way possible. For us, achieving that balance is the only clear way to sustainable, energy production.

Our confidence in exploring the Alaska Outer Continental Shelf (OCS) responsibly is informed by technology, sound science, and the proven track record we bring to the very shallow waters we hope to operate. By way of successful exploration drilling programs in the Beaufort and Chukchi Seas in the 1980s and 1990s and years of data collection, Shell has an excellent picture of the resources in play - and not just oil and gas.

The result of that understanding is an Alaska exploration program that meets the high standards Americans expect from a world offshore leader. This is underpinned by significant environmental impact studies performed by federal regulators to support exploration leasing and industry-funded science that adds to a century-long compendium of data. To date, more than $400 million has been spent by federal agencies collecting baseline science in offshore Alaska. That's in addition to the more than $60 million spent by Shell since 2005. Make no mistake; Industry's continued interest in the Arctic is driving the acquisition of additional science. Without it, governments have proven weary, over the decades, of making these massive investments alone.

From Shell's perspective, exploring for the oil and gas believed to be trapped in the Alaska offshore is an "and" proposition. As in: exploration and subsistence hunting, development and environmental stewardship, production and jobs for Americans. On these important issues, we would not consider trade-offs or shortcuts. If we were not completely confident in our ability to coexist in the Alaska offshore, we simply wouldn't be there.

Period.

But the hard truth is Alaska, and the rest of the U.S., need us to be there. Energy demand is expected to increase by 50% by the year 2030 and double by 2050. Now, also by 2050, up to 30% of the world's energy could come from renewables. That goal requires a large amount of effort and sustained investment. Our ability, as a company, to make those kinds of investments is tied to our ability to achieve commercial success in places like Alaska.

There is no such thing as "easy oil" anymore, and the estimated reserves in the Chukchi and Beaufort basins could play a major role in extending the life of the Trans-Alaska Pipeline and securing jobs for tens-of-thousands of Americans.

To tap the estimated oil and gas reserves in the Arctic, Shell has assembled the most environmentally sensitive and thoroughly responsible exploration plan in history. That includes a world-class oil spill response fleet that would be on-site 24/7 and capable of recovering oil within 60 minutes. Shell has also committed to engineering a capping and containment system that would capture hydrocarbons at the source in the extremely unlikely event of a blowout. I have the utmost confidence in the prevention and response measures we have taken in Alaska. Not only do I anticipate round-the-clock regulatory oversight of all our drilling operations, I welcome it.

Additionally, Shell and industry partners continue to make advances in spill prevention and recovery technology. Even though Shell plans to explore only during the open water season, which is largely free of sea ice, we are participating in joint industry projects that simulate the harshest of Arctic conditions, including sea ice. Recent trials in Norway substantiate the majority of oil spilled on ice-covered waters can be removed if the right tools and techniques are used. But that responsibility lies strictly with the operator – not the State of Alaska.

Or, the Coast Guard.

In the days and weeks following the Deepwater Horizon tragedy, the Coast Guard played a valuable role in the response. Though not tasked with repairing damaged wells, oil recovery or clean-up, the Coast Guard worked hard to ensure that responsible parties were doing everything they could to stop the leaking well and minimize the environmental damages. To be clear, the Coast Guard has not been in the business of recovering oil for decades. But, they have been in the business of forming a centralized command following a major marine incident - a coordinated response we all witnessed in the Gulf of Mexico in 2010. Shell supports the Coast Guard's effort to achieve new icebreakers for use in the Arctic, but not at the expense of further delays in our shallow water exploration program.

Finally, Shell has tremendous admiration and respect for the people and resources of the great state of Alaska. Our 50-year history as an offshore explorer and producer in Alaska has allowed us perspective on the values and cultures that thrive there. But, there is always more to learn. So, we listen. Shell has hosted hundreds of forums designed to engage Alaskans - particularly North Slope residents - on the issues and concerns they have with offshore exploration. The vast majority of attendees come to listen and contribute. As a result, we have altered our programs and continue to find common ground. Over the last five years, Shell has experienced successful seismic, geotechnical and scientific programs that have coincided with fruitful subsistence bowhead whale hunts – further proof we can peacefully and responsibly coexist.

Shell remains an open book, and we will continue to share our aspirations, as well as our track record, with anyone. At Shell, we will take our chances finding new oil and gas reserves, but we will never gamble with the environment or the lives of Alaskans who view the Arctic Ocean as their garden.

Last year’s tragic spill in the Gulf Coast clearly demonstrates that our dependence on oil – be it from hostile nations or friendly coasts – hurts our economy, threatens our security and harms our environment. In the wake of that catastrophe, the Obama Administration should be commended for putting in place a number of new safety measures to reduce the risks from offshore drilling—though the risks of offshore drilling can never be eliminated.

The Arctic Ocean is a place where those risks are significantly heightened, which is why we are disappointed that drilling in these especially fragile waters is still under consideration. The United States Geological Survey concluded that we lack even the most basic science about the Arctic ecosystem, let alone how drilling—or God forbid, a spill—would impact aquatic life up there. And if there were a spill, effective spill cleanup capacity in this remote area is non-existent. Don’t take it from me: the Coast Guard’s top official, Commandant Robert Papp, told members of Congress that the federal government currently has “zero” spill response capability in the Arctic. Shell and other oil companies are not only unprepared for an oil spill in the Arctic, but Shell’s oil spill response plans are full of blatant falsehoods and cannot possibly get the job done in the event of an emergency. That sounds like a recipe for another oil spill disaster like we saw last year in the Gulf.

As the president himself has said on numerous occasions, the nation that leads in the creation of a clean energy economy will be the nation that leads the 21^st century’s global economy. We should be transitioning our nation away from dangerous offshore drilling and towards cleaner, more secure sources of energy made in America. It makes absolutely no sense to endanger America’s coasts with dirty and dangerous offshore drilling, be it in the Arctic or elsewhere.

It’s been a busy time for the Obama administration’s rubber stamp of Big Oil’s to do list. In August, the administration approved the first part of Shell’s plans to start drilling in Alaska’s Beaufort Sea as early as the summer of 2012, the most aggressive Arctic drilling proposal in the history of the country. And just this week, the administration reaffirmed the sale of almost 500 oil and natural gas leases in the adjacent Chukchi Sea, opening 2.8 million acres to drilling. This isn’t just giving offshore drilling the green-light; this is slamming on the accelerator, apparently with the hope or expectation that the obstacles in the road ahead—the rough, frozen Arctic seas, the harsh climate and remote location—magically vanish.

What ever happened to the Obama administration’s stated commitment to make decisions “based on sound science and the public interest, and not on the special interests?” Because if that commitment held true, the government wouldn’t allow drilling in the Arctic’s extremely sensitive and unique marine environment until we have filled the glaring information gaps identified by the U.S. Geological Survey just this summer. It would have acknowledged the recent studies that show that the Beaufort Sea’s Camden Bay provides habitat of “special significance” to the endangered bowhead whale. And it certainly would have heeded the U.S. Coast Guard officials’ repeated warnings that the resources to clean up an oil spill in the waters of the Arctic Ocean simply don’t exist. And yet none of that information has slowed down the “full speed ahead” attitude toward drilling in the Arctic Ocean.

After BP’s Deepwater Horizon oil disaster, the Obama administration wisely delayed plans by Shell Oil to drill in the Arctic. Now is not the time to give in to pressure from Big Oil and forgo that prudent commitment to safety. There is still too much to learn about the pristine Arctic environment, and too much to lose if we don’t. When it comes to opening the Arctic waters to risky drilling, the administration should not let the voice of reason—and of science—fall on deaf ears.

I had the privilege to serve on theNational Commission on the Deepwater Horizon Oil Spill and Offshore Drilling. In addition to focusing on the Gulf of Mexico, the commission examined drilling in the Arctic Ocean, and we concluded that critical research and response gaps must be closed before drilling in the Arctic can proceed safely.

Those gaps have not yet been closed. Allowing Shell Oil to drill before those issues have been addressed would leave the region’s communities, economy, and marine life vulnerable to significant harm.

It took five months to kill BP’s ruptured oil well in the Gulf of Mexico, even though it occurred in a well charted body of water near a heavily populated coastline, in a warm climate, and close to thousands of available cleanup vessels.

The Arctic has none of those features. The region is dominated by extreme cold, dense fog, and long periods of darkness. Much of the year it is covered by ice, which could trap oil in the ice and water for months a time. Each one of those elements would make a spill response effort more challenging, but they are compounded by remoteness.

The area around the Beaufort Sea where Shell plans to drill has few roads, shipping ports, or airports. The Coast Guard oversees spill response, yet the closest Coast Guard base to the leasing sites is 1,000 miles away.

Two of the Coast Guards polar icebreaking vessels are not even operational, leaving them with only one. Bringing rescue crews and clean up equipment to the Arctic environment would be a staggering challenge. And even if we could get them there, we still do not know how to clean up oil in broken ice.

Nor do we know what a spill would do to the Arctic marine environment. Very little research has been done yet in these waters; we have only a narrow body of research focusing on just a few species. Until we have more information in hand, federal agencies cannot make a sound judgment about when and where drilling in the Arctic Ocean is safe.

The Arctic is the last wild ocean on Earth. Instead of plunging ahead using the same old practices, we should apply lessons learned from other waters, including the Gulf of Mexico.

When I served on the commissions, I heard federal officials testify that they lacked the money, staff, and expertise to ensure offshore oil rigs were following the rules. And I heard oil executives admit that the industry lacked a rigorous safety culture and best practices for operating in the offshore environment.

Government agencies have since made some reforms, but they still have more work to do. The same is true for the oil industry. Meanwhile, Congress has not passed a single law to strengthen environmental and worker safety standards in the wake of the Deepwater Horizon disaster.

By allowing drilling into the Arctic Ocean before the government and the industry have addressed the failures that led to the Deepwater Horizon blowout, the administration is taking a dangerous gamble.

President Obama is considering allowing oil and gas exploration in the Arctic Ocean. Unlike drilling in the Gulf of Mexico and other areas, the Arctic presents a unique and dangerous set of challenges. Anyone who has seen the show “Deadliest Catch” knows that the waters off western Alaska are some of the most treacherous places in the world.

The Arctic Ocean to the north is just as perilous and even more remote. Cleaning up oil there, particularly in icy waters, has not been proven to work. Massive storms, fog, and shifting sea ice are the norm in this isolated area, where the sun sets and doesn’t rise again for two months in the winter. In addition to rough seas year round, ice moves in around mid-October and stays until late June. There is no road system, no major ports, and no permanent Coast Guard presence. That is what we know about the region, but it’s what we don’t know that should give the Obama administration even more pause.

There are tremendous gaps in our scientific understanding of the vulnerable Arctic Ocean ecosystem, particularly in the face of climate change. Furthermore, oil and gas exploration and development will bring significant noise, water, and air pollution—and the cumulative effects of the infrastructure and of maintenance and service activities on this pristine ecosystem are unknown. That is why last June Interior Secretary Ken Salazar asked the U.S. Geological Survey (USGS) to step in and identify science needs in the remote Chukchi and adjacent Beaufort seas. The USGS came back with more than 50 findings.

The Pew Environment Group and Ocean Conservancy commissioned 14 scientists, all experts on the Arctic marine ecosystem, to independently review the USGS report and recommend concrete next steps (read the full report at www.pewenvironment.org). We found that although the USGS report documented the tremendous scientific effort made in the Arctic, there’s still a long way to go to understand the full impacts of drilling there. The scientists made several recommendations, including establishing long-term monitoring programs and protecting ecologically important areas for bowhead whales, walrus, ice seals, polar bears, and other species found nowhere else in the nation.

Science, not politics, should guide decision making about if, when, where and how drilling can safely take place in the extreme yet fragile Arctic Ocean. We do not want drilling to move faster than science and spill response planning. Following the scientists' recommendations and implementing the USGS report is the best, first step toward making sound, science-based decisions about offshore oil and gas drilling.

The country is not ready to open Arctic waters to drilling at this time. Just because Shell has purchased equipment and exceeded certain existing regulatory requirements – largely requirements that were in-place prior to the BP Gulf spill – does not mean that enough has changed to move forward with Arctic offshore drilling.

Here’s why federal waters in the Arctic should not be open for drilling, with my reasoning based on the key reports published since the Gulf spill. Critical needs that have not been filled are:

1. An adequate legislative and regulatory oversight framework for safety and spill prevention and response. Gaps in safety and spill prevention and response have been identified by the Department of the Interior in a technical report to the President (May 2011), in the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling report (January 2011), and by the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE)/U.S. Coast Guard Joint Investigation Team report on the BP Gulf spill (September 2011); and,
   
2. A defensible science framework for the Arctic Ocean as described by the U.S. Geological Survey report (June 2011). Such a framework would provide comprehensive information on the marine resources that would be affected by drilling.

Since the BP Gulf spill, Congress has not passed any legislation to fill the identified needs. These needs include ensuring adequate and stable funding for the key regulatory agencies such as the U.S. Coast Guard which currently has no infrastructure in the Arctic, significantly increasing the liability cap and financial responsibility requirements, and providing whistleblower protections for offshore workers.

Similarly, the Bureau of Ocean Energy Management and its sister agency the Bureau of Safety and Environmental Enforcement (newly created out of BOEMRE on October 1, 2011) have not addressed most of the identified safety and environmental protection needs. For example, federal regulators have not issued new blowout preventer configuration and testing requirements, have not engaged an engineering consultant to benchmark U.S. regulations against the highest international standards to identify regulatory needs (e.g., should the U.S., like Norway, evaluate offshore drilling operators’ performance before issuing them leases?), and have not required operators to prove their equipment can recover a meaningful percentage of spilled oil under broken ice conditions.

To make matters worse, Alaska’s legislature decided this year to eliminate funding for the state’s coastal management program which means that there will be only limited local input into federal offshore decisions in the Arctic from now on.

On October 3, 2011, the Obama Administration reaffirmed the Chukchi lease sale in the Arctic Ocean which brought in over two billion dollars to the federal government under a leasing program carried out by the Bush Administration. The decision to reaffirm the leases, along with an August 2011 conditional approval by BOEMRE of Beaufort Sea drilling, shows that the Obama Administration has not yet made essential changes in its Arctic Ocean drilling policy.

Given the Arctic Ocean’s near-pristine environment, the importance of protecting critical coastline from oil spills – including the Arctic National Wildlife Refuge which is a mere 16 miles from where Shell wants to drill in 2012 – and Congress’ and our nation’s scientific agencies not implementing needed, post-BP changes, I am left, sadly, with no alternative but to continue to oppose Arctic offshore drilling at this time.

The road to Chukchi and Beaufort has been a very long one, not only for Shell Oil and the other companies that initially bid for drilling rights back in 2008, but for the American people who have been waiting almost as long for an economic recovery. Indeed, the wait for a sound national energy policy based on using more of our own natural resources and importing less, dates back much further. Today, Alaska’s Chukchi and Beaufort Seas offer perhaps the best hope for a large and sustained increase in domestic oil and gas production: Experts believe the Chukchi and Beaufort Seas may hold one of the largest untapped sources of oil and gas in the entire world – with possibly more energy resources than Libya, Nigeria or Norway.

Tapping such a large source of domestic oil and gas production would bring multiple economic benefits, from reducing our trade deficit to creating thousands of well-paying jobs. And while lawmakers need to pay attention to such economic benefits, they should also consider the project’s safety profile. The oil and gas industry has completed an extensive review and demonstrated its plans to drill in a manner that would exceed all regulatory standards. And it has done so to the satisfaction of the Bush and the Obama Administrations, both of which green-lighted the project after conducting extensive reviews – only to have these projects locked in procedural and legal delays. The Obama Administration, in fact, just last week approved (again!) a plan of exploration in the Beaufort Sea for Shell Oil Company.

The Macondo blast in the Gulf of Mexico offered many lessons about the business, the technology and most important, the safety of drilling and we should heed all of those lessons before embarking on a major new drilling project. First, we must hold all of our drilling projects to the highest standards to protect the environment and worker safety. More than a year after the tragedy in the Gulf, the oil and gas industry – in partnership with the Interior Department – have shown that they understand this as well as anybody. In fact, Shell, ExxonMobil, Chevron and ConocoPhillips have teamed up to form a rapid-response alliance to develop improved technology and an overall response plan for containing spills. For practical purposes, however, it’s worth noting that the Chukchi Sea is fairly shallow, and drilling there would be akin to the near‐shore shallow‐water Gulf of Mexico, where safe drilling practices have led to a long history of safe operations.

Finally, we cannot forget the economic lessons of the Macondo blast and the moratorium on deep water drilling in the Gulf that followed. Our country’s Gulf region, which is still recovering from that disruption, has learned that overly restrictive policies can be hard to reverse: Long after that 2010 moratorium was lifted, the Gulf continued to see reduced drilling activity. We have learned that oil is not an isolated industry but one that supports a host of other equipment, technology and service industries. And we have learned that equipment rarely sits idle. In the Gulf, this meant that rigs idled by the moratorium departed for distant shores from Angola to Vietnam.

In Alaska, the risk of failing to produce our natural resources is a little different but also very real: The Trans‐Alaska Pipeline is one of the largest pipelines in the world, but is now threatened by declining rates of oil production. Offshore resources – like those that Shell hopes to produce – are desperately needed to offset these declines and keep the pipeline – a critical piece of our national infrastructure – in operation.

(These comments were submitted by Margaret Williams, Managing Director of WWF-US’s Arctic Field Program.)

If a major oil spill happened in the Arctic today, it would be impossible to clean it up much of the time, and research indicates that a clean-up would not be possible 44 to 84 per cent of the short Arctic drilling season. For the remaining seven or eight months of the year, during the ice-covered winter, no spill cleanup would be possible given environmental conditions such as winds, waves, temperature, visibility and daylight. This is not the first study to show that oil cannot be effectively cleaned up in ice covered waters. And, earlier this year, another oil company learned just how hard it is to clean-up oil in icy waters. In February 2011, a cargo ship ran aground just outside of Oslo, Norway, spilt up to 500 tons of fuel oil into the fjord’s icy waters. Norwegian authorities attempted to contain the spill, but the presence of ice complicated the efforts, and currents spread the oil as much as 100 kilometers up the coast. These are but a few of the many reasons why President Obama should keep the Arctic closed to drilling.

In 1770, John Adams observed:

Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.

Nearly two and a half centuries have yet to change that reality. And the facts dictate that the Obama Administration should stop slow walking approval for Shell to drill in Alaska’s arctic waters. Federal officials’ protracted dithering on permits to explore and develop resources in the Chukchi Sea (not to mention the Gulf of Mexico and the coastal plain of Alaska) only further delays the day when we can increase domestic production.

Oil and gas will remain major sources of energy for us and the rest of the world for decades to come. In fact, just last month analysts within the administration forecast global oil demand would increase to 112.2 million barrels per day in 2035—up 27 percent from 2011.

It is a fact that the U.S. holds vast quantities of untapped traditional fuels. The peak in “peak oil” is like the horizon, it keeps receding as we approach it. Oil production in the lower 48 could increase by 2 million barrels a day by 2016 according to Bentek Energy. Combined U.S. and Canadian oil output will top 11.5 million barrels a day by in the same time period according to a recent press report. And Goldman Sachs estimates that the U.S. could move ahead of Saudi Arabia and Russia by 2017.

Such increased oil production could lead to the creation of 1.3 million jobs by the end of this decade and raise $97 billion in federal taxes and royalties, according Daniel Yergin’s IHS CERA.

It is a fact that the industry has maintained a safe track record for drilling in Alaska’s hostile environment since the 1970s. Scientists and engineers are constantly creating new technologies that make energy production more efficient and environmentally safe. Additionally, the industry has instituted new systems to deal with accidents such as Macundo. Because of these ongoing efforts, the overall safety record of the petroleum industry in deep water and hostile environments is excellent.

In the case of the Chukchi Sea specifically, Shell President Marvin Odum notes “there’s been 5,000 studies and half a billion dollars or more spent on studies on exactly these issues in the Alaskan Arctic. It’s probably the most heavily studied and analyzed area that this country has.” Moreover, the company is willing to put its money where its mouth is.

While the Federal government has been handing out billions of tax dollars to solar companies for energy that may never meet more than a few percent of our energy needs, Shell oil has spent over $2 billion of its funds on the Chukchi leases and still has not put a drill in those icy waters. Private expenditures of this magnitude offer a clear indication that Shell believes the potential oil and gas resources are significant. It’s not alone. Just last week, ExxonMobil signed a $400 million contract for Philadelphia’s Aker shipyard to build two enormous tankers—a truly “shovel ready” project set to create jobs and generate tax revenue.

From shipbuilders to sand manufactures, from shoemakers to steel workers, the oil and gas industry’s investments in America are generating hundreds of thousands of new employment opportunities while the Obama administration’s taxpayer funded push to prop up “green” corporations is hemorrhaging jobs. Just today, news broke of another DOE-backed “green” firm going belly up. Despite receiving $145 million in loans and outright grants, Nevada Geothermal Power now doubts its ability to continue.

It is a fact that our national economic, security, and environmental interests would be best served by developing more of our own energy reserves. U.S. oil companies are the best in the world. Instead of treating them with distain, our leaders should recognize their technological achievements and economic contributions.

Absolutely, the administration should green light drilling in the Arctic. That this is still a question is a reflection of the lethargic and burdensome permitting process that is tying up resources and hobbling domestic economic investment.

We hear a steady stream of chatter from the left that Big Oil is sitting on profits instead of launching new investments in the United States. But what choice have we given them? Shell has invested $3.5 billion and five years in the Arctic. They’ve complied with every request to make their drilling fleet cleaner, prevent and protect against catastrophic spills, and guard against damage to Arctic ecosystems. Still, there’s no answer as to whether they’ll be able to turn this investment into a drop of oil or a cent of profit. To their credit, Shell hasn’t packed up and moved on.

We all know that developing Arctic oil isn’t going to bring back $2 a gallon gasoline, and I’ll be the first to say that we need to set ourselves on a path that diversifies fuels and weans our transportation sector off foreign oil. But we’re passing up significant economic opportunity, high-paying jobs, and improved energy and national security with every development opportunity tied up in red tape.

The President has established an inter-agency group to streamline the permitting process for Arctic drilling. That’s a great start. A better start would be getting these permits out the door and demonstrating a national commitment to responsible domestic oil development.

What factors should the administration consider when deciding whether to give Shell final approval to search for oil in the Arctic?

Other than the obvious overall economic viability questions of projects in such severe environments the administration should also clearly consider the environmental and community impacts of the projects that might happen.

The environmental impact statement (EIS) from the State Department for the TransCanada Keystone XL Pipeline could be seen as a blueprint and a model for such EISs. This covered just about every possible outcome and risk. This EIS is an amazing set of documents.

However, I wonder how many of those in the debate have actually looked at the EIS from State? Probably very few given the arguments that they are using based on little data and a lot of emotion.

Moving into new and difficult environments for exploration and production should really require careful analyses of all angles of the environmental, economic and other aspects of what could happen.

The administration should gather and study the facts as they are and as they would likely be given various scenarios. There is too much sophistry in the political discourse with regard to new energy investments and this sophistry is damaging our ability as a nation to head toward a more secure energy future and a more secure economic future. PT Barnum would get a real kick out of some of the pressure groups now populating the debates on the future of various oil, gas and other energy investments.

The administration and others should also consider what is really happening in oil and gas markets. There are massive finds being developed in the lower 48 from oil shale, shale oil, tar sands, tight gas, shale gas, coal bed methane and more. These massive finds could seriously disrupt the economic viability of any investments in very expensive Arctic reserves depending on how quickly these new finds are developed in the lower 48. For those who think this may be an odd factor to consider think about how fast the Bakken fields are increasing their production.

My sense is that we are in for some quite revolutionary times in the oil and gas business and not just in the lower 48. And these revolutionary times could have a great effect on the profitability and overall cost/benefit analyses of Arctic developments.

But, on the other hand, once we get some appraisal wells set down in northern Russia and other parts of the Arctic we might just see that there is a lot more out there than anyone would have imagined. With technology changes and even administrative changes the industry’s ability to find and exploit reserves could develop at an astonishing rate in the not to distant future.

Things are changing very rapidly in oil and gas. Remember when we were worried about the need to build more gasification plants because the US would need to increasingly import LNG? Now we are considering building liquefaction plants to export the potentially massive natural gas production out of shale gas and other unconventional reserves.

What lessons have the United States learned from the BP oil spill that could inform its decision on Arctic drilling?

One of the main lessons learned from the BP oil spill was that regulators have to keep a very close eye on companies that are trying to cut corners with safety and other regulations. BP was known as a company that cut corners. Their track record prior to the GOM oil spill was far from stellar including major botch-ups that could have been resolved prior to the disasters by investing only a few hundred thousand on facilities and infrastructure worth billions. The Texas City Refinery was a clear case in point.

We also learned that regulators sometimes need regulating themselves.

There is no more MMS for good reasons. There was a bit too much coziness between the regulators and the regulated and all sides lost on this.

For the sake of the oil industry, the environment, the local economies and people, etc. if there is to be drilling in the Arctic regions there should be very strict guidelines on what can and cannot be done. The oil industry will be hit hard globally by suits and more if there are any major spills in the Arctic. The industry would also find it far more difficult to drill in many other places, not just in the Arctic, such as in other remote areas and in further ultra-deep water. The BP disaster should act as a lesson for the industry to be far more careful and dot the Is and cross the Ts in all aspects of such very complex operations. The smartest people in the industry see the importance of keeping things within proper boundaries, safe and controllable.

Another thing we learned from all the BP disaster is to make sure there are some good disaster plans in place to handle worst case scenarios. Many in the industry and the government would rather not spend the money to pre-plan for disasters, but these things do happen and we need to be prepared. The Arctic regions in Alaska where this would be happening would have to have pre-positioned prevention, containment and cleanup infrastructure built into the costs of any of the operations – either just by one company or across many companies. The government also needs to have more people watching and learning and willing to speak up when things do not seem correct. Part of the lessons learned of the BP situation was that complacency helped nobody. BP lost, the local areas lost, the oil industry lost, the government lost, and nobody won anything from this.

The industry will need to fully prepare for surge operations when needed. I am sure they are well along the way on this given that their lawyers are quite aware of what liabilities they now face in a much tenser environment for drilling so let’s see how this proceeds.

What, if anything, should Congress do to influence the process?

Congress could do something? What a concept.

The best thing they could do is to be conveners for a proper debate on where oil and gas exploration should be going and not just in the Arctic. Efforts should be put forth to develop discussions on the full spectrum of our potential future energy resources and what policies could be developed to help the US become more energy secure in a more sustainable way. And by sustainable I mean economically, socially, energetically, environmentally, and more.

We need to have an intelligent debate about the systems-within-systems that will be needed to move our country forward.

Who knows, in the process of looking at the energy issues we might even see opportunities for producing jobs, new industries, redeveloping and redefining old industries and ….. get our economy back on track. We could also find within our energy systems a massive source of revenue via royalties, fees and taxes, even at normal rates, in some of the new energy finds and new energy technologies that could come around the bend. This could help pay off the debt a lot faster than many might think.

Think of the revenues, jobs, and more that could be created from many hundreds of billions (or even trillions) of barrels of oil equivalent and completely new industries that could spring out of new ways of thinking about how we do things and how we energize the things we do?

It could be mind boggling.

Today, the Obama administration is expected to announce a decision about a deeply flawed 2008 lease sale pushed forward by the Bush administration in the Arctic’s Chukchi Sea. Today, the Obama administration has the opportunity to reverse course on what appears to be a headlong rush into drilling in America’s Arctic Ocean.

The question is will the Obama administration live up to its commitment to make decisions “based on sound science and the public interest, and not on the special interests,” as pledged by Interior Secretary Ken Salazar when he took office in 2009?

Because thus far - as made evident by the recent decision to approve Shell Oil’s aggressive, risky plans for exploratory drilling in the Arctic’s Beaufort Sea - the Obama administration has ignored such facts as there is not enough information about the Arctic Ocean to drill safely there and there is no proven method to clean up an oil spill in Arctic conditions (not to mention a critical lack of resources, as the Coast Guard’s highest officer said, we’re starting from “zero” in the Arctic). Instead, President Obama, Secretary Salazar and the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) have given Shell Oil the green light to drill in our one and only Arctic Ocean beginning next summer. This rush to drill could not only destroy one of our nation’s greatest natural treasures, but it could also set the stage for another environmentally and economically catastrophic oil spill.

Today, also marks a new era at the federal agency that regulates and approves U.S. offshore drilling. Formerly known as the Minerals Management Service (MMS) and BOEMRE, the agency has now been split into two new entities - Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM). All this renaming and reorganizing has been part of an effort by President Obama and Secretary Salazar to erase a not-so-distant, shady past in which agency officials maintained a close, personal relationship with the oil industry that fed the tabloids with tales of sex and drugs. The agency’s Alaska office was singled out by a 2010 Government Accountability Office (GAO) report that found the office often withheld key information from environmental analysis staff and suppressed or altered the science used in environmental issues.

A new name and a new structure can’t erase the fact that, thus far, it seems as though the Obama administration has made decisions about drilling in America’s Arctic Ocean based on politics, not science. The bottom line is that there is no way to clean up an oil spill in the Arctic. Deepwater Horizon showed us that the oil industry is woefully unprepared even in the best of conditions, with world-class infrastructure at its fingertips. And, we don’t yet know enough about the Arctic’s marine ecosystem to make any decisions about drilling. Until the Obama administration makes decisions that reflect these realities, the only change will be in name alone.

The “definition of insanity” by doing the same thing over again and expecting different results is exemplified by those who continue to deny the important role oil plays in powering our economy and way of life, and who work to block access to American sources of oil while hoping for an alternative. With oil providing about 97% of the fuel for the transportation sector, alternatives are far off in the future.

Natural gas vehicles, for example, provide a viable alternative, but lack of infrastructure and the small share of the market mean it will be some time before natural gas can replace a significant proportion of gasoline and diesel vehicles. Luckily, since America is the leader in natural gas, we can grow our share of clean-burning natural gas vehicles with domestic production.

Rather than continuing to send billions of dollars overseas and delay job creation, the Obama Administration should approve Shell’s proposal to develop off the coast of Alaska in the Beaufort and Chukchi seas. The government should absolutely consider the environmental impact and Shell’s efforts to mitigate any potential incident. Shell is making significant investments in oil spill prevention and response that includes a 24/7, on-site fleet of response vessels, booms, skimmers, helicopters, capping and containment system, and a polar class ice breaker. Shell’s enhanced blowout preventer plan exceeds BOEMRE requirements.

Shell’s extensive due diligence to ensure the project is protective of the environment includes investing millions in scientific study, marine mammal monitoring, air quality monitoring, ecological characterization studies and health impact assessments. 5,000 independent studies have been conducted since 1973, and the growing body of evidence supports exploration and production offshore in the Arctic. Development could contribute 50,000 jobs annually for 50 years, as well as generate billions of dollars in government revenue, contributing significantly to the U.S. economy while reducing our dependence on foreign oil.

The choice is simple – produce it here at home, or import it from overseas and export jobs and economic prosperity.

(These comments were submitted by Susan Murray, Senior Director, Oceana's Pacific Office.)

In our national quest to quench our oil addiction, we are seeking out riskier places to search for oil and gas. The ice choked waters offshore in the US Arctic are at the top of that list, and we stand on the brink of opening the flood gate to corporate giants to exploit these remote and unforgiving seas.

While there has been significant investment to figure out whether or not there likely are oil reserves in the offshore Arctic, there has been relatively little investment in science to understand how this ocean functions. We know it is home to such iconic species as polar bears, walrus and beluga whales. We know the bounty of the Arctic seas supports the subsistence way of life for coastal communities. Yet we know very little about how the different components of this ecosystem fit together. Partially to answer the question about what science is missing, the Obama Administration tasked the US Geological Survey with producing an Arctic science gap analysis. That report, An Evaluation of the Science Needs to Inform Decisions on Outer Continental Shelf Energy Development in the Chukchi and Beaufort Seas, Alaska, was published in June 2011 and concludes there is significant missing information and these gaps are a “major constraint to a defensible science framework for critical Arctic decision making.”

This report provides a partial blueprint of what we know and what we don’t know, and allows us the opportunity to get the missing information so we can make informed decisions about industrial development and conservation offshore in the US Arctic. The Deepwater Horizon disaster clearly showed that even in the Gulf, there was little information about what areas should be protected first when the oil started gushing. We should not repeat that mistake in the Arctic.

The Deepwater Horizon disaster also vividly showed us that response capability is woefully inadequate, even in a region with many ports and responders. The most recent in-the-water test of oil spill response in America’s Arctic for which public information is available was done in 2000—more than a decade ago. That test focused on some of the primary response options that Shell plans to use—skimmers and booms—and concluded that these tools are not likely to be effective in icy Arctic waters. Neither the State of Alaska nor federal government has any documents showing that a company has demonstrated in the Chukchi or Beaufort Seas that it can respond effectively to an oil spill. This should come as no surprise since only 10% of spilled oil was recovered after the Deepwater Horizon spill, and these technologies have changed little since the Exxon Valdez spill, after which only 8% of oil spilled was recovered. The Arctic offshore situation is further compounded by the fact that the nearest Coast Guard facility is about 1,000 miles away, there is often limited visibility, and there is the perpetual wild card of sea ice. See footage of the last public Arctic spill drill here: http://www.youtube.com/watch?v=2dL3RGwpBaI&feature=player_embedded

As long as we have significant gaps in science and no proven way to clean up a spill in icy Arctic waters, there should be no green light for Arctic offshore oil and gas exploration. Right now, that light is clearly red, and we should stop and heed that warning.

The quick answer is yes, we should produce more of our own domestic energy, including in the Arctic, but we shouldn’t stop just on the production side. Expanded domestic oil and natural gas drilling in the Arctic is important for national and economic security reasons, including the fact that we are currently sending way too much of our hard-earned cash overseas in the form of crude oil purchases. At the current rate, the U.S. trade deficit in crude oil and petroleum products are on pace to surpass $300 billion this year. In 2008, we transferred over $500 billion of U.S. wealth abroad in the same way. This is money that should stay at home, producing jobs and growing the economy at a time when our country really needs it.

If the oil industry and federal regulators can take the lessons of the Macondo spill to heart, it is possible the U.S. can produce energy from the Arctic Ocean in a safe way. Shifting the U.S. offshore regulatory approach from a rule-based to a goal-based approach is a good start, and SAFE has recommended this transformation take place first in areas such as the Arctic where the new approach can be refined with a small number of companies. In the short and medium-term, additional drilling is the best way to secure ourselves.

There remains a caveat to this argument, however. While it is critical to increase domestic production as quickly and safely as possible, it is not the only answer to America’s energy problems, because the U.S. transportation sector would still be directly influenced by global oil markets. Producing more oil at home won’t change the global oil price much, nor will it have an impact on the market’s inherent price volatility. It is no accident that oil price shocks are one of the main causes of every U.S. recession since the 1970s.

In order to truly improve future U.S. energy security, we need more production, greater efficiency in our transportation system, and a shift to alternative fuels, particularly electrification of the light-duty fleet. Electrification would take advantage of the stability of electricity prices, its diversity of supply, and its infrastructure backbone already exists. Only a comprehensive, long-term effort to move the U.S. away from petroleum-based fuels will give the country the energy security with which it can prosper.

At some point, this country will need to wean itself from dangerous fossil fuel extraction and lead the world in finding different ways to power our activities. But in our current culture of two-year “beggar they neighbor” election cycles and oil company money dominance in politics, we continue on a path of business as usual in the name of conservatism (despite the clearly liberal experiment we are playing with our atmosphere and climate). In reality, we are simply fulfilling Albert Einstein’s definition of insanity by “doing the same thing over and over again and expecting a different result.”

Obama/Salazar’s approval of Shell drilling in the Beaufort Sea is in incredibly risky decision, smacking of complete obsequious bowing to Big Oil. Shell’s drilling risks a major oil spill, and neither Shell nor government could respond adequately to such a catastrophe. It risks harming the endangered bowhead whale, a species central to Alaska American Indian subsistence traditions. This decision by Interior ignores many of the lessons of the Gulf tragedy and the recommendations of government scientists, and puts the Arctic Ocean and its coastal communities at extreme risk.

BOEMRE approval of Shell’s drilling plan is silent as to the agency’s assessment of Shell’s oil-spill plan. BOEMRE should not have approved Shell’s drilling plan without an adequate, approved oil-spill plan demonstrating Shell’s ability to cleanup an oil spill in the Arctic’s icy waters. After the Deepwater Horizon disaster, the National Oil Spill Commission identified “the failure to plan effectively for a large-scale, difficult-to-contain spill” in the Arctic as one of the “three critical issues or gaps in the government’s existing response capacity.” As Commandant Admiral Robert Papp admitted to members of Congress, the federal government currently has “zero” spill-response capability in the Arctic. BOEMRE ignored these concerns and approved Shell’s drilling despite an oil spill plan that:

• Assumes that Shell can recover an unprecedented 95 percent of oil spilled in Arctic water using mechanical containment and recovery efforts (like booms and skimmers), despite the fact that such efforts only recovered 8 percent of oil after the Exxon Valdez spill, and only 5 percent of oil after the Deepwater Horizon spill;
• Ignores the fact that the most recent oil-spill response drill in the Beaufort Sea described mechanical cleanup efforts in icy conditions as a “failure”; a video of this drill obtained by Oceana shows how ineffective mechanical recovery efforts are in Arctic waters; and,
• Only plans for a “worst-case” spill in relatively warm and ice-free August conditions, despite the fact that Shell wants to drill through October, when ice, darkness and bad weather prevail.

Additionally, BOEMRE’s approval of Shell’s drilling plan does not resolve the potential for other significant impacts to the Arctic environment. In late June, the U.S. Geological Survey released a comprehensive assessment of existing scientific data on the effects of oil and gas development in America’s Arctic Ocean. The USGS report reinforces what scientists inside and outside the government have been saying for years — that we need a basic understanding of the Arctic Ocean ecosystem before we can drill there. What we do know is that Shell’s planned drilling is directly in the fall migration path of endangered bowhead whales and could block them from reaching an important feeding and resting area. Shell estimates that close to 5,600 migrating bowhead whales, almost half the population, could be exposed to sound and disturbance from the drilling and icebreaking that could cause them to change their behavior and avoid the feeding area. This could harm the population, particularly mothers and young calves, and could affect Alaska American Indian communities that rely on the bowhead whale and other species to maintain their subsistence way of life. Numerous fisheries and ecosystem functions important to our own species are being subject to Russian Roulette.

Unless environmental plaintiffs win in Court, it appears we will have to witness the devastation of the Arctic ecosystem before our government leaders acknowledge they didn’t have it all figured out. And then, a year or two later, the oil industry’s greased political lackeys will ask to drill again. When will enough be enough? The line as been drawn in the Arctic as it has with the proposed US-Canada XL Pipeline. At some point, a leader is going to have to say “no” to this insanity.