Want to Drill in Greenland? You Need to Prepay for Your Oil Spill
Written by Manda Jamsey
We’re not sure how we feel about this. Greenland, which we’ve previously reported has opened up large areas of its territorial Arctic Sea waters for bids from global oil companies to drill and prospect to drill, is also telling those companies that if they even want to bid for the rights to drill they much each pay an estimated two billion dollar upfront “bond” to cover the clean up costs from any large oil spills. Apparently, Greenland has learned a lesson from the disaster of the now seemingly forgotten Gulf of Mexico Oil Spill. And the pre-pay bond requirement is the first of its kind anywhere in the world.
But the question is, is there anything okay about essentially saying, “We know that oil drilling in the ocean will lead to a spill or disaster at some point. Let’s just make sure you have the cash to cover those clean up efforts later.”
Right now, there are about half a dozen major oil companies negotiating with Greenland for the rights to drill. It’s believed (but unconfirmed) that those companies include Shell, Cairn Energy, Statoil, and the Danish companies Dong and Maersk Oil.
The spill, or the assumed future spill, by the way, is actually almost an assured happening. The waters that the companies are bidding to drill in are largely unexplored waters and much of the drilling area is in deep water. All of the area being considered could be generously described as “harsh conditions,” by which we mean that any episode of Deadliest Catch that you’ve ever seen will pale in comparison.
Stay awake though, because the winners of the right to drill may be announced as early as this week. After all, what’s two billion in bond for a company who’s going to make multiple billions from the results of the drilling? The one upside however is that the bond must be paid at the time of exploration, and realistically no drilling would then happen for another three or four years because of the time that would be required for mapping and geological work. In that time, perhaps we will have transferred to enough clean and renewable energy that the oil will be worth less. One can hope.