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71 Fall 2015 Proceedings www.uscg.mil/proceedings Consortium Rosneft, which successfully drilled an offshore Arctic well in 2014, announced it would cancel drilling in 2015 due to ongoing international sanctions, and in Green- land, oil companies are relinquishing their leases. 34 Mean- while, some IOCs like Total S.A. have eschewed Arctic oil exploration and production altogether, deeming Arctic operations too environmentally risky. 35 ENI, Shell, and Hilcorp are exceptions to this trend. In Feb- ruary 2015, ENI's newest foating production storage and offoading platform Goliat began a two-month voyage from South Korea to the northern tip of Norway. When installed (planned for summer 2015), it will become the world's north- ernmost offshore oil production facility. 36 Shell has indicated its intention to drill in the U.S. Arctic OCS in 2015 despite cutting its exploration and production budget by $15 billion. The company views the U.S. Arctic as a long-term invest- ment and an opportunity to "book" large conventional reserves. While the current oil price reduces available capi- tal for new investments, Shell has already sunk signifcant investments into its previous ventures in the U.S. Arctic. 37 The Outlook During the next several decades, world oil and natural gas consumption is forecast to continue to grow. Limited access to "easy oil" will drive companies like Shell to seek frontier resources that require signifcant capital investments and technical expertise. The Arctic's large resource potential will remain a tempting opportunity to "book" new reserves. While drilling in the U.S. Arctic outer continental shelf is not new, the environmental and logistical challenges remain high. The U.S. federal government, led by BOEM, BSEE, and the USCG, is working to improve its regulatory and response framework to facilitate safe, effective, and environmentally responsible exploitation of U.S. natural resources on behalf of the American people. About the author: LT Fainer was the energy and commerce analyst for the Intelligence Coor- dination Center from 2014 through July 2015. He has served in the Coast Guard for six years, and is completing his M.S. at the National Intelligence University. Endnotes: 1. U.S. Geological Survey, U.S. Department of the Interior, "90 Billion Barrels of Oil and 1,670 Trillion Cubic Feet of Natural Gas Assessed in the Arctic," July 23, 2008. 2. Jad Mouawad, New York Times, "Oil Survey Says Arctic Has Riches," July 24, 2008. 3. U.S. Energy Information Administration, "Europe Brent Spot Price FOB," accessed Feb. 2015. 4. Emily Chasan, Reuters, "Judge approves Lehman, Barclays pact," Sept. 20, 2008. 5. See www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rbrte&f=d. 6. Oxford Analytica, "NOCs Challenge IOCs," Forbes, Feb. 23, 2010. 7. U.S. Bureau of Ocean Energy Management, U.S. Department of Interior, "Lease Sales, Alaska OCS Region," updated Feb. 1, 2015. 8. Ibid. 9. Guy Chazan, The Wall Street Journal, "Cold Comfort: Arctic Is Oil Hot Spot," July 24, 2008. 10. U.S. Bureau of Ocean Energy Management, U.S. Department of Interior, "Alaska OCS Region: Beaufort Sea Exploration Wells," Oct. 6, 2006. 11. Ibid. 12. Alaska Department of Natural Resources, Division of Oil and Gas, "North Slope Oil and Gas Activity Map," Mar. 2014. 13. Alaska Oil and Gas Conservation Commission, Alaska Department of Adminis- tration, "Oil and Gas Pools — Statistics Pages." 14. U.S. Department of the Interior, "Review of Shell's 2012 Alaska Offshore Oil and Gas Exploration Program," March 8, 2013. 15. U.S. Department of the Interior, "Review of Shell's 2012 Alaska Offshore Oil and Gas Exploration Program," Mar. 8, 2013. 16. Alex DeMarban, Alaska Dispatch News, "Ice-road construction reaches new levels on Alaska's North Slope," Jan. 8, 2014. 17. National Snow and Ice Data Center, "Sea Ice Index: Sea Ice Extent." 18. National Oceanic and Atmospheric Administration, "United States Coast Pilot 9: Pacifc and Arctic Coast Alaska: Cape Spencer to Beaufort Sea," 2010 (28 th edition). 19. National Oceanic and Atmospheric Administration; 2013; Coast Pilot 9 "Alaska: Cape Spencer to Beaufort Sea," 31 st ed.; pp. 461, 463. 20. National Oceanic and Atmospheric Administration; 2012; Distances Between United States Ports, 12 th ed.; pp. 34, 43. 21. Alyeska Pipeline Service Company, "Facts: Trans Atlantic Pipeline System," May 1, 2013. 22. Dan Ritzman, Sierra Club, "The National Climate Assessment and Our Arctic Future," May 6, 2014; The Pew Charitable Trusts, "Arctic Standards: Recommen- dations on Oil Spill Prevention, Response, and Safety," September 23, 2013; World Wildlife Foundation Global, "Priority Places: The Arctic.". 23. Bureau of Ocean Energy Management, U.S. Department of the Interior, "Chukchi Sea Oil and Gas Lease Sale 193," Apr. 6, 2015. 24. Earth Justice, "Environmental Groups File Lawsuit Challenging Shell Oil's Risky and Reckless Arctic Drilling Plan," June 2, 2015. 25. BOEM and BSEE, Proposed Rule, Oil and Gas and Sulphur Operations on the Outer Continental Shelf — Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf, published in the Federal Register on Feb. 24, 2015 (80 FR 9916-9971). 26. Jennifer A. Dlouhy, Alaska Dispatch News, "Arctic offshore drilling could resume next year before new federal rules are in place," Aug. 18, 2014. 27. Jennifer A. Dlouhy, Fuel Fix, "Oil companies want more time for Arctic drilling," Oct. 28, 2014. 28. U.S. Energy Information Administration, "Weekly Europe Brent Spot Price FOB," July 22, 2015. 29. U.S. Bureau of Ocean Energy Management, U.S. Department of Interior, "Deep- water Production Summary by Year." 30. U.S. Energy Information Administration, "International Energy Statistics: Pro- duction of Crude Oil, NGPL, and Other Liquids." 31. OGJ editors, Oil & Gas Journal, "Sharp drop expected in global E&P spending in 2015, study says," Jan. 8, 2015. 32. Scott Haggett, Nia Williams, and Ernest Scheyder, Reuters, "UPDATE 2: Chevron cancels Canadian Arctic drilling as oil prices slide," Dec. 17, 2014. 33. Mikael Holter, Bloomberg, "Statoil Puts Arctic Exploration on Hold After Oil-Price Plunge," Jan. 29, 2015. 34. Nick Cunningham, Oil Price.com, "Arctic Oil on Life Support," Feb. 1, 2015. 35. Guy Chazan, "Total warns against oil drilling in Arctic," Financial Times, Sept. 25, 2012. 36. Rob Almeida, "Goliat FPSO Prepares for 60-Day Voyage Aboard the Dockwise Vanguard," Feb. 10, 2015. 37. Brian Scheid, Platts, "Feature: Oil prices seen as a minor factor in Shell's 2015 Arctic Decision," Dec. 18, 2014.