Pacific Maritime Magazine - Marine Business for the Operations Sector

Priorities

 


Earlier this year, Royal Dutch Shell Plc. announced an end to its Arctic operations, after 10 years and $7 billion, citing, in part, “…the challenging, unpredictable federal regulatory environment in offshore Alaska.”

The Shell plan foresaw a long development time (15 years or more) but a payoff of more than 500 million BOE at a minimum. The BOE (Barrel of Oil Equivalent) is a unit of energy based on the approximate energy released by burning one barrel (42 US gallons) of crude oil.

It’s just as well, really. The US isn’t equipped to operate along its fourth coastline, nor will it be anytime in the next ten years.

More than half of the entire coastline of the United States is found in Alaska – 6,640 miles of a total 12,749 miles – 53 percent to be exact. Much of that is in the Arctic, and in fact the roughly 1,000 miles of Arctic coastline in Alaska would make it second only to Florida’s 1,350 miles of much warmer water. Washington, Oregon and California combined have fewer than 1,300 miles.

The US Coast Guard has a fleet of warm water vessels to cover the other three coasts, but only two icebreakers of any value in the Arctic; Polar Star, a 40-year-old heavy icebreaker and Healy, a 17-year-old medium-duty ship. A new icebreaker to the same standards would be capable of breaking through two meters (6.5 feet) of ice at 3 knots, and capable of breaking ice of almost 7 meters (22 feet) by backing over it.

The US has several shipyards that could build a new icebreaker fleet, including General Dynamics/NASSCO in San Diego. A new icebreaker will require $1 billion and at least 5 years to build from the day a contract is signed. If Congress had authorized a new icebreaker back when Shell was making Arctic exploration plans, we’d be Christening a new ship this year.

In September 2015 Arizona Senator John McCain scolded President Obama for turning a blind eye to Russia’s Arctic advances while focusing on global warming. Earlier the President had announced his intention to accelerate, by two years, the acquisition of one heavy icebreaker to replace the Polar Star, making the acquisition a zero-sum situation. In order to meet President Obama’s 2020 deadline, the project should have started a year ago, when, in this same space, we were discussing Senator McCain’s insistence that the US doesn’t need shipbuilders.

The builders are available and the need is evident, but the political will is weak. Our icebreaking capability is, literally, on borrowed time. Meanwhile, Russia and China have newbuild, heavy icebreakers, in the pipeline or operational, to take advantage of as yet untold Arctic wealth, as we sit by and watch them plan to carve up the Arctic for themselves.

Chris can be reached at chris@pacmar.com

 
 

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