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Centrica, E.ON and RWE lead Arctic rush for oil

Coast of Varanger Fjord

The most controversial is the block in the Barents Sea awarded to E.ON, which the Norwegian Institute of Marine Research said should not be opened at all. Photograph: Hans Strand/ Hans Strand/Corbis


Powered by article titled “Centrica, E.ON and RWE lead Arctic rush for oil” was written by Damian Carrington, for on Thursday 4th July 2013 12.52 UTC

Half of the big six energy companies operating in the UK are leading a new dash into the Arctic in search of new oil and gas after gaining exploration licences in Norwegian waters. The push comes despite three of Norway’s environment agencies warning that total or partial drilling bans are needed in most of the blocks.

The most controversial is the block in the Barents Sea awarded to E.ON, which the Norwegian Institute of Marine Research (NIMR) said should not be opened at all, because of the risk to marine life including the largest cods stocks left in the world. RWE, known to UK energy customers as npower, and Centrica, which owns British Gas, were also awarded exploration licences. All the companies are the operating partners for the blocks, in consortia with other companies including, in Centrica’s case, Russia’s Lukoil.

“This is bad for the climate, the high north and environmental management regimes,” said Frederic Hauge, leader of green NGO Bellona.

Ben Ayliffe Greenpeace’s Arctic campaigner said: “Not content with sucking their customers dry, half of the big six energy suppliers have now turned their attention to the Arctic. Customers of these companies probably didn’t realise that their rocketing bills would pay for fossil fuel exploration in a vulnerable region of breathtaking beauty, and shareholders may be concerned to learn they’re on the hook for potentially astronomical clean-up bills when the inevitable spills occur.

“Because of its remote location and the extreme conditions, an oil spill in the Arctic would be virtually impossible to clean up. On top of that the cold water makes it’s harder for the oil to degrade, meaning its stays in the environment longer. That’s why a big oil spill in the Arctic would be catastrophic – for the humans who live there and the wildlife they share it with.”

E.ON’s exploration and production’s spokesman, Kjetil Hjertvik, said: “We are, and will always be, fully compliant with the strict terms governing each license block’s usage.” E.ON is partnering with ConocoPhillips, Statoil and Petoro in developing the blocks.

According to NIMR, other blocks, including Centrica’s, should be subject to a breeding-season ban on “drilling in oil-bearing formations between 1 March and 31st August and [allow] no emissions of chemicals, cuttings and produced water”. However, a recent statement by the Norwegian Petroleum Safety Authority said some drill cuttings and drill fluid could be released.

Alan McLaughlin, at Centrica Energy, said: “We’ve only just been awarded the block so we don’t have an environmental plan to share. But before any exploration can take place, robust environment surveys are carried out to identify specific environmental sensitivities, to provide us with information on presence of vulnerable species. The exploration is then planned around these issues to reduce any risk to the environment.”

In June, Centrica spent £160m buying into Cuadrilla’s shale gas fracking operations in the UK, having written off £200m in February in abandoning its joint venture with EDF Energy to build new nuclear power stations.

In addition to the NIMR warnings, Norway’s Climate and Pollution Agency said new activity in the region would challenge the ability to cope with emergencies or oil spills and harm the large flocks of seabirds there, while Norway’s Directorate for Nature Management also advised against oil and gas activity in many of the new blocks. The Barents Sea blocks are all well within the Arctic circle but in an area mostly free of sea ice. However, the warmer waters mean many millions of fish and birds feed there.

Norway Oil Licenses

Oil exploration licences granted off Norway. Graphic: Paddy Allen for the Guardian


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