Measuring risk is the core business of Lloyd’s of London, the global specialist insurance market, so when it sounds the alarm about investment in Arctic oil, someone should be listening.
This is what Lloyd’s warns: "The environmental consequences of disasters in the Arctic are likely to be worse than in other regions."
The insurers say that "Arctic conditions will remain challenging and often unpredictable” and “at the same time, the resilience of the Arctic’s ecosystems to withstand risk events is weak, and political and corporate sensitivity to a disaster is high."
Along the same lines, the American Society for Progress has analysed what would happen if there were a similar explosion in the Arctic to the Deepwater Horizon disaster in the Gulf of Mexico.
They warn that the kinds of resources and facilities mobilised in the Gulf simply don't exist in the Arctic. Trained personnel, coastguard stations, icebreaking vessels, supply lines, developed ports and airports, the absence of paved roads – all would make it impossible to respond to a large-scale emergency.
Six hundred scientists from around the world wrote to Obama calling on him not to approve any drilling in the Arctic until there are technologies to deal with a spill. Their appeal fell on deaf ears.
But in spite of all these concerns, the Obama administration is giving in to pressure from oil interests to permit drilling and other governments too are pushing ahead with development.
For the Russian government of Vladimir Putin the melting of the ice caps represents an economic opportunity, not an environmental disaster. Russia signed a $7.9bn deal with BP last year, and Exxon Mobil and Chevron are also expected to be drilling off Greenland soon. Norway has temporarily rejected plans for drilling north of the Arctic circle. but will increase production in the Baring Sea.
A recent report from the US Energy Information Administration found that “studies on the economics of onshore oil and natural gas projects in Arctic Alaska estimate costs to develop reserves in the region can be 50 to 100 percent more than similar projects undertaken in Texas".
But not if the corporations only talk about safeguards, and don't really implement them. Not if it's all a big fraud and covered up by government safety agencies as happened in the Gulf. And not if the taxpayer comes riding to the rescue with big fat subsidies!
Putin has announced a new regime of tax breaks and VAT exemptions for oil giants drilling in the Arctic, reports the Financial Times.
It's easy to see why the corporations and their client governments are so desperate to ignore the risks and get on with it. Arctic oil could account for 30% of undiscovered gas and 13% of undiscovered oil. So “drill baby, drill” and damn the consequences.
Political leaders have a strange relationship to reality - you could call it Platonic. Plato said that all ideas are perfect – it is only concrete things that are imperfect. Governments take all their ideas about the nature of the world from the corporations and they don't let reality impinge too much until it's too late.
Eyeless shrimps and fish with tumours presented to horrified delegates at the annual Tulane environmental law conference in New Orleans, show that the long-term effects of the Gulf oil spill are far from over. But it took only months for the Obama administration to make peace with big oil and declare the effects not too bad, overall. Politicians, with their short-term memories, may have forgotten the 1989 Exxon Valdez spill, but a whole area of Alaska now has a permanently changed eco-system as a result of it.
We need to do our own big risk assessment and recognise that leaving decisions about fossil fuel production to governments well past their use-by date, with a memory span of weeks, and corporations committed to absolutely nothing but shareholder profit, is sheer madness.