Major oil and gas companies have several challenges to face when it comes to operating in the Arctic. Won Ho Lee and Piotr Szalewski, both DNV GL principal engineers, discussed some of these challenges at the company’s annual Technology Week last month.
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Won Ho Lee led the discussion of challenges in the Arctic. |
According to DNV GL, although exploration has been ongoing for the past 40 years, conditions are difficult and companies are vulnerable due to a shortage of scientific data and knowledge. In addition, since there has been little offshore activity, new operations would face serious challenges including harsh weather conditions, short drilling seasons, environmental risks and an evolving regulatory framework.
Lee says that in addition, industrial development and local politics mean that what works in one area may not work in another.
Based on the geological estimation of the area’s mostly unexplored regions, the US Geological Survey’s assessment of mineral resources says that the Arctic may contain 13% of the world’s undiscovered oil and 30% of its undiscovered gas.
The majority of undiscovered oil and gas is thought to be in Alaska.
DNV GL believes that society, the industry as a whole, and authorities must gain a better understanding of the risks involved in the Arctic in order to make better decisions about future development.
“The Arctic is very diverse and there’s lots of different interests and agendas from industry, government, non-governmental organizations and the public at large,” says DNV GL President Knut Obreck Nilssen. “We need sufficient knowledge and technology before we can enter into difficult operations in this area.”
Seasonal and location risks
Lee says that DNV GL’s safety and operability index provides a better view of the Arctic’s ever-changing levels of risk. He says that research has shown that in the summer months, the risk is higher off the northwest and northeast of Greenland than it is in the Barents Sea winter.
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Safety & operability map for January. From DNV GL. |
Launched in August 2014 during the Offshore Northern Seas (ONS) conference in Stavanger, DNV GL’s Arctic risk maps show variations in risks in relation to safety and operability in the same location in different seasons. It aims to provide stakeholder with a comprehensive tool for decision-making and transparent communications.
Lee says that even summer can bring severe operational challenges, naming the northern part of Baffin Bay, the central Arctic Ocean, and northwest and northeast of Greenland, as home to some of the most challenging conditions. Since the seasons change from year to year, he explained by way of example, there may be some overlap of operations and the melting of ice that can cause conflict.
Lee focused on the Kara, Chukchi and Beaufort seas during his discussion, which are most likely to hold significant oil deposits and all have a safety and operability index of “Severe Arctic Conditions” for several months of the year.
The Barents Sea has the lowest safety and operability index. Lee referred to the January map that shows even in winter the southern part of the Barents Sea rates as the lowest overall risk area, with conditions comparable to the Norwegian Sea.
Lee says the Arctic’s seasonal changes are more severe than anywhere else in the world and the environmental changes differ from season to season, and from year to year.
Environmental risks
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Safety & operability map for July. From DNV GL. |
Several environmental risks to the region’s diverse ecosystems come in to play due to the Arctic’s harsh climate and remote nature, which results in specific adaptations and characteristics of Arctic species and ecosystems. The large variations in climate, species distribution, and human activity influence the environmental risk picture in the Arctic.
DNV GL’s analysis shows that the region’s environment is at its most vulnerable in the summer, when industrial activity collides with important life stages for the Arctic’s inhabitants.
For example, oil companies may operate in the same summer months that locals use to hunt for whale meat, a cultural tradition. He says that cooperation is needed from the oil companies and the local hunters to avoid these conflicts. Many species travel long distances to feed or breed and gather in large colonies at locations with ample food supply, which makes them vulnerable to an oil spill. Should a single oil spill occur, it could influence a large part of the population.
The risk maps shows an overlap between environmental vulnerability and movement of shipping vessels that use heavy fuel oil (HFO). HFO spills are one of the main risks to the Arctic environment.
Vessel operation risks
Szalewski discussed vessel operations, which pose another potential risk for oil and gas companies in the Arctic.
Vessels operating in cold conditions like those found in the Arctic may encounter a variety of hazards including: icing of systems and equipment; liquids in tanks and pipes freezing; large loads and impacts from heavy ice conditions; and drifting icebergs and growlers.
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Ice on vessel operating in harsh conditions. From DNV GL. |
According to DNV GL, appropriate dimensioning methods are needed to ensure vessels have the necessary structural integrity, as is winterization, which prepares the ship for extreme icing, freezing systems and wind chill.
Selecting the proper materials during the vessel’s build is one of the most effective methods to keep a vessel safe in such harsh conditions, Szalewski says, noting that the process was also important because it allows for the assessment of candidate materials to meet functional requirements. There are several considerations in choosing the materials used including: consequences of failure, degree of redundancy, presence of stress concentrations, accuracy of analytical stress predictability, susceptibility to fatigue actions, electrolytic (galvanic) corrosion, and minimum water and/or air temperature.
In turn, he explains that new and improved material grades need to be developed, in particular welding procedures and consumables. In addition, painting and coating systems for insulation and corrosion protection need to be developed for cold climate applications.
Szalewski went on to say that the oil and gas industry is looking for recommendations and guidelines for material selection and design for low operating temperatures. Currently, there are limited recommendations in current design rules and limited field experience from installations in cold climate regions.
DNV GL is working in cooperation with Aker Arctic to present a concept ship for operation in 2030 that is safer, greener and more practical than carriers currently in use.
Future operations
Lee says that there are no Arctic regulations as of yet, but there is a draft undergoing an interagency review process between the Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) to develop a proposed Arctic drilling rule.
Many questions remain about the region, one of the last frontier areas left. Safety levels are hampered by a shortage of scientific data and knowledge; however, acquiring that data requires operating in the Arctic.
“In my opinion, only a combination of public and private sector knowledge, expertise and investment will make it possible to do development in the Arctic at the highest possible level,” says Fran Ulmer, US Arctic research commission chair.
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