Goliat arrives in Hammerfest, poised to open new frontier in Arctic offshore oil

Dockwise Vanguard arrives in Hammerfest with Goliat FPSO on board on April 17, 2015. Photo courtesy Eni Norge.

Dockwise Vanguard arrives in Hammerfest with Goliat FPSO on board on April 17, 2015. Photo courtesy Eni Norge.

Today was a historic day for humanity on the earth’s final and last frontiers.

As the International Space Station berthed SpaceX’s Dragon this morning while floating above earth, hours earlier on the planet’s northern edge, Dockwise Vanguard arrived in Hammerfest, Norway. The celestial venture marks a milestone for public-private endeavors in space, while the Arctic venture marks a milestone for international collaboration within the sovereign space of Norway’s continental shelf.

Onboard Dockwise Vanguard, the world’s largest float-on/float-off ship – so big it could carry the Chrysler Building – is a floating production, storage, and offloading vessel (FPSO), built a hemisphere away in the Hyundai shipyard in South Korea. Once the FPSO, owned by Italian multinational oil and gas company Eni, moves into position in the Barents Sea, it will begin extracting oil from the world’s northernmost offshore field. The license for the field, also called Goliat, is 65% owned by Eni Norge and 35% by Statoil. This field is even farther north than the Prirazlomnoye field in Russia’s Pechora Sea, the first (and only other active) offshore oil field north of the Arctic Circle. Prirazlomnoye was the site of a heated encounter between Greenpeace, Gazprom, and the Russian Coast Guard. Greenpeace’s boarding of the rig resulted in the arrest and imprisonment of 28 activists and two journalists, which I discussed at length in a previous blog post.

It doesn’t seem that Goliat, however, has generated as much controversy, and I’m not sure why. Perhaps there is some sense of resignation: once the barrier of Arctic offshore oil was broken with the Russian project, turning back the tide of development may seem impossible. Yet some politicians are speaking out against Goliat. Kari Elisabeth Kaski, party secretary of of Norway’s Socialist-Left (Sosialistisk Venstreparti), declared:

“The Goliat project marks the start, but also the end, of oil operations in the Barents Sea. This is an oil field and an oil platform that are spun off from scandals.” (source: NRK, in Norwegian).

The Goliat field is estimated to hold 174 million barrels of oil. The Prirazlomnoye field, by contrast, is said to contain 610 million barrels. The Russian project is much more statist and domestically-oriented in nature than the transnational Goliat project, which involves Italian, Korean, and Norwegian companies, to name a few. Indeed, parallels could be drawn with the globalized story of MV Nunavikthe Japanese-built ship that is extracting nickel and copper concentrates from a Chinese-owned mine in northern Quebec. In contrast, Prirazlomnaya is a project as domestic as they come in this day and age. The platform was built in a Severodinsk shipyard, while Russian-built ships are transporting the oil from the Arctic offshore field to more southern destinations. 

Redefining the limits

Goliat's route. From Aftenposten.

Goliat’s route. From Aftenposten.

Dockwise Vanguard – a ship described to be “redefining the limits of exceptional marine heavy transport” – represents more than just an extension of human activity northward into the Arctic frontier. It also demonstrates the increasing scale of Arctic projects. The ship and its precious cargo – the Goliat FPSO platform – are together so large that they could not have sailed from the South Korean shipyard that built Goliat through the Northern Sea Route to Hammerfest even had it been summer, when the ice would have retreated from the Russian shipping passage. Even more mind bogglingly, the enormous ship could not even use the conventional shortcuts of either the Panama or Suez Canal due to size restrictions. Instead, the vessel had to sail 15,608 nautical miles for 63 days all the way from South Korea, around Southeast Asia and across the Indian Ocean, around the Cape of Good Hope in South Africa, and up across the North Atlantic to northern Norway.

This is just one of many voyages Dockwise Vanguard has made since 2012 transporting offshore production platforms, often built in the Far East, to distant sites of oil and gas exploration, from the Gulf of Mexico to the Arctic. The current voyage to Norway may seem very long, but the vessel can travel faster than previous ships of its ilk. This is especially important for companies who wish to extract resources at the height of a commodities boom. As an article from E&P Magazine describes, “Such a reduction in sailing time has many benefits, but the most obvious one, perhaps, is that it enables fields to be brought onstream and begin earning revenue much earlier than previously possible.” Despite Dockwise Vanguard’s speed, however, it couldn’t make up for the delays that occurred during the FPSO’s construction. These delays will cost Eni Norge and Statoil, who had wished to begin production in 2014, when oil prices were significantly higher. The breakeven price of Goliat’s production is reportedly around $95. Given today’s price of $63 for Brent crude oil, Eni Norge and Statoil may have missed their chance, at least for a while, for fat profits (although today’s price marks a 9.7% jump for the week).

CRS-6 launches into the blue yonder.

CRS-6 launches into the blue yonder with Italian coffee on board.

Italy: Driving the next frontier

Dockwise Vanguard’s voyage to Hammerfest, its most northern journey ever, epitomizes the reach of humans and their financial and technological instruments into ever more complex and distant frontiers. A massive amount of multinational collaboration by companies in countries with advanced engineering and shipping sectors, in addition to the friendly regulatory environment in Norway, has enabled the opening of the Arctic offshore frontier in the Norwegian Arctic.

Yet it could also be argued that Italy, the country that gave birth to the seminal explorer, Christopher Columbus, has driven the opening of frontiers in both space and the Arctic on this historic day. The case is pretty clear in Norway, where Eni Norge is the majority owner of the Goliat field. Yet in outer space, SpaceX’s Dragon delivered some very important cargo, too: the “ISSpresso,” an Italian espresso machine described by Forbes as a “joint venture of Italian aerospace company Argotec and Italian coffee maker Lavazza.” Astronauts can now drink hot coffee instead of a powdery mix. Without coffee – or, it seems, Italian ingenuity – how would oil companies and space companies be able to boldly go where none have gone before?

External links

Eni Norge press release of the ship’s arrival into Hammerfest (in Norwegian)

NRK has a video of the ship’s arrival into Hammerfest.

You can see the ship’s location on VesselFinder.

The Geometries of Arctic All-Weather Road Construction

Satellite imagery from Landsat 8, processing and map by Cryopolitics.

Watch construction of the Tuktoyaktuk-Inuvik All-Weather Road progress over three years from space. Imagery from Landsat-8/NASA via Google Earth Engine, processing and graphic by Cryopolitics.

2015 marks the third season of construction along the Inuvik-Tuktoyaktuk all-weather road. That means it’s possible to watch construction of the road from space unfold over a three-year period, seen in the satellite image time-lapse above. This $300 million, 140-kilometer road will permanently link Tuktoyaktuk, a hamlet on the Arctic Ocean in Canada’s Northwest Territories, with the town of Inuvik to the south – and with it, the Dempster Highway. Currently, Tuktokyaktuk is only connected by land to the rest of Canada during winter, when an ice road to Inuvik is maintained on the Mackenzie River. Once the all-weather road is complete, the ice road will no longer be maintained as Canada’s permanent road system will finally extend all the way to the Arctic Ocean. Anyone with a driver’s license will be able to drive from the Pacific to the Arctic to the Atlantic to the Great Lakes. Talk about a three-ocean road trip. As the government website boasts,

“This road, which extends the Dempster Highway to the Arctic coast, will complete Canada’s road network from coast to coast to coast. It will strengthen Canada’s Arctic presence and contribute to economic and social development in the North.”

I’ve written before that one largely unstated reason behind the road’s construction may have to do with the oil and gas deposits offshore Tuktoyaktuk, in the Mackenzie Delta. When the road was approved in 2011, oil prices were high. Now, they are so low that many Arctic oil and gas development projects have been shelved. Chevron, which holds one of the leases in the Mackenzie Delta, announced in December 2014 that it would put its plans for its EL 481 block “on hold indefinitely.”

Map_CMVR

Oil and gas licenses near Tuktoyaktuk, in the Mackenzie River Delta.

But neither the federal nor territorial government can turn their backs on the road now. In any case, Canadian sovereignty and presence in the Arctic is at stake, so progress continues. After all, the price of oil may rise again one day. If and when the day comes that oil and gas are drilled offshore in the Mackenzie Delta, oil companies will save hundreds of millions of dollars in transportation costs thanks to the road to Tuk. Local residents, meanwhile, will save a mere $1.5 million, although, as the government likes to celebrate, they’ll have improved mobility and connections to the rest of Canada. They will also benefit from the hundreds of (temporary) jobs that have been created during construction. Seen otherwise, however, this road represents the permanent encroachment of fossil-fueled development into the earth’s northernmost frontiers. Roads like this also embody both the naïveté and narcissism of humans, for the government is deigning to build the road even as Tuktoyaktuk slides downward and seaward due to melting permafrost and coastal erosion.

The strip of sovereignty-streaked asphalt continues to wind its way south, with progress going faster from the Tuktoyaktuk side than the Inuvik side due to the slightly flatter and colder conditions up north, which facilitate construction. The two ends of the road should meet somewhere in the middle by next year, with construction being completed during the 2017/2018 season. A CBC News story has more details on the difficulties and delays facing construction crews. It also has the factoid that “1.9 million cubic metres of dirt” have been moved so far during construction. Yet this number is just a bunch of zeroes unless it is compared with other projects across human history. So how does the Inuvik-Tuktoyaktuk road stack up?

  • Over 1000 years, in approximately 100 different limestone quarries, inhabitants of ancient Corinth (in present-day Greece) removed 1.9 million cubic meters of stone.
  • In two years, from 2007-2009, the Finnish port of Raahe dredged 1.9 million cubic meters of soil to create a deep-water channel and harbor.
  • Every day in 2013, China produced 2 million cubic meters of shale gas.

In other words, it took the Ancient Greeks a thousand years to move the amount of earth that has been moved in just three short winters in an extremely inhospitable environment. The exponential compression of the amount of time needed to move huge quantities of earthern material brings to mind those charts that illustrate almost every index of human development shooting up in a straight line after 1950 or so.

The 1.9 million cubic meters of gravel that have been moved near Tuktoyaktuk and Inuvik are more than just “dirt.” In a boggy, permafrost-laden tundra like the northern Northwest Territories, this material is a precious commodity. The negotiators of the Inuvialuit Final Agreement, the treaty signed in 1984 between the Canadian government and the indigenous Inuvialuit, who inhabit the area around the Mackenzie Delta, had enough foresight to include a regulation detailing the royalties that the government would pay the Inuvialuit in the case that it wanted to use some of their gravel. The Inuvialuit Settlement Region, in which the road is located, even has a Granular Resources Management Plan. The document states that the Inuvialuit and the Government of Canada both recognize the importance of the “effective use of finite gravel resources in one of the most geographically remote places in Canada.” Settlement of the royalties paid by the government for the gravel removed from Inuvialuit private lands was, in fact, one of the final obstacles that had to be cleared before road construction could begin.

Tuktoyaktuk

One road engineer to another: Where do we draw the line?

Aside from moving politically and environmentally sensitive earth, the construction crews must know how to build on top of earth that literally is moving. That’s because permafrost underlies this corner of the Northwest Territories. In the summer, the white expanses give way to a pockmarked landscape of lakes and tundra. The road is therefore being built at an elevated level slightly above the permafrost. The image above may remind some readers of the landscape in the Yamal Peninsula, where a giant crater opened up in the earth last year. Looking at the Mackenzie Delta in this satellite image, it seems impossible to determine where to begin even drawing a road in a world that looks like Swiss cheese – but somehow, the Canadian engineers have done it. Where there’s a will, there’s an all-weather way that takes into account everything above and below ground – and whose results can be seen from space. 

InuvikTukRoad

In 2017/2018, the twain shall meet.

With agreement to build world’s longest interconnector, Norway’s hydropower will light up UK homes

In six years, Norway's hydropower will begin electrifying homes in Britain. © Mia Bennett, 2008.

In six years, Norway’s hydropower will begin electrifying homes in Britain. © Mia Bennett, 2008.

Last week, the United Kingdom and Norway signed an agreement to build what will be the world’s longest interconnector from Kvilldal, in southwest Norway, to Blyth, in northeast England. Representatives from National Grid, the power grid operator in Great Britain, and Stattnett, the Norwegian electricity operator, met at the British Embassy in Oslo to sign the document, which adds to the long history of trade between Norway and England dating back at least to the Viking era. The 730-kilometer subsea cable, called the NSN Link, has a price tag of €2 billion with costs to be shared jointly between the two countries, and should be completed by 2021. According to a Stattnett press release, the cable will “connect the two countries’ electricity markets directly for the first time.” With a capacity of 1.4 gigawatts, the NSN Link will essentially allow Norway to provide an amount of electricity equal to 14 percent of British household consumption. The interconnector will also be two ways, meaning that although the majority of the time Norway will be exporting electricity to Britain, sometimes, the UK will be able to send electricity eastward when production exceeds demand.

Both countries touted the interconnector’s promotion of green energy. 96.1 percent of Norway’s electricity is produced by hydropower, which is a renewable form of energy. The remaining 3.9 percent comes from thermal and wind production (source: SSB). Norway’s rugged landscape makes it a topographically perfect candidate for hydropower development thanks to its jagged mountains and rushing rivers. Climate change, too, is also benefiting hydropower generation. Unlike in some parts of the world such as California, which is facing extreme drought, Norway is getting wetter. More rain means more water to power dam turbines. All of this, then, makes it seem like hydropower has found its ideal home – except, of course, for that nagging issue: people, often indigenous, sometimes oppose damming their rivers and flooding their valleys for the sole purpose of creating electricity to power homes and industries in other countries.

In the late 1970s and early 1980s, controversy swirled over a proposed hydropower project in the Norwegian Arctic. The Norwegian Water Resources and Energy Directorate announced plans to build a dam and reservoir along the Alta River in Finnmark that would completely flood the upstream village of Mazé belonging to the indigenous Sami people. Hunger strikes, mass protests, numerous arrests, and court battles ensued. Underscoring the sheer determination of the state to see this project through, the government allegedly had planned to use 200 soldiers against the demonstrators if things got out of hand. But by 1982, the battle was over. The Norwegian Supreme Court ruled that the government could go ahead with building its dam. Although the Sami lost in their battle to halt construction, they did manage to alter the plans such that their village would not be flooded. They also raised their profile nationally and internationally. Some have argued that the Alta controversy helped spark a process that culminated in increased recognition of Sami rights with the 2005 Finnmark Act. However, Gregg Bucken-Knapp, a professor of political science at the University of Gothenburg, contends in his book that the Norwegian government still has a monopoly over the Sami and that nothing can really stop the state in its quest to increase economic development whether through oil and gas extraction or hydropower generation.

Norway: A “green battery” for Europe?

With the ongoing development of interconnectors from Norway to Britain and continental Europe, Norway is well on its way to becoming a “green battery” for Europe, as termed by academic Anne Therese Gullberg in an article in Energy Policy. An interconnector already exists between Norway and the Netherlands. A future 623-kilometer interconnector will run from Tonstad, in southwest Norway, to Wilster in northwest Germany. The Nordlink cable will be the first to intertwine Norwegian and Germany energy markets and is “a cornerstone of the realisation of the energy transition (Energiewende) in Germany,” according to Tennet, the German electricity grid operator. With increasing demand for green energy due to a European Union directive, hydropower in Norway is on the up and up. Production in Norway may increase by 12 percent annually through 2020 both to upgrades to existing hydropower plants and the construction of new ones, according to Bloomberg.

Farther afield in countries too distant to be connected to Norway via an interconnector, the Arctic nation has exported its hydro-engineering expertise and provided funding to projects in South American and Asia. Statkraft, the country’s top hydroelectric power company, also owns hydropower plants in Sweden, Finland, Germany, Wales, and Turkey. I once took a 21-hour train trip across Turkey from Kayseri to Kars, and the amount of dams I saw was unbelievable. A drive in eastern Turkey from Kars to Hopa, on the border with Georgia, revealed even more dams under construction. I’m not sure if Statkraft is specifically funding any of the projects I saw, but these are at the very least a harbinger of things to come in Turkey, which has the fastest growing electricity market in Europe.

A dam seen from the train between Kayseri and Kars. © Mia Bennett, 2013.

A dam seen from the train between Kayseri and Kars. © Mia Bennett, 2013.

turkeydam

A dam in Turkey seen from the road between Kars and Hopa, Turkey. © Mia Bennett, 2013.

Perhaps most damningly, although Norway is the biggest donor to the Amazon Fund, Norwegian companies have also invested in the controversial development of hydropower projects in Brazil to provide energy for aluminum smelting. While no future hydropower plants appear to be on deck right now in the Norwegian Arctic, instead, the country is using its expertise and capital to fund destruction in other sensitive areas of the world. There are some positive relationships evolving between the Arctic and the rest of the world, though. Last year, an anti-dam coalition from Malaysia, where 12 dams are planned in the state of Sarawak on Borneo, traveled to the Alta Dam. This visit built links between Norwegian and Malaysian indigenous peoples on how to challenge, or at the very least negotiate, with the state on hydropower projects.

So although hydropower creates less carbon emissions than burning coal, oil, or gas, to paint it as completely environmentally friendly is misleading. Hydropower causes the eviction of people from their homes, often those least able to defend their rights against the state, such as indigenous peoples. It fragments habitats for plants and animals. And it drastically changes the quality of the river flow, and therefore the environment, both up and downstream. Some dams are so large that in the case of the Three Gorges Dam in China, the earth’s gravitational field has shifted slightly and crustal deformation has changed in the area.

The future of hydropower and interconnectors in the Arctic

A map from Prowse et. al. (2011) illustrating the major hydroelectric power stations in the Arctic that are located on rivers that tend to have significant amounts of ice. 

A map from Prowse et. al. (2011) illustrating the major hydroelectric power stations in the Arctic that are located on rivers that tend to have significant amounts of ice.

With its glaciers, mountains, and rivers, a good deal of the Arctic seems well-suited for this nominally green form of electricity generation. As the map above shows, Norway has by far the largest number of hydroelectric power installations of any country in the Arctic, although Russia and Canada have more powerful ones. It’s therefore no surprise that a presentation I came across on the future potential and challenges of hydropower in the Arctic was put together by academics at the Norwegian University of Science and Technology, highlighting the dominance of Norwegian expertise in this area. According to the presentation, the main challenges to installing hydropower plants in the Arctic are the difficult construction conditions, ice, which can clog up reservoirs, and, of course, the sheer distances across which electricity would have to be transported. While oil can be put into barrels or gas into tankers, electricity is not so easy to store and transport. That’s why it’s either put into energy-intensive products like aluminum that are more easily shipped out or sent through interconnectors when possible.

In those parts of the Arctic that are closer to the world’s big markets, interconnectors could provide a solution for transporting electricity generated via hydropower. Aside from Norway, the most obvious candidate for building an interconnector that could channel Arctic hydropower to more southerly destinations is Iceland. This North Atlantic island has a superficially similar topography to Norway: mountains, glaciers, and steep elevation changes. For years, plans have been underway to build IceLink, which would be a 1,000-kilometer cable between Iceland and Britain, far outstripping the NSN Link between Norway and England in length. Yet the costs are huge, and hydropower in Iceland is controversial. The growth of the hydropower industry is directly correlated to the rise of aluminum smelting in Iceland (aluminum is now the country’s top export, ahead of fish). This trend has generated firestorms of protest, most memorably with the Karahnjukar hydropower plant and associated aluminum smelter in eastern Iceland. The Icelandic documentary Dreamland (trailer with English subtitles below) tells the story of how the rules were bent in order for it to be built. It’s easy for British people to cheer the development of interconnectors that will bring clean energy to their homes and help them to reduce their carbon emissions. But the costs of hydropower generation to the people and environment living where these dams are being built, whether in the Arctic, the tropics, or elsewhere, should be weighed, too.