Alaska Hunts Oil as Arctic Damage Shows Most Change From Climate
By John Lippert
When Jerry Otto started hunting for Alaskan oil in 1980, his tractor-trailers barreled along ice roads as much as 10 feet thick for 180 days every year.
Last winter, when he set out to drill 80 miles south of the Arctic Ocean for Australia’s Linc Energy Ltd. (LNC), regulators opened the roads for 126 days. The rest of the time, warm weather left the routes too mushy for vehicles, Bloomberg Markets magazine will report in its November issue.
Then in January, in a twist that embodies the perplexing reality of life and commerce amid a changing global climate, the temperature dropped suddenly to minus 40 degrees Fahrenheit (minus 40 degrees Celsius), encasing drilling-rig components in ice as Otto waited for roads to solidify to ship the gear to Linc sites.
After thawing the equipment with blowtorches, he discovered that the cold was decreasing oil flowing into Linc’s well. With 200 workers standing by, the company lost $300,000 a day with each delay, ending 2012 with a $61 million deficit.
Otto plans to try again in December, this time drilling sideways into a hill to get underneath 1,000 feet (300 meters) of permafrost and up into reservoirs he says hold 1.2 billion barrels of light, sweet crude.
“It’s getting more unpredictable,” says Otto, 59, who runs Brisbane-based Linc’s drilling rig in Umiat, Alaska, which is within the National Petroleum Reserve that President Warren G. Harding created in 1923 to guarantee oil for the Navy.
“We’re in a race against Mother Nature. If we don’t get cold weather early enough, or if it gets too warm too fast in the spring, it could stall the project.”
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