Collaboration: Key to Arctic Development

1. Collaboration: Key to Arctic Development Submitted for NRG Battle: The Arctic By: William Harry Ongseputra

2. Rising fuel consumption needs to be met with increasing production. Source: U.S. Energy Information Administration. Short Term Energy Outlook: October 2013

3. While conventional oil is depleting as soon as year 2025

4. Arctic Development holds key to sustained energy production “The Arctic is estimated to hold roughly 13% of the world’s undiscovered oil reserves and as much as 30% of the world’s undiscovered natural gas reserves.” Source: Ernst & Young calculations, http://www.drillingcontractor.org/report-cost-lack-of-infrastructure-present-challenges-to-arctic-development-20754

5. Yet even oil superpowers are powerless in the Arctic trying to conquer it alone Suspended arctic projects: (*list not exhaustive)

6. Existing industry associations can help build collaboration CURRENT Role of associations: • Knowledge sharing (SPE, OGP, IADC) • Sharing between oil producers/service companies to increase capabilities for efficiency and safety • Self-Regulation (API, ISO) • Imposing standards, procedures, and equipment safety to any given producer/service companies based on industry best practice and regulatory requirements

7. And the degree of collaboration should be improved FUTURE Role of associations: (proposed added functions marked in blue) • Knowledge sharing (SPE, OGP, IADC) • Sharing between oil and gas producers/service companies to increase capabilities for efficiency and safety • Sharing to other stakeholders (Governments, NGOs, inter-government bodies) to establish confidence for safe and sustainable arctic drilling practice • Self-Regulation (API, ISO) • Impose standards, procedures, and equipment safety to any given producer/service companies based on industry best practice and regulatory requirements • Work actively with regulatory bodies (governments & inter-governments). Include experts from regulatory bodies on the team to design safety and sustainability practices as industry standard • Resource Sharing (Existing/new industry association) • Pool resources from stakeholders (oil and gas producers/service companies, governments of arctic countries, government of countries with interest, other parties of interest) to do research on sustainable arctic development and develop new technologies, capabilities, and practices to be shared across industry stakeholders. This research is required to uncover unknown variables involved in arctic development.

8. Closer collaboration will reduce wasted resources and risk Industry Standards & Procedures

9. Summary • Global energy demand is increasing and conventional supply can hardly keep up • The Arctic is a significant source to help meet demand, making arctic development inevitable • Arctic challenges are technical and non-technical. Oil and gas giants repeatedly come and fail after spending significant dollars. • Collaboration holds key to arctic development and the infrastructure exists through industry associations • Degree of collaboration should be improved to handle arctic challenges. All parties should be jointly responsible to establish standards that are tried, tested, and work in arctic environment.