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RENEE MONTAGNE, Host:

The frontiers of oil exploration include the waters north of Alaska.

(SOUNDBITE OF WAVES)

MONTAGNE: Nobody knows how much energy is hidden beneath the Arctic waves, but oil companies want to find out. We're tracking their efforts as our series, Climate Connections with National Geographic, explores the changing Arctic business climate.

STEVE INSKEEP, Host:

That business includes a plan by Royal Dutch Shell. A federal court blocked its proposal to drill for oil in the Beaufort Sea, above Alaska's northern coast. But the company is still trying. And its story tells you a lot about the forces shaping the Arctic's future.

This summer, Shell assembled an entire fleet in an Alaskan harbor.

Unidentified Woman: (Unintelligible)

INSKEEP: Crews were performing maintenance on this drill ship. It carries an oil derrick 190 feet high. That means it steams around with a tower taller than the Statue of Liberty - from its toes to its torch.

VINCE ROES: This is the Frontier Discoverer. I would call it the state-of-the-art drilling rig. One of the very few that are capable of working in the Arctic today.

INSKEEP: Vince Roes works on the Frontier Discoverer, which has a reinforced hull.

ROES: This whole section, which is, I guess, about six feet on either side of the ship, was added to give it the ice strengthening capability that we need to operate on the Beaufort.

INSKEEP: Shell knows the Beaufort Sea because this same company found oil in the same place two decades ago. The people doing the drilling then included Rick Fox, who now leads Shell's Alaska operation. He sat down to talk after strolling across the deck of the drill ship.

RICK FOX: I remember as a young man, standing out there and watching all the crystals of ice in the air when the sun was out, and it was just like a, you know, zillions of lights, and dry, cold. I remember how peaceful it was, you know, just at times it was so still and quiet, especially when there was ice on the water. It is an amazing place. It is an amazing place.

INSKEEP: Shell concluded the opportunity wasn't amazing enough, and it never exploited the offshore oil that it found years ago.

Today, the technology is better, the price of oil is higher, new oil reserves are less available, and Shell has reconsidered the Alaskan Arctic.

FOX: We thinks a great frontier, partly because it's - the belief is that about 25 percent of the world's remaining reserves are in the Arctic. And, you know, I think it's a major play for us.

INSKEEP: Even the climate seemed to be cooperating with that major play. Polar ice retreated this summer, from the spot where Shell plans to explore for oil. Shell would hardly need its reinforced hulls, or rented Russian icebreakers - which brings to mind a cartoon reprinted last month in the Anchorage Daily News. A man stands on an oil platform in Arctic waters. Now that fossil fuel use has melted the ice cap, he says, we can drill for more fossil fuel.

When Shell's Rick Fox spotted that cartoon, he laughed and showed it to a colleague.

FOX: You know, we were out working on the ice this past winter. Maybe there is a trend to less and less ice, but you still have years when - I was 15 miles offshore on a snow machine - and it was some big ice.

INSKEEP: The Shell manager does acknowledge that Arctic summers are getting longer. Oil company ships have more time to explore before the winter ice returns. But remember, Shell did not get to drill this summer. The effects of climate change are more complicated than they might seem.

DEBORAH WILLIAMS: The melting of the Arctic icecap presents additional problems.

INSKEEP: That's Deborah Williams, who leads a group called Alaska Conservation Solutions.

WILLIAMS: You will have greater storms. You will have more conflict with endangered species. And you will have more conflict, I believe, with the people of the north - particularly the Inupiat people - who are already facing hardships associated with global warming and the melting of the Arctic icecap.

INSKEEP: She mentioned conflicts with local people and animals. Both those conflicts help to explain why Shell's fleet did not reach the Beaufort Sea. It was blocked by a creature that Rick Fox noticed when he was drilling in that sea years ago.

FOX: I remember seeing whales as well, and the beauty of that animal just passing through that clear, clear blue water.

INSKEEP: Local people have hunted those whales for centuries. Whaling captains joined a lawsuit seeking to prevent Shell's drilling. A court stopped all activity while deciding if it should order a full environmental study.

Now, it was by no means a given that local people would oppose an oil project. Many take a pragmatic approach to the industry, as you could see at a picnic in Barrow, Alaska.

Woman: That was the last of the door prices.

INSKEEP: The picnic was sponsored by B.P., which is one of the major oil companies here. The door prices included 30 gallons of gasoline. B.P. was celebrating 30 years of the Trans-Alaska pipeline, which brought jobs and money to this region.

Woman: Everybody says thanks to B.P.

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Woman: Thank you very much for coming.

INSKEEP: Yet, when Shell proposed offshore drilling, the local government joined the lawsuit against it. One of their lawyers says drilling noise or an oil spill could harm whales already stressed by global warming. You would sense the ambivalence of some Alaskans when you meet Ron Brower - he's a tribal elder who was greeted at the picnic by an oil company vice president.

OIL COMPANY VICE PRESIDENT: Ok. How about some ribs?

BROWER: Oh, ribs. That sounds great.

COMPANY VICE PRESIDENT: Allrighty.

INSKEEP: Brower has actually done work for a Shell contractor, yet he says the climate is changing too rapidly to understand the possible problems with offshore drilling.

BROWER: Any oil spill would be disastrous to our natural food resources in the Arctic.

INSKEEP: Shell has never stopped working to ease concerns like this. The company even ordered construction of a special ship.

(SOUNDBITE OF TELEPHONE CONVERSATION)

INSKEEP: Crew members would stand by on this high-tech bridge, or control center, waiting to clean any spill. Shell staffed that ship by hiring Alaskans, including Roland Rufus Iqtakluk Warrior. He's a whale hunter himself, and he says his neighbors oppose offshore drilling.

ROLAND RUFUS IQTAKLUK WARRIOR: I just don't want it to happen, don't want to comprise our hunting grounds.

INSKEEP: Did that put you on a strange position because your employed here - you're part of this operation, if it ever happens?

RUFUS IQTAKLUK WARRIOR: The way I see it, unemployed I am in a position of hear and see what's happening, and be able to bring up concerns from where I come from.

INSKEEP: He's telling his employers about the importance of whale hunting. He's had time since the federal court order left Shell's clean-up crew waiting at anchor.

That same order left Shell's Rick Fox trying to figure out the next step.

FOX: I am somewhat - I'm disappointed with the way this is turning out so far and hopeful that we'll still find resolution because we're absolutely still in the conversation.

INSKEEP: Shell remains eager to explore Arctic waters. And in this, it's not alone. There's not exactly a rush for Arctic oil - not yet. But from Canada to Norway to Russia, companies are buying leases, or even starting to drill for the wealth of the changing Arctic.

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INSKEEP: Our reports on the Arctic's changing business climate were produced by Tracy Wahl. You can find photos of the Shell drilling at npr.org, and you can find more on climate change on public TV's "Wild Chronicles."

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