With growing concerns of climate change and the environmental impact of drilling operations, governmental policies are continuing to shift towards encouraging the use of renewable energy. Although such policies may impact production later on, the market continues to dictate and encourage oil exploration, even in high-cost areas such as the Arctic.
For now, oil companies have a variety of reasons to justify the cost. For instance, global demand is continuing to grow, prices may eventually rise again, and costs of operations will likely decrease as emerging technologies become more commonplace.
According to Erik Milito, director of Upstream and Industry Operations for the American Petroleum Institute, “…That’s the reason why companies are making these investments, because they’re long-term investments in projects that are expected to provide very large quantities of oil and natural gas for the U.S. economy and for the global economy.” In the meantime, U.S. producers are keeping a close watch on their foreign competitors that are able to produce oil at a lower price.There are some interesting points raised. FYI.