Drilling of Arctic Could Pose Ecological Risks, Lloyd’s Report Warns

A new report by Lloyd’s of London, the world’s largest specialist insurance market, warns that rapid development of Arctic oil resources threatens to cause huge ecological damage without strict oversight and appropriate risk management. The report, Arctic Opening: Opportunity and Risk in the High North, projects that as much as $100 billion ((£63 billion) will be invested in the Arctic region over the next decade as the melting of sea ice opens up vast areas to oil and gas exploration and creates new shipping routes. And while this phenomenon will create significant business opportunities, the report says it is “highly likely” that it will also further disturb ecosystems already stressed by climate change and create risks associated with oil spills, particularly in ice-covered areas. “The resilience of the Arctic’s ecosystems in terms of withstanding risk events is weak, and political sensitivity to a disaster is high,” a summary of the report on the Lloyd’s Web site says. “As a result, companies operating in the Arctic face significant reputational risk.”