Greenland prepares for foreign drilling
A general view shows the Artic Ocean off the coast of Greenland.
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STEVE CHIOTAKIS: New technology and climate change have made it easier to drill for oil deep off the icy coast of Greenland. The country is planning to award permits to oil companies soon.
But it wants something from them first. From the Sustainability Desk, Marketplace's Eve Troeh reports.
EVE TROEH: A dozen oil companies applied to drill off of Greenland. BP was one of them, but it pulled out after the Gulf of Mexico spill. And that spill got Greenland thinking, "We need to protect ourselves from foreign oil companies."
GILBERT METCALF: And if they have an accident and go away it may be difficult for Greenland to come after them.
That's energy economist Gilbert Metcalf. Any company that gets a license in Greenland now has to put up $2 billion to pay for cleanup if there's an accident. That's a first, says Metcalf, and Greenland is risky.
METCALF: You've got winds over 200 miles an hour up there -- Ice berg alley, a risk to ships that are taking oil out of the area as well as rigs.
The fee isn't likely to scare off oil companies, says economist Phil Verleger. Though it might change how much of the profits they're willing to share.
PHIL VERLEGER: Companies may offer a lower royalty if Greenland's going to hold onto that $2 billion.
Those companies need years just to prepare to drill. And Greenland will hold onto all that money in the meantime.
I'm Eve Troeh, for Marketplace.