By Nina Chestney
LONDON (Reuters) - The "reckless gold rush" of oil and gas exploration in the Arctic should stop until stronger safeguards against spills are introduced, a UK Parliament committee said on Thursday, just days after Shell put a drilling project on hold.
The report by the Environmental Audit Committee, made up of UK Members of Parliament, called for a halt to drilling until a pan-Arctic oil spill response standard is put in place.
It recommended that a stricter regime be introduced to make companies financially liable for any clean-up costs if a spill should occur.
"We are witnessing a reckless gold rush in this pristine wilderness as big companies and governments make a grab for the world's last untapped oil and gas reserves," said Joan Walley, chairwoman of the committee.
"Oil companies should come clean and admit that dealing with an oil spill in the icy extremes of the Arctic would be exceptionally difficult."
Currently, the infrastructure to mount a large clean-up operation in the event of a spill is not in place and response techniques have not been proven to work in such severe conditions, she added.
A Foreign Commonwealth Office spokeswoman told Reuters the government welcomed the report and was considering its findings.
CLIMATE CONCERNS
It is estimated that the Arctic holds 30 percent of the world's undiscovered gas and 13 percent of undiscovered oil. Investment from the oil, gas, mining and shipping sectors could reach $100 billion or more in the next decade.
However, the commercial viability of exploration in such a remote environment is unknown and huge risks remain as firms face huge costs from complying with safety standards, developing technology, transport and insurance.
This week, Shell gave up hope of striking oil this year in the Arctic but said it will drill wells before the ice closes in in preparation for a search next year.
BP has indefinitely suspended a $1.5 billion offshore oil project in Alaska due to the cost and technical setbacks, while the Shtockman consortium mothballed a plan to exploit a huge gas field in the Russian Barents Sea.
The committee said concerns about climate change should also limit any new oil and gas drilling in the Arctic. It called for an internationally recognized environmental sanctuary to be established in at least part of the region.
It also accused the UK government of failing to show how future gas and oil extraction from the Arctic could be in line with its commitment to limit global average temperature rise to below 2 degrees Celsius this century, a threshold widely viewed as avoiding the worse effects of climate change.
This month, Arctic sea ice reached its lowest level since satellite records began and could vanish in summertime as early as 2015, some scientists have warned.
On Tuesday, experts said pollution in the Arctic from shipping and oil and gas industries could accelerate the thaw.
(Editing by Hugh Lawson)
