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This note outlines several examples of how previously inaccessible sources of hydrocarbons are now starting to be exploited. It covers deepwater drilling, drilling in the Arctic Circle, and potential future exploitation of methane hydrates (there is a separate note on shale gas). The UK offshore regulatory regime is probably second only to the Norwegian system. However, as exploration moves to increasingly fragile ecosystems and difficult environments, the European Commission is seeking a role in regulating offshore activity in the North Sea. The Environmental Audit Select Committee has just called for a moratorium on Arctic drilling until regulatory regimes are improved. Lloyd's/Chatham House have highlighted the potential for increased exploration in the Arctic as sea ice retreats and oil prices rise.

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