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The OPEC Deal: Here Are The Details

The OPEC Deal: Here Are The Details

Oil prices continued to surge…

Global Energy Advisory December 2nd, 2016

Global Energy Advisory December 2nd, 2016

The successful OPEC production cut…

Environmentalists Furious Over Latest Shell Arctic Drilling Permit

Environmentalists are furious that the Obama administration has given conditional approval to Royal Dutch Shell’s plans to explore for oil and gas in the Arctic Ocean, given its troubled history in the region.

The U.S. Interior Department said May 11 that Shell may resume its work in the American sector of the Chuckchi Sea north of the Bering Strait that separates Alaska and Russia. But the agency said the work, scheduled to begin this summer, can’t proceed until the company earns several federal permits.

Curtis Smith, a spokesman for the Anglo-Dutch company, said Shell expects those permits will be issued fairly soon. “We’d like to see them sooner rather than later,” he said. “We’re moving assets and people as if we’re going to achieve those permits. We have reason to believe we will.”

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Abigail Ross Hopper, director of Interior’s Bureau of Ocean Energy Management, said in a statement that its decision was carefully considered. “We have taken a thoughtful approach to carefully considering potential exploration in the Chukchi Sea, recognizing the significant environmental, social and ecological resources in the region,” she said.

Environmental groups denounced the decision, given Shell’s previous Arctic performance. They include the Alaska Wilderness League, the Natural Resources Defense Council and Oceania.

They note that in 2012 Shell was granted a similar exploration permit but faced several procedural and safety problems that led to two of its drilling rigs having to be towed to safety. At the time, Interior criticized Shell’s management for improper supervision of contractors and said it couldn’t resume work there until the problems had been resolved.

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“Once again, our government has rushed to approve risky and ill-conceived exploration in one of the most remote and important places on Earth,” said Susan Murray, a vice president of Oceana. “Shell has not shown that it is prepared to operate responsibly in the Arctic Ocean, and neither the company nor our government has been willing to fully and fairly evaluate the risks of Shell’s proposal.”

Both supporters and opponents of Shell’s venture agree that Chukchi Sea is an extremely risky area for drilling. It is hundreds of miles from onshore clean-up and rescue crews needed in the event of an emergency, and the nearest Coast Guard station is more than 1,000 miles away. The region is also beset with huge storms and extremely choppy waters, even in the summer.

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Environmentalists also argue that the sea is a key feeding area and migration route for threatened marine mammals such as walruses and bowhead whales.

If awarded the necessary permits, Shell says it will spend $1 billion in this summer’s Arctic project on top of the $6 billion it’s already spent on exploration drilling offshore Alaska in the past eight years. Its only reasonably successful drilling attempt since 2007 was the ill-fated 2012 venture when it managed to drill two wells before the project had to be abandoned.

This summer, Shell plans to use two drilling vessels at the same time to explore about 70 miles from the village of Wainwright on Alaska’s northwestern coast. The probing will take place in an area where the sea is 140 feet deep.

By Andy Tully of Oilprice.com

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