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Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

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Big Oil 1 - 0 Environment: Shell Granted Permit to Work off Alaskan Coast

Big Oil 1 - 0 Environment: Shell Granted Permit to Work off Alaskan Coast

Environmental groups concerned about the potential damage to the Arctic environment suffered another blow after the U.S. Environmental Protection Agency granted a temporary air permit for Shell to work off the coast of Alaska. The company has already asked federal regulators to extend the drilling season in the Chuckchi Sea because its feels ice would remain at bay into late fall. Groups like Greenpeace have staged high-profile demonstrations in an effort to highlight their growing concern about the industry's move toward arctic waters. With millions of barrels of oil potentially lying beneath the ice, environmentalists may lose out to national energy security interests.

Actress Lucy Lawless in February was arrested after her and six other Greenpeace activists scaled the 174-foot drilling tower of the Noble Discovery drillship as it sat in a New Zealand port. Groups like hers have expressed concern that an event like the Deepwater Horizon accident in 2010 would cause irreversible harm to the pristine arctic environment. Nearly six months to the date, however, the drillship left its port in Dutch Harbor, Alaska, unimpeded on its way to the frigid waters of the Chuckchi Sea.

Shell spent more than $4.5 billion on its program in Alaska, dolling out some $2.1 billion in 2008 to acquire the licenses to operate in the Chuckchi Sea, an expanse situated between Alaska and the eastern frontier of Russia. The company states that its oil-spill response capability in the region is "unprecedented" and unique to the industry. "No other company" has the onsite response systems in place that Shell does, it says. In terms of its track record, the company states that during the 10-year period ending in 2006, only around 2 barrels out of 73 million barrels were spilled during operations in nearby Sakhalin Island.

With global weather patterns changing, Shell called on the U.S. Bureau of Ocean Energy Management to extend the amount of time it's allowed to work in the Chuckchi Sea by 18 days. The BOEM calls on Shell to suspend its operations into known hydrocarbon plays by Sept. 24 because of the threat posed by reforming sea ice. Last week, however, the National Snow and Ice Data Center reported that sea-ice cover further north in the Arctic Ocean broke the 2007 record low for the year and Shell says that trend is in part reason to extend the drilling season.

The U.S. Interior Department estimates there are more than 15 million barrels of recoverable oil in the Chukchi Sea. That's more than six times the amount of oil in the Eagle Ford shale play in Texas, one of the more active drilling sites onshore in the United States.

Environmental activists concerned about arctic oil and natural gas exploration say the White House is "bending over backward" to let Shell continue its campaign in the region. Campaigners nevertheless lost their recent bid to prevent the permit process for Shell from moving forward. Elsewhere in arctic regions, Cairn Energy had limited success in its exploration efforts off the coast of Greenland, however. Shell already scaled back its ambitions in the region, suggesting that, given the number of rigs in service, the potential for a Deepwater Horizon-scale event is unlikely.

The last time pollsters examined the issue, most Americans -- more than 80 percent -- expressed support for tougher environmental regulations, though 57 percent said it was a primary issue for them. In the wake of the 2010 accident in the gulf, it appears that 15 billion barrels of oil and billions of dollars in investments from one of the world's largest oil companies has trumped the best of what environmental groups have to offer for the time being.

By. Daniel J. Graeber of Oilprice.com

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  • Frank Howell on September 06 2012 said:
    The report stated "The U.S. Interior Department estimates there are more than 15 million barrels of recoverable oil in the Chukchi Sea." Is that 15 million an error? The US uses 18 million barrels a day!
  • Mel Tisdale on September 07 2012 said:
    There might come a time, perhaps it has already arrived, when some nuclear capable nation (or terrorist group with access to nuclear devices) decides that enough is enough. That America has played 'King of the Castle' in an irresponsible manner for far too long and it needs to be shown that the planet is not theirs and theirs alone to play with.

    Just imagine that that same nation or group were to plant a nuclear device in ten, say, major centres of commerce, and thus also centres of population, throughout America. (How hard would they be to hide? A battlefield nuclear weapon is delivered via a 155 mm artillery round, so ‘dead easy’ is the answer.)

    These could be on timers, or remotely detonated. I reckon that by the time half had been detonated, at, say, two to three week intervals, the mass of the population would be headed into the hills and about as far away from any centre of commerce and population that their legs or fuel tanks will take them. How long would the food last and how long would the people last? Don't forget being armed is a right according to an amendment to the American Constitution, so 'them tha hills' will far from quiet. Also don’t forget that once detonated, it is impossible to put a nuclear device back together in order to find out who made it, like they did with the Lockerbie bomb. And any nation that did make such a device would make it absolutely tamperproof in case it were discovered.

    By this time America would be belly-up commercially and on its way to being some modern form of Stone Age society. Even those living ‘off the grid’ will not be safe as they will be assumed by some very hungry and armed people to have stocks of food. And let’s not forget that there would be still the same number of devices left. Perhaps they would be put on hold in order to thwart any recovery that what is left of the government manages to organise.

    So, after two to three months what is left? A super-power with little or no military personnel because they will have all deserted to protect their kith and kin? Probably. The leading trading nation that no longer trades? Almost certainly. The King of the Castle? Not by a long chalk. Needless to say, any nation that was considered a close ally of America would be living on tenterhooks.

    The above is a bleak and imaginary picture and I sincerely hope one that never comes to pass. But America really does have to consider just how many enemies it is making with its military adventures and drone strikes etc. together with its propensity to impose a ‘My way, or the highway’ policy on the rest of us (e.g. America wants to impose sanctions on Iran and so the rest of us are forced to as well, or face prosecution. Or conversely, Israel is allowed nuclear weapons and the rest of us had better agree.)

    It really is the height of audacity to be largely responsible for the planet’s failure to mitigate climate change, which has resulted in the Arctic becoming more and more ice-free, only to take advantage of same in order to produce more of the stuff that caused the ice to disappear in the first place. Not to mention that any drilling in the Arctic is a threat to the Arctic’s pristine environment, or more accurately, OUR Arctic’s pristine environment (and to hell with lines on a geo-political map).

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