• 35 mins Syrian Rebels Relinquish Control Of Major Gas Field
  • 2 hours Schlumberger Warns Of Moderating Investment In North America
  • 3 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 4 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 5 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 7 hours New Video Game Targets Oil Infrastructure
  • 8 hours Shell Restarts Bonny Light Exports
  • 9 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 16 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 21 hours British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 1 day Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 1 day Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 1 day OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 1 day London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 1 day Rosneft Signs $400M Deal With Kurdistan
  • 1 day Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 2 days Conflicting News Spurs Doubt On Aramco IPO
  • 2 days Exxon Starts Production At New Refinery In Texas
  • 2 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 3 days Enbridge Pipeline Expansion Finally Approved
  • 3 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 3 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 4 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 4 days Aramco Says No Plans To Shelve IPO
  • 7 days Trump Passes Iran Nuclear Deal Back to Congress
  • 7 days Texas Shutters More Coal-Fired Plants
Alt Text

Is The Aramco IPO On The Brink Of Collapse?

Conflicting news suggests that Saudi…

Alt Text

Kuwaiti Minister: OPEC Deal Extension May Be Unnecessary

Kuwaiti Oil Minister Al-Marzouk has…

Alt Text

Who Are The Biggest Buyers Of U.S. Oil?

Exports of U.S. petroleum and…

Climate Progress

Climate Progress

Joe Romm is a Fellow at American Progress and is the editor of Climate Progress, which New York Times columnist Tom Friedman called "the indispensable…

More Info

Shell Needs Five More Years In The Arctic

Shell Needs Five More Years In The Arctic

Kulluk

The damaged Royal Shell Dutch drilling barge Kulluk is loaded onto a transport ship in Unalaska, Alaska, on March 19, 2013.

CREDIT: AP Photo / Jim Paulin

Royal Dutch Shell wants the U.S. government to give it another five-year crack at drilling in the Arctic.

Back in July, the oil giant sent a letter to the Department of the Interior and its Bureau of Safety and Environmental Enforcement (BSEE), requesting that its leases — which will expire in 2017 — be paused for five years while the company regroups its attempts to start drilling operations. The letter was made public on Monday by the environmental group Oceana, after they obtained it through a Freedom of Information Act request. According to Bloomberg, Shell has already spent eight years and $6 billion in its current efforts to drill in the Beaufort and Chukchi Seas north of Alaska, with no oil production to show for it so far.

Leases from the U.S. government to drill in the Arctic typically expire after ten years if they have not been put to use, unless the lease holder can demonstrate that they’ve made serious progress towards the start of drilling. The BSEE has the authority to stop the clock on the leases, and in Shell’s case it’s already done so once in response to court decisions and other delays.

Related: Another Western Energy Company Ends Russian Cooperation

“The government should not bend the rules to allow the company to continue business as usual,” said Susan Murray, Oceana’s deputy vice president, in a statement. “Shell deserves no special treatment and, to the contrary, has a track record of irresponsible choices that warrants close scrutiny and the highest standards.”

In the letter, Vice President of Shell Alaska Peter Slaiby cites “circumstances beyond Shell’s control” to justify the request for a new delay. These include a case brought by environmental groups to the 9th Circuit Court of Appeals, which found in January that the government’s analysis of the economically recoverable oil in the region was “arbitrary and capricious,” grinding Shell’s efforts to a halt. The company also cited a pending revision by the U.S. government to drilling safety regulations for the Arctic, difficulties it had accommodating legal obligations towards Native whaling communities, a dust-up over air quality permits, the “unusually long lead times required to mobilize activities in Alaska,” an undersupply of “arctic-viable” drilling rigs among the reasons for the delay. Then there’s the drilling season in the Arctic, which is limited to just three or four months thanks to the cold and harsh conditions.

What the letter does not mention is the almost comical string of multi-year accidents, mishaps, and self-inflicted wounds Shell has encountered while trying to conquer those same conditions. In July of 2012 the company briefly lost control of one of its rigs, then failed to obtain proper Coast Guard certification. In September of that year, massive drifting ice packs forced it to suspend preparatory drilling. In December, the test of the containment dome Shell intended to use to prevent oil spills ended in disaster. Finally, that same month, matters climaxed when Shell’s second drilling rig, the Kulluk, ran aground on the Alaskan coast.

The company also received a string of warnings from government agencies, other oil companies, and major banks and investors about the dangers of drilling in the region. All this drove Shell to suspend its Arctic efforts in 2013, and then again in 2014 following the 9th Circuit court case.

“Though the government bears some responsibility for authorizing leasing and drilling without accurate analyses of impacts, Shell invested heavily despite the deficient government analysis, and despite the high risk and uncertainty of operating in remote Alaska waters with sea ice, rough seas, high winds and dense fog,” Murray continued.

Related: Western Sanctions Halt Exxon’s Drilling In Russian Arctic

“The company relies on difficult logistics and a lack of infrastructure to try to justify a departure from normal rules for leases while arguing to the White House that Arctic-specific safety and prevention regulations are unnecessary and too costly.”

Concerns over safety and the harsh conditions notwithstanding, the U.S. government estimates that 23 billion barrels of technically recoverable oil lie off Alaska’s northern coast. Going after that oil “is plainly in the national interest,” Shell said in the letter.

According to a statement yesterday from Nicholas Pardi, spokesman for the BSEE, the Interior Department “has received Shell’s request, which is currently under consideration.”

By Jeff Spross

Source: www.thinkprogress.org

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News