Posts Tagged ‘shell’

Shell expands Arctic exploration plans

May 9, 2011

By Tim Bradner
Alaska Journal of Commerce – original article here

Shell now has a more expansive exploration strategy for the Beaufort and Chukchi seas than what the company had previously planned.

The company intended to file plans of exploration in early May with the Bureau of Ocean Energy Management, Regulation and Enforcement, or BOEMRE, for up to 10 exploration wells in the Beaufort and Chukchi seas in 2012 and 2013, a Shell spokesman said.

Two drillships would be used.

Previously Shell planned to use one drillship in 2012 in the Beaufort, with an expectation of drilling one to two wells.

“We believe the conversations we are having with regulators and government officials are more positive in view of the safeguards we have put in place, even prior to Macondo,” said Pete Slaiby, Shell’s Alaska vice president. “As a result, we are cautiously optimistic we will be allowed to pursue a multi-well drilling program in 2012 as we have always planned.”

Not all of the wells outlined in the new exploration plans will actually be drilled, company spokesman Curtis Smith said.

“We file for permits for more wells than will actually be drilled so there is flexibility in changing locations depending on new geologic information or ice conditions,” he said.

Smith said the plan is now to use two drillships, with a goal of drilling two wells per year in the Beaufort Sea and three wells per year in the Chukchi Sea, he said.

Each drilling vessel would provide backup for the other in drilling a relief well in the event of a blowout, Smith said.

In the Arctic, offshore drilling must be done during the summer when the ice recedes, creating open water. The exception to this is with wells in near-shore coastal waters, where the depth is shallow enough to build an artificial gravel island.

In the 1980s, drillship were used in several exploration wells farther from shore in the Beaufort Sea, and there also were offshore exploration wells drilled in the Chukchi Sea, including many by Shell in the early 1990s.

No commercial discoveries were made in the 1980s and 1990s, but oil and gas was found in both the Beaufort and Chukchi at locations that are now the prime targets for Shell’s renewed exploration.

The drillships planned for Shell’s 2012 and 2013 work are the Noble Discoverer, which is now under contract to Shell for Arctic exploration but is now being used elsewhere, and the Kulluk, a drilling vessel built for the Arctic that Shell owns.

The Kulluk is now in Dutch Harbor, where it is undergoing modification, Smith said.

The new more aggressive plan represents a change in Shell’s strategy. The company previously planned to drill one to two wells in the Beaufort Sea, with one drillship, in 2012.

Shell will have to file new applications for air quality permits for each ship and for each area of drilling.

An air quality permit for Shell’s existing plan of drilling one well in the Beaufort Sea with a single drillship, previously planned for 2011 or 2012, is still pending with the U.S. Environmental Protection Agency’s Region 10 office in Seattle.

EPA had previously issued the permit but it was appealed by environmental groups to EPA’s internal Environmental Appeals Board. The appeals board kicked the permit back to Region 10 last January with a request for modifications.

The Region 10 office has yet to resubmit the modified air permit back to the appeals board.

Smith could not comment on the status of the permit but said Shell “is having good conversations with EPA and we’re optimistic.”

The air quality permits are similar for both the Beaufort and Chukchi, Smith said. The effort to resolve issued with the initial permit should make it easier with permits that follow.

Shell holds 137 federal OCS leases in the Beaufort Sea and 275 leases in the Chukchi Sea. The company has spent over $3 billion so far in its efforts to secure leases, do environmental work and secure permits for exploring the leases. About $2.2 billion of that was spent in bonus bids paid to the federal government for the Chukchi Sea leases.

Tim Bradner can be reached at

tim.bradner@alaskajournal.com.

Experts from Shell and Dubai Airports join Robert Swan’s International Antarctic Expedition 2011, Al Bawaba reports

May 8, 2011

Hornorkesteret says: Hands off the Antarctic, Shell! We do not approve of your presence there, even if it is “enhancing the leadership skills and environmental awareness of its personnel”.
On the contrary, we see this as part of an environmental hoax on Shell’s part, since they are one of the the world’s worst environmental offenders. Go home, Shell!
Hornfar

Published May 5th, 2011 by Al Bawaba – Original article here

Shell recently appointed two of its young professionals to join the 2011 International Antarctic Expedition led by renowned polar explorer and environmentalist Robert Swan. The initiative forms part of Shell’s commitment to enhancing the leadership skills and environmental awareness of its personnel. The two Shell professionals were joined by two other Emiratis from Dubai Airports.

The Antarctic expedition organized in March 2011 by Swan, the first person in history to walk to both the North and South poles, complements Shell’s renowned environmental activism. Shell was one of the first energy companies in 1997 to actively call for actions by governments, industry and energy users against climate change.

The inclusion of Shell representatives in the voyage also reflects the company’s unique approach to leadership development. In a 2010 study, 75 per cent of respondent organizations cited leadership development as important and yet only 23 per cent said that they were effective at developing leaders internally.

Majid Fairooz, Head of Planning, Buti Qurwash, Head of Security, at Dubai Airports, and Mohammed Azzazi, Production Technologist and Abdulrahim Turkistani from Shell gained valuable knowledge on Antarctic wildlife, geology, history and geography. They were introduced to Swan’s advocacy of preserving Antarctica and combating climate change via recycling, renewable energy and sustainability. They were also oriented on renewable energy’s vital role in preserving the environment.

“Shell is highly committed to addressing many of the environmental challenges. This requires a better understanding of how our operations affect the world’s eco-systems. Our active participation in advocacies such as Robert Swan’s 2041 programme will provide us with the information and hands-on experience we need to ensure more sustainable approaches to managing CO2 emissions.” said Omar Al Qurashi, Director of Communications, Shell in Dubai.

Anita Mehra, Vice President of Marketing & Corporate Communications, Dubai Airports, said, “Environmental sustainability is a high priority area for Dubai Airports and our goal is to build a corporate culture that embraces sustainability in every aspect. We believe that by being part of this expedition Majid and Buti have managed to raise greater interest about environmental concerns among their peers and colleagues, which could lead to other worthwhile contributions towards conservation.”

“The Antarctic expedition was and still is a life changing experience. The purpose of going to Antarctica became clear the day we returned home. We have to change perceptions about the environment that we live in and that change starts inside each individual. All of us can contribute to a better way of living. Small things can make a big difference,” said Fairooz.

Shell’s Abdulrahim Turkistani said, “This expedition was certainly a surreal experience for us. Besides being awestruck by the beauty of Antarctica, I learnt that while our planet can take care of itself, the resources it has are limited, making it imperative for us to live sustainably. This is the only way we can ensure that our future generations can continue to enjoy nature’s many wonders.”

Mohammed Azzazi commented, “Born in the Middle East, it was hard for me to visualize how an increase in temperature by one or two degrees could impact our planet. However, all this changed after my Antarctic expedition, which was a genuine eye opener. I now perfectly understand our mission at Shell and I commit to powering the world responsibly.”

The representatives from Shell and Dubai Airports together with their co- travellers boarded the 90.6-metre ‘Sea Spirit,’ an exploration ship that regularly conducts Antarctic, Arctic and other special interest voyages. Their eco-adventure began from Ushuaia, Argentina, the southernmost city in the world, passing through Cape Horn, the most southerly point of the Americas and stopping by King George Island, the location of the 2041 E-Base – the first education station built in Antarctica of sustainable products and run on renewable energy.  The group visited the site of Robert Swan’s 2008 ‘E-Base Goes Live’ mission where the explorer became the first person in Antarctic history to live for two weeks solely on renewable energy.

Shell continues to develop innovative technologies and practices and engage in strategic partnerships to ensure that sustainability concepts are integrated into the entire energy value chain. The company also encourages governments to support policies covering the optimal management of CO2 and other greenhouse gases.

© 2011 Al Bawaba (www.albawaba.com)

Russia Embraces Offshore Arctic Drilling

February 26, 2011

By ANDREW E. KRAMER and CLIFFORD KRAUSS Published: February 15, 2011 in the New York Times – Original article here

The Prirazlomnaya oil platform was brought to the Arctic seaport of Murmansk, 906 miles north of Moscow, to be adjusted.

MOSCOW — The Arctic Ocean is a forbidding place for oil drillers. But that is not stopping Russia from jumping in — or Western oil companies from eagerly following.

Russia, where onshore oil reserves are slowly dwindling, last month signed an Arctic exploration deal with the British petroleum giant BP, whose offshore drilling prospects in the United States were dimmed by the Gulf of Mexico disaster last year. Other Western oil companies, recognizing Moscow’s openness to new ocean drilling, are now having similar discussions with Russia.

New oil from Russia could prove vital to world supplies in coming decades, now that it has surpassed Saudi Arabia as the world’s biggest oil producer, and as long as global demand for oil continues to rise.

But as the offshore Russian efforts proceed, the oil companies will be venturing where other big countries ringing the Arctic Ocean — most notably the United States and Canada — have been wary of letting oil field development proceed, for both safety and environmental reasons.

After the BP accident in the gulf last year highlighted the consequences of a catastrophic ocean spill, American and Canadian regulators focused on the special challenges in the Arctic.

The ice pack and icebergs pose various threats to drilling rigs and crews. And if oil were spilled in the winter, cleanup would take place in the total darkness that engulfs the region during those months.

Earlier this month, Royal Dutch Shell postponed plans for drilling off Alaska’s Arctic coast, as the company continued to face hurdles from wary Washington regulators.

The Russians, who control far more prospective drilling area in the Arctic Ocean than the United States and Canada combined, take a far different view.

As its Siberian oil fields mature, daily output in Russia, without new development, could be reduced by nearly a million barrels by the year 2035, according to the International Energy Agency. With its economy dependent on oil and gas, which make up about 60 percent of all exports, Russia sees little choice but to go offshore — using foreign partners to provide expertise and share the billions of dollars in development costs.

And if anything, the gulf disaster encouraged Russia to push ahead with BP as its first partner. In the view of Russia’s prime minister, Vladimir V. Putin, BP is the safest company to hire for offshore work today, having learned its lesson in the gulf.

“One beaten man is worth two unbeaten men,” Mr. Putin said, citing a Russian proverb, after BP signed its Arctic deal with Rosneft, the Russian state-owned oil company. The joint venture calls for the companies to explore three sections in the Kara Sea, an icebound coastal backwater north of central Russia.

The BP agreement touched off little public reaction in Russia, in part because the environmental movement is weak but also because opposition politicians have no way to block or hinder the process.

The Arctic holds one-fifth of the world’s undiscovered, recoverable oil and natural gas, the United States Geological Survey estimates. According to a 2009 report by the Energy Department, 43 of the 61 significant Arctic oil and gas fields are in Russia. The Russian side of the Arctic is particularly rich in natural gas, while the North American side is richer in oil.

While the United States and Canada balk, other countries are clearing Arctic space for the industry. Norway, which last year settled a territorial dispute with Russia, is preparing to open new Arctic areas for drilling.

Last year Greenland, which became semi-autonomous from Denmark in 2009, allowed Cairn Energy to do some preliminary drilling. Cairn, a Scottish company, is planning four more wells this year, while Exxon MobilChevron and Shell are also expected to drill in the area over the next few years.

But of the five countries with Arctic Ocean coastline, Russia has the most at stake in exploring and developing the region.

“Russia is one of the fundamental building blocks in world oil supply,” said Daniel Yergin, the oil historian and chairman of IHS Cambridge Energy Research Associates. “It has a critical role in the global energy balance. The Arctic will be one of the critical factors in determining how much oil Russia is producing in 15 years and exporting to the rest of the world.”

Following the template of the BP deal, Rosneft is negotiating joint venture agreements with other major oil companies shut out of North America and intent on exploring the Arctic continental shelf off Russia’s northern coast. That includes Shell, its chief executive said last month. Rosneft’s chief executive, Eduard Y. Khudainatov, said other foreign oil company representatives were lining up outside his office these days.

Artur N. Chilingarov, a polar explorer, has embodied Moscow’s sweeping Arctic ambitions ever since he rode in a minisubmarine and placed a Russian flag on the bottom of the ocean under the North Pole, claiming it for Russia, in a 2007 expedition.

“The future is on the shelf,” Mr. Chilingarov, a member of Russia’s Parliament, the Duma, said in an interview. “We already pumped the land dry.”

Russia has been a dominant Arctic oil power since the Soviet Union began making important discoveries in the land-based Tazovskoye field on the shore of the Ob Bay in Siberia in 1962. The United States was not far behind with the discovery of the shallow-water Prudhoe Bay field in Alaska five years later.

What is new is the move offshore.

The waters of the Arctic are particularly perilous for drilling because of the extreme cold, long periods of darkness, dense fogs and hurricane-strength winds. Pervasive ice cover for eight to nine months out of the year can block relief ships in case of a blowout. And, as environmentalists note, whales, polar bears and other species depend on the region’s fragile habitats.

Such concerns have blocked new drilling in Alaska’s Arctic waters since 2003, despite a steep decline in oil production in the state and intensive lobbying by oil companies.

In Canada, Arctic offshore drilling is delayed as the National Energy Board is reviewing its regulations after the gulf spill.

Mr. Chilingarov placed a Russian flag on the bottom of the ocean under the North Pole, claiming the area for Russia, in a 2007 polar expedition.

But Russia is pressing ahead. The central decision opening the Russian Arctic easily passed Parliament in 2008, as an amendment to a law on subsoil resources. It allowed the ministry of natural resources to transfer offshore blocks to state-controlled oil companies in a no-bid process that does not involve detailed environmental reviews.

Until recently Russia regarded the Kara Sea, where BP and Rosneft intend to drill, as primarily an icy dump. For years, the Soviet navy released nuclear waste into the sea, including several spent submarine reactors that were dropped overboard at undisclosed locations.

Rosneft executives say their exploration drilling will not stir up radiation.

But in any case, Mr. Chilingarov, the advocate for Russian polar claims, said a little radiation was nothing to worry about. He said that his son was born on Novaya Zemlya, an Arctic testing site for nuclear weapons during the cold war, and is now “a bit taller than me.”

“In small doses,” Mr. Chilingarov said, “radiation is good for growth.”

Andrew E. Kramer reported from Moscow and Clifford Krauss from Houston.

This article has been revised to reflect the following correction:

Correction: February 19, 2011
A chart on Wednesday with an article about Russia’s eagerness to drill for oil in the Arctic Ocean gave an incorrect unit of measurement for estimates of natural gas reserves in the region. The shaded areas in the chart are believed to hold more than 100 trillion cubic feet of natural gas, not cubic tons. The unit of measurement was correct in an online version of the chart, available at nytimes.com/business.

Ancient trumpets played eerie notes

December 19, 2010
Scientists analyze tunes from 3,000-year-old conch-shell instruments for insight into pre-Inca civilization
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PREHISTORIC POPComputer scientist and musician Perry Cook plays a tune on a 3,000-year-old conch-shell instrument discovered in Peru. José Luis Cruzado, Chavin de Huantar Investigation and Conservation Project

Listen to shell music.

Now you can hear a marine-inspired melody from before the time of the Little Mermaid’s hot crustacean band. Acoustic scientists put their lips to ancient conch shells to figure out how humans used these trumpets 3,000 years ago. The well-preserved, ornately decorated shells found at a pre-Inca religious site in Peru offered researchers a rare opportunity to jam on primeval instruments.

The music, powerfully haunting and droning, could have been used in religious ceremonies, the scientists say. The team reported their analysis November 17 at the Second Pan-American/Iberian Meeting on Acoustics in Cancun, Mexico.

“You can really feel it in your chest,” says Jonathan Abel, an acoustician at Stanford University’s Center for Computer Research in Music and Acoustics. “It has a rough texture like a tonal animal roar.”

Archaeologists had unearthed 20 complete Strombus galeatus marine shell trumpets in 2001 at Chavín de Huántar, an ancient ceremonial center in the Andes. Polished, painted and etched with symbols, the shells had well-formed mouthpieces and distinct V-shaped cuts. The cuts may have been used as a rest for the player’s thumb, says study coauthor Perry Cook, a computer scientist at Princeton University and avid shell musician, or to allow the player to see over the instrument while walking.

To record the tunes and understand the acoustic context in which the instruments, called pututus, were played, the researchers traveled to Chavín.

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ANCIENT ACCOMPANIMENTAncient civilizations in Peru might have played this 3,000-year-old shell trumpet as part of a religious ceremony. New research has reconstructed what the instrument would have sounded like inside the religious site’s ceremonial chamber. Jyri Huopaniemi

As an expert shell musician blew into the horn, researchers recorded the sound’s path via four tiny microphones placed inside the player’s mouth, the shell’s mouthpiece, the shell’s main body and at the shell’s large opening, or bell. Similar to a bugle, the instruments only sound one or two tones, but like a French horn, the pitch changes when the player plunges his hand into the bell.

The team used signal-processing software to characterize the acoustic properties of each trumpet. Following the sound’s path made it possible to reconstruct the ancient shell’s interior, a feat that normally involves sawing the shell apart or zapping it with X-rays.

The researchers also wanted to know how the site’s ceremonial chamber, a stone labyrinth with sharply twisting corridors and ventilation shafts, changed the trumpet’s sound. To find out, the team arranged six microphones around the musician and reconstructed the sound patterns on a computer.

If the trumpets were played inside the stone chamber in which they were found, the drone would have sounded like it was coming from several different directions at once. In the dimly lit religious center, that could have created a sense of confusion, Abel says.

“Were they used to scare people while they were there?” asks Abel. “There are still a lot of things left open.”

Turns out, such questions about how sounds affect people and their behavior, an area called psychoacoustics, can be tested. It’s a field of active research, and not just for ancient civilizations: Another group at Stanford is now studying how a room’s acoustics affects human behavior. In one recent experiment, researchers separated test subjects into different acoustic environments to do a simple task — ladling water from one bucket to another in a dimly lit room.

“What your ear can actually hear plays into how you would behave, or the psychological experience in the situation,” says Abel.

SHELL CACOPHONY

A group of conch-shell instruments made by a pre-Inca civilization sound similar to a kid learning to play the trumpet.
Click here to listen.

ANCIENT TONE

A musician plays the fundamental frequency and the first overtone of a 3,000-year-old shell trumpet unearthed in Peru.
Click here to listen.

Credit: Miriam Kolar

Shell Presses for Drilling in Arctic

November 7, 2010
By CLIFFORD KRAUSS
Published: November 5, 2010
New York Times – Original article here

The Nanuq is part of Shell’s Arctic oil spill response fleet, which would be ready 24 hours a day.

HOUSTON — Eager to win approval for its stalled plan to drill for oilin the Alaskan Arctic, Royal Dutch Shell is beginning a public lobbying campaign, including national advertising, on Monday. As part of the effort, the giant oil company is promising to make unprecedented preparations to prevent the kind of disaster that polluted the Gulf of Mexico earlier this year.

Shell’s plan to drill in Alaska’s Beaufort and Chukchi seas has been snarled in regulatory delays and lawsuits for four years. The company has already invested $3.5 billion in the projects, and it was close to overcoming the final regulatory hurdles to begin drilling when BP’s Macondo well blew out April 20, killing 11 rig workers and spilling millions of barrels of oil into the gulf.

In response to the gulf accident, the Obama administration suspended most new offshore drilling, including in the environmentally sensitive waters of the Arctic.

But now that the moratorium on gulf drilling has been lifted, Shell is pressing the Interior Department to grant final approval for its Arctic projects by the end of this year so that the company has enough time to move the necessary equipment to drill next summer, when the waters offshore are free of ice.

“Every day we’re delayed, we’re delaying jobs and energy development,” Peter Slaiby, Shell’s vice president for Alaska, said in an interview.

“It’s a crushing irony that the Gulf of Mexico moratorium is lifted and we are not allowed to move forward.”

The gulf disaster raised public and government awareness of the risks of catastrophic spills from offshore wells. The waters off Alaska are considered particularly tricky because of the long periods of daytime darkness, periods of months when ice would block the movement of relief ships and the fragility of ocean habitats for whales, polar bears and other species.

“We are opposed to drilling until we get sufficient science that demonstrates that you can do it truly safely,” said Chuck Clusen, director of the National Parks and Alaska projects at the Natural Resources Defense Council.

Shell said its emergency response plan was far more robust than the one BP had in the gulf.

“We’re not a tone-deaf company,” Mr. Slaiby said. “We’ve really got to be compelling in what we are doing.”

 

Shell is beginning a public lobbying campaign, including national advertising, next week. The company’s plan to drill in Alaska’s Beaufort and Chukchi seas has been snarled in regulatory delays and lawsuits for four years.

Shell’s new marketing campaign promotes an “unprecedented spill response approach” including a sub-sea containment system, an upgrade of the drilling rig’s blowout preventer and an enhanced response plan that include teams and equipment at the ready 24 hours a day. 

The containment system would include a dome that could be placed over any leak, and a funnel to take any escaping oil to surface ships. A rig would be at the ready to drill a relief well if needed.

“We’ve opted out of the fire department type of approach,” Mr. Slaiby said. “Our assets can be on site and deployed within one hour.”

Shell has also scaled back its initial drilling plans to just one or two wells in the Beaufort Sea. It is postponing drilling in the more remote Chukchi Sea pending separate legal challenges.

The company has the support of Alaska’s state government, which is suing the federal government to overturn the drilling suspension.

Gov. Sean Parnell said the suspension was illegal because the Interior Department did not consult with state officials or consider the local economic consequences.

A federal district court judge in Alaska gave the Interior Department a deadline of Friday to respond to the Alaska suit, with a hearing planned for the end of the month.

The Justice Department responded Friday night with a filing that argued that the state did not have standing to sue in the matter, and that the Interior Department was in the process of considering the application.

“We are taking a cautious approach,” said Kendra Barkoff, an Interior Department spokeswoman.

“Alaska represents unique environmental challenges. We need additional information about spill risks and spill response capabilities.”

Shell’s campaign appears aimed at increasing pressure on the Obama administration to approve the plan. The company is placing ads for the rest of the month in national newspapers, liberal and conservative political magazines and media focused on Congress.

For Shell and others in the oil and gas industry, nothing less than the revival of Alaska’s oil history is at stake.

Alaska is the second-biggest oil-producing state after Texas, but it has suffered a steady production decline since 1988, when output peaked at 2.1 million barrels a day.

With its North Slope fields long past their prime, the Arctic National Wildlife Refuge off-limits to drilling and offshore wells largely untapped, the state today produces about 680,000 barrels a day and the Trans-Alaska Pipeline System is running at one-third of capacity.

To make matters worse, the United States Geological Survey last month cut previous estimates of oil reserves in Alaska’s National Petroleum Reserve, an area preserved by the federal government in case of national emergency, by about 90 percent, to 896 million barrels, approximately what the country consumes in six weeks.

Industry officials say there are as many as 25 billion barrels of oil reserves in the Alaskan Arctic. At the moment, there has been no offshore drilling in Alaskan federal waters since 2003, although there is some production from older wells.

Companies wanting to drill face heavy drilling costs, local opposition and legal challenges from environmental groups that say a potential blowout could endanger critical feeding and spawning grounds for a variety of Arctic species and warn that rough Arctic seas would complicate any containment and cleanup operations.

Mr. Clusen of the resources council noted that a blowout at Shell’s project would cause a slick on barrier islands that are critical birthing areas for polar bears in the winter.

He urged that Shell be obliged to rewrite its exploration documents to include the new response plans and allow the Interior Department’s Bureau of Ocean Energy Management, Regulation and Enforcement to formally review “whether that response is adequate or not.”

Shell hopes that Chukchi Sea leases it acquired for $2.1 billion in 2008 could eventually produce as much as 400,000 barrels of oil a day. The holdings in the Beaufort Sea are probably less bountiful, but could eventually produce as much as 100,000 barrels a day.

Shell executives insist that drilling in Arctic waters is safe. They say they will be drilling in 100 to 150 feet of water in the Beaufort Sea, compared with depths of 5,000 feet and more in the gulf, which means that the equipment will be subject to far less pressure.

A version of this article appeared in print on November 6, 2010, on page B1 of the New York edition.


Citing gulf oil spill, Obama to suspend Arctic drilling

June 3, 2010

Anchorage Daily News
WASHINGTON — The Obama administration Thursday will suspend planned exploratory oil drilling in the Arctic Ocean off Alaska until at least 2011, a casualty of the Gulf of Mexico oil spill.

The suspension will be part of a report that Interior Secretary Ken Salazar will give to President Barack Obama, who’s likely to address the suspension as well as other proposals stemming from Salazar’s report, at a White House news conference Thursday.

The move will stop Shell from drilling five wells in the Chukchi and Beaufort seas off northern Alaska weeks before it had hoped to start work, an administration official told McClatchy Newspapers.

The move will stop for now a controversial expansion of oil drilling in a part of the world that could hold vast stores of oil and natural gas, but which environmentalists warn would come at great risk.

Despite a late appeal from Shell that it would employ new safety measures in the wake of the Gulf spill, Salazar was unconvinced that the exploratory drilling even in the much shallower waters of the Arctic would be safe.

“He is suspending proposed exploratory drilling in the Arctic,” an administration official said on condition of anonymity to talk before Salazar’s report is officially released Thursday. “He will not consider applications for permits to drill in the Arctic until 2011 because of the need for further information-gathering, evaluation of proposed drilling technology, and evaluation of oil-spill response capabilities for Arctic waters.”

Shell, which paid $2.1 billion in 2008 for the leases, had planned to start exploratory drilling in June or July. The decision was met with a statement of deep unhappiness by U.S. Sen. Mark Begich. “I am frustrated that this decision by the Obama administration to halt offshore development for a year will cause more delays and higher costs for domestic oil and gas production to meet the nation’s energy needs,” Begich said Wednesday night in a prepared statement. “The Gulf of Mexico tragedy has highlighted the need for much stronger oversight and accountability of oil companies working offshore, but Shell has updated its plans at the administration’s request and made significant investments to address the concerns raised by the Gulf spill.”

Begich said he would work with fellow Alaska Sen. Lisa Murkowski, a Republican, the Interior Department and Alaska drillers to ensure operations would resume next year. A spokesman for Shell said the company would issue a media response Thursday. A spokesman for Murkowski said she would also respond Thursday. The federal Minerals Management Service estimates that the two Arctic seas hold up to 19 billion barrels of oil and up to 74 trillion cubic feet of natural gas, a combined resource comparable to the onshore fields of Alaska’s North Slope.

In a post-Gulf spill pitch to keep its work on track, Shell stressed that the Arctic seas are shallower than the Gulf, that drilling wouldn’t have to probe as far into the earth, and that the equipment wouldn’t be under as much pressure — at least for the first years of exploration. Intense pressures in the deep Gulf of Mexico hole contributed to the Deepwater Horizon blowout and subsequent fire and oil spill. In the Chukchi Sea, Shell said, it would be drilling in 150 feet of water to a depth of 7,000 to 8,000 feet. In the Beaufort, which is also 150 feet deep, it would be drilling to a depth of 10,200 feet.

The Deepwater Horizon rig in the gulf was working through 5,000 feet of water, and then drilling to a depth of 18,000 feet. On May 14, Shell sent a five-page letter to the Minerals Management Service spelling out how it plans to drill in Arctic waters, how it would prevent a spill, and how it would respond starting within an hour if a spill occurred. “Shell is committed to undertaking a safe and environmentally responsible exploration program in the Chukchi Sea and Beaufort Sea in 2010,” Shell Oil Co. President Marvin E. Odum told the MMS. “I am confident that we are ready to conduct the 2010 Arctic exploratory program safely and, I want to be clear, the accountability for this program rests with Shell.”

Those plans included nine new steps the oil giant has added since the Gulf of Mexico spill, including a policy of testing underwater equipment called a blowout preventer every seven days instead of every 14 days and development of a system to allow a remote-operated vehicle to turn the blowout preventer back on.

“Shell will be ready to respond with oil spill response assets in one hour,” Odum told federal regulators, pointing to a three-tier system including an onsite spill team, nearby barges and response vessels and onshore response teams. He also argued that the brutal weather of the Arctic makes it easier to clean up an oil spill, not more difficult. “Arctic conditions create differences in responding to oil in cold and ice conditions,” he said. “Differences in evaporation rates, viscosity and weathering provide greater opportunities to recover oil.”

He said a 2009 project proved that “in Arctic conditions, ice can aid oil spill response by slowing oil weathering, dampening waves, preventing oil from spreading over large distances, and allowing more time to respond.”

Environmentalists countered that the harsh environment and the remoteness of the area would make any spill harder to handle, not easier. “Hazards present in the Arctic can include frigid temperatures, presence of sea ice, gale-force winds, intense storms and heavy fog,” said Chuck Clusen, the director of the Alaska project at the Natural Resources Defense Council. “To date, no technology exists to clean up oil in sea ice conditions. Further, the cold water breaks down oil much slower than the warm Gulf waters. … The potential for loss in the Arctic is great.”

Administration officials noted that Salazar already had been pulling back from offshore drilling in Alaska even before the Gulf spill raised new questions about safety within the industry as well as regulation and oversight from MMS, which resides within his department.

In March, they said, Salazar canceled four remaining lease sales that had been scheduled for the Chukchi and Beaufort seas. Also in March, Obama put Bristol Bay, one of Alaska’s premier salmon grounds, off limits to oil and gas exploration through 2017.

Anchorage Daily News reporter Richard Mauer and McClatchy correspondent Erika Bolstad contributed to this article.

Original article here

Shell: We’re ready to drill in Arctic Ocean

May 13, 2010

By William Mccall | The Associated Press

PORTLAND, Oregon – Shell Oil is ready to drill in the Arctic Ocean this summer and asked a federal appeals court Thursday to rule quickly on a challenge by environmentalists concerned about the risk of a major spill after the Gulf of Mexico disaster.

Kathleen Sullivan, an attorney for Shell, said the company has spent at least $3.5 billion on Alaska operations in the past few years as it prepares for exploratory drilling set for July in the Beaufort and Chukchi seas.

“Shell has waited years to recover its investment,” Sullivan told a three-judge panel of the 9th U.S. Circuit Court of Appeals in Portland. “We’re ready to go.”

“I’m sure Shell would like to win,” replied Chief Judge Alex Kozinski.

But a coalition of environmentalists and Native Alaska groups who are challenging the drilling plans told the court the federal Minerals Management Service failed to consider the potential threat to wildlife and the risk for disaster before it approved the Shell project.

Christopher Winter, an attorney for the Alaska Eskimo Whaling Commission, said the Interior Department agency “simply ignored key aspects” about the possible effects of drilling operations on bowhead whales, including interruption of feeding patterns.

David Shilton, a Justice Department lawyer representing the minerals service, responded by saying studies have shown noise from drilling has only a “temporary and minor” effect on the whales, whose population is healthy and has been increasing.

Deirdre McDonnell, the attorney for the Native Village of Point Hope in Alaska, the lead petitioners in the case, argued that Shell had not made adequate plans to deal with an emergency, such as a major spill.

The Shell plan, for example, “doesn’t say what happens if the drill ship is disabled or has sunk,” McDonnell told the judges.

She also said government did not consider the cumulative impact of drilling in the Arctic Ocean.

Sullivan argued, however, the government must consider the facts at hand rather than “speculative” future impact and Shell has made extensive plans that include dealing with “the remote and infinitesimal likelihood of a spill.”

Interior Secretary Ken Salazar announced last December the Minerals Management Service had conditionally approved plans by Shell to drill three exploratory wells in the Chukchi Sea, saying environmentally responsible exploration is a key component of reducing dependence on foreign oil.

Conditional approval for exploration in the Beaufort Sea came last October, as part of the development of oil leases sold under the Bush administration and upheld by the Obama administration in March.

Although the appeals court hearing had been scheduled before the Gulf Oil spill and arguments did not involve it, the environmental coalition has been making comparisons in public statements about the case.

Original article here