Posts under ‘Alaska’

January 03, 2012

After what happened last year when BP’s oil well blew out and dumped millions of gallons of crude into the Gulf of Mexico, the idea of drilling for oil in the frigid Arctic Ocean off northern Alaska sounds risky.

Even in the relatively placid and temperate Gulf, it took 86 days to cap BP’s damaged well, and by then raw crude had spread for hundreds of miles. Further, the frigid arctic waters aren’t as rich in the oil-eating bugs that limited damage in the Gulf. The Beaufort and Chukchi seas, where Royal Dutch Shell wants to drill next summer, are covered with ice two-thirds of the year.

But despite those risks — and the fact that the Shell bid is shaping up as an election-year controversy — other factors say Shell should be allowed to drill. And, in fact, the Obama administration has granted the company a conditional go-ahead.

There are at least three reasons for moving ahead:

• The Arctic Ocean is much shallower than the Gulf of Mexico. Shell would drill in 160 feet of water or less, compared with the mile-deep water where BP was drilling in the Gulf. And well pressures off Alaska are just a third to a half what they are where BP drilled. If something did go horribly wrong, Shell would benefit from BP’s experience.

• Shell and other companies have drilled more than 100 wells in the Arctic waters off Alaska and Canada without serious incident, which suggests that drilling there, safely, is possible. Shell also has a better safety record than BP, and with $4 billion already invested in Arctic operations would face significant losses if it caused a serious spill.

• The U.S. Geological Survey estimates that the area holds more than 20 billion barrels of oil, which would rival some of the mega-fields in the Middle East— a serious consideration for a nation that still imports almost half its oil.

In an ideal world, there’d be no need to drill in Arctic waters, just as there’d be no need to build the controversial Keystone pipeline to bring tar sands oil through the United States from Canada, or even to resume drilling in the ultra-deep Gulf of Mexico. But until most of America’s 250 million motor vehicles run on something other than gasoline, pretending that the nation doesn’t need more domestic oil is foolish.

Americans shouldn’t stand for another disaster like the one that a careless, clueless BP caused last year, but neither can their energy needs be ignored.

Give Shell the go-ahead, but keep it on a short leash.

OPPOSING VIEW: Say no to Arctic drilling

SOURCE ARTICLE

MPs are to question UK oil and gas companies on the safety of drilling in the Arctic, after fears that retreating ice will see a damaging rush to exploit billions of barrels of untapped reserves in the region.

The committee’s remit will include the entire area of the Arctic Circle and both onshore and offshore drilling Photo: Bloomberg News

COMPASS: Other points of view

By PETE SLAIBY Published: January 4th, 2012

Pete Slaiby is vice president for Shell Alaska.

In her recent opinion piece (Jan. 2), Wilderness Society Arctic Program Director Lois Epstein assumes that neither Alaskans, the nation nor Shell are “ready to drill safely in the Arctic.” Ms. Epstein then dismisses decades of data that indicate otherwise and claims drilling in the Arctic would lead to a “reasonable likelihood of disaster.” The fact is, Shell and others have successfully drilled more than 35 wells in the Alaska offshore without incident — not counting the Cook Inlet wells that have helped heat Anchorage homes for over 50 years.

By John Donovan

In October 2010, the Daily Mail published an article reporting claims by Royal Dutch Shell Plc Chief Executive, Peter Voser, that Shell would never have made the mistakes that led to the BP Gulf of Mexico oil disaster, which resulted in a huge oil spill.

The claims have come back to haunt Mr Voser.

Royal Dutch Shell wades in with attack on BP over spill (Daily Mail 13 October 2010)

We subsequently learned of a “near miss” which had taken place in December 2009 on Shell’s Sedco 711 North Sea platform, with an uncanny similarity to issues surrounding the April 2010 Deepwater Horizon disaster.

Since then, Shell has been responsible for the biggest oil spill in the last decade in the North Sea, amid allegations of Shell hiding the facts.

This has been followed by the biggest Nigerian deepwater oil spill in the last decade, into the Atlanta Ocean.

All the responsibility of Royal Dutch Shell, the oil company in which the U.S. government has recently placed its trust to drill in the Arctic Ocean.

It is notable that Shell’s atrocious track record on oil spills and related safety and environmental issues have been deleted by anonymous parties from Wikipedia articles. Entire pages of copious information from reputable, verifiable, independent sources, including newspaper reports, court documents and environmental agency findings, have been systematically deleted from Wikipedia by anonymous parties.

SELECTION OF DECEMBER 2011 OFF SHORE NIGERIA SHELL OIL SPILL REPORTS

Satellite Imagery Indicates Shell Spill May Be Worse Than Reported: 25 December 2011

Nigerian Oil Spill Stretches 900 Square Kilometers, says Environmental Group: 24 December 2011

Huge slick from Shell’s 1.68 million gallon Atlantic Ocean oil spill: 23 December 2011

Rush to clean major Shell oil spill off Nigeria: 22 December 2011

News Shell oil spill off Nigeria likely worst in decade: 22 December 2011

SELECTION OF AUGUST 2011 NORTH SEA OIL SPILL REPORTS

North sea oil spill ‘worst for a decade’: The Guardian August 2011

North Sea oil spill is worst in a decade: Telegraph August 2011

North Sea oil leak worst for a decade: The Scotsman August 2011

Don’t hide facts about oil leak: The Herald

Shell Under Fire Over Silent Tactics: Spiegel Online

Shell Withholds Information On North Sea Oil Spill: UK Progressive Magazine

Leader: Onus is on Shell to come clean on North Sea oil spill: The Scotsman

Don’t hide facts about oil leak: Herald Scotland

Shell accused of secrecy over North Sea platform oil leak: Aberdeen Press and Journal

Shell, govt spin machine keeps lid on worst UK oil spill for decade: RT

Shell accused of playing down spill as estimate rises: Aberdeen Press and Journal

Shell needs to come fully clean: The Independent

Shell ’should have been more open about oil spill’: Herald Scotland

Shell less than transparent about worst UK oil spill in a decade: Greenpeace

So many questions, so few answers from Shell: The Scotsman

Shell mum on flow from oil pipeline leak: Reuters

Leader: Oil is not well where information is concerned: The Scotsman

Criticism Is Growing Over Shell’s Response to Oil Leak: New York Times

Shell’s reputation is tarnished by North Sea oil spill: TheNewsTribune.com

By NATALIYA VASILYEVA, AP Business Writer: 23 December 2011

Click on image to enlarge

MOSCOW (AP) — The sinking of a floating oil rig that left more than 50 crew dead or missing is intensifying fears that Russian companies searching for oil in remote areas are unprepared for emergencies — and could cause a disastrous spill in the pristine waters of the Arctic.

Only four months ago, Russian energy giant Gazprom sent Russia’s first oil platform to the environmentally sensitive region, and industry experts and environmentalists warned it is unfit for the harsh conditions and is too far from rescue crews to be reached quickly in case of an accident. They are demanding Russia put Arctic oil projects on hold.

Russia is the world’s largest oil producer, but it extracts most of its oil onshore, with no more than 2 percent of its production coming from mature offshore fields in the warm Black and Caspian seas and relatively new fields just off Sakhalin Island in the far east.

As Russia’s core oil fields in Eastern Siberia are depleted, companies are looking north. The government hopes that up to 80 million tons of oil will be produced annually in the Arctic by 2030.

Russia is trying to assert jurisdiction over parts of the Arctic, which is believed to hold up to a quarter of the Earth’s undiscovered oil and gas. By speeding up the Arctic oil project, the government is strengthening its bid.

The Kolskaya floating oil rig that capsized and sank in the Sea of Okhotsk on Dec. 18 had done exploratory drilling for Gazprom Neft Shelf, a subsidiary of Gazprom. It was being towed back to an eastern Russian port in a fierce storm when a strong wave broke some of its equipment and portholes, and it capsized in the choppy water.

Gazprom is now pioneering the oil development of Russia’s sector of the Arctic and was the first Russian company to dispatch a drilling rig to the Pechora Sea in northwest Russia.

Russian oil companies have never operated in weather conditions as harsh as those found in the ice-bound Arctic, where ice ridges are meters (yards) deep and storms are frequent. The Kolskaya accident has reinforced fears that they are unprepared to meet the challenges.

“This tragedy has once again reminded us of how high the risks of offshore accidents are,” said Alexei Knizhnikov, an oil and gas policy officer with the World Wildlife Fund.

WWF, Greenpeace and five regional Russian environmental organizations signed a petition on Thursday calling for a parliamentary investigation and urging the government to suspend the oil projects for now.

The petition accuses government agencies of failing to enforce environmental and safety regulations and says that current laws are inadequate for dealing with the magnitude of risk in the Arctic.

Environmentalists first raised their concerns when Gazprom announced in August that it was sending its platform to the Arctic for exploratory drilling in the Pechora oil field, which holds some 6.6 million tons of oil.

The platform’s underwater section was built in Russia in the 1990s, while its upper part comes from a platform built in Scotland in 1982 and decommissioned from the North Sea in 2002.

Gazprom insists the Prirazlomnaya platform, billed as the first to be ice resistant, is safe and contains no old equipment except for its frame.

“We’ve done our best to implement the latest technology and regulations to prevent any accidents,” Vladimir Vovk, chief of Gazprom’s department for the management of equipment and technologies in developing marine fields, said at a news conference in September.

Environmentalists question both the state of the equipment and the platform’s design. Because the Prirazlomnaya is situated hundreds of kilometers (miles) offshore, it is designed to store huge quantities of oil until tankers can arrive to collect it. The platform’s storage tanks can hold up to 120,000 tons (840,000 barrels).

Unlike the Kolskaya, which was carrying no oil when it sank, the Arctic platform could potentially cause a disastrous spill if it capsized in icy, rough seas.

The distance from shore would also complicate any rescue or cleanup mission. The nearest port of any size is in Murmansk, some 1,000 kilometers (600 miles) away.

Even in warmer, more hospitable waters, accidents at oil platforms have been disastrous.

A giant oil slick was approaching the coast of Nigeria on Friday after what Royal Dutch Shell said was a spill during the transfer of oil from its floating platform in the offshore field to a waiting tanker. The spill came less than a week after Shell received approval from the U.S. government to drill exploratory wells off Alaska’s northwest coast, in the Chukchi Sea near Russian waters.

In the Gulf of Mexico, the 2010 explosion of the BP-operated Deepwater Horizon rig killed 11 workers and led to more than 200 million gallons (4.8 million barrels) of oil spewing from a well deep beneath the sea.

Russia’s parliament gave preliminary approval in September to a bill intended to tighten regulations on oil companies working in the Arctic.

Yekaterina Khmelyova, an environment law officer at the WWF, said the bill does not do enough to hold the oil companies publicly accountable or to guarantee a full assessment of the environmental risks. She said environmentalists and the business community are working on a new draft that among other things would provide for the creation of clean-up funds.

Oil industry experts also have expressed doubts about Gazprom’s expertise in offshore drilling in the Arctic as well as the platform’s design.

They have questioned the economic justifications for the project. The oil in the Pechora field is of low quality and the project will be loss-making without tax breaks, said Valery Nesterov, a senior analyst with the Moscow-based investment bank Troika Dialog. For state-controlled Gazprom, the Arctic project appears to be more of strategic importance than about any immediate economic benefits, he said.

“This is clearly a strategic task that the company is executing,” Nesterov said. “It looks like Russia is not going to give up that strategy since the interests of ship yards, machinery producers and, possibly, the military are involved.”

Four years ago, Russia staked its claim to supremacy in the Arctic by planting a titanium flag on the ocean floor and arguing that an underwater ridge connected the country directly to the North Pole. The United States does not recognize the Russian assertion and has its own claims, along with Denmark, Norway and Canada.

Russia, Canada and Denmark are planning to their respective file claims to the ridge to the United Nations.

In past years, Russian ship yards and machinery producers have been able to stay afloat largely thanks to large orders coming from state-owned plants and government-sponsored projects. A large-scale oil and gas development of the Arctic is likely to give a welcome boost to both industries.

Copyright © 2011 The Associated Press. All rights reserved.

SOURCE ARTICLE

By Joe Carroll, Juan Pablo Spinetto and Edward Klump – Dec 23, 2011 10:15 AM GMT

Brazil’s threatened indictment of Chevron Corp. (CVX) and Transocean Ltd. (RIG) executives after offshore oil leaks shows that regulators from the North Sea to the Indian Ocean are stepping up scrutiny after BP Plc’s 2010 disaster.

Brazilian authorities have said they may prosecute employees, shut operations and exact more than $10 billion in fines after the leaks at the Frade field 230 miles (370 kilometers) off the coast of Rio de Janeiro. The spill occurred 19 months after an explosion in the Gulf of Mexico killed 11 workers and triggered the biggest offshore U.S. oil spill.

Governments around the world are paying closer attention to how energy explorers drill into high-pressure deposits of crude and natural gas as much as 8 miles beneath the sea surface. Chevron’s Brazil incident took place after a ConocoPhillips (COP) leak in China and prior to what may be Nigeria’s biggest spill in a decade at a Royal Dutch Shell Plc facility.

“There’s been just such a rash of them that governments have got to act tough” with oil companies, Allen Brooks, a managing director at energy-investment bank PPHB LP in Houston and Chevron shareholder, said in a phone interview. Since the BP accident “every spill after that is heightened in terms of media attention and obviously government concern.”

ConocoPhillips was criticized by the People’s Daily, China’s Communist Party newspaper, for “negligence, cover-ups and cheating” in its handling of a June leak in Bohai Bay. Premier Wen Jiabao ordered a “thorough” investigation in September.

In Nigeria, Royal Dutch Shell (RDSA) shut its 200,000 barrel-a-day Bonga field this week after a tanker-loading accident caused less than 40,000 barrels of crude to leak.

Olympic Hosts

Brazilian officials are seeking 20 billion reais ($10.8 billion) in penalties from Chevron for the Nov. 7 leaks that the San Ramon, California-based company has estimated at 3,000 barrels.

The furor in a nation keen to protect beaches from floating globs of crude ahead of the 2014 World Cup and 2016 Olympic Games may lead to new drilling rules so tough that oil exploration becomes unprofitable, said Adriano Pires, an economist and former adviser to Brazil’s state oil ministry.

“What I fear is now we have a circus created around the Chevron problem, a real circus, and to show the people they are doing something they may create norms, legislation and proceedings that make it impracticable to get environmental licenses for offshore exploring,” Pires, head of the Brazilian Center for Infrastructure, a Rio-based energy-industry consultancy, said in a telephone interview.

Making Exploration Expensive

“Depending on the measures that the government may take, it would make oil exploration in Brazil much more expensive,” he said.

Brazil’s federal police have said they intend to indict employees involved in the drilling that led to leaks from sea floor fissures near the $3.6 billion development, Kurt Glaubitz, a spokesman for Chevron, said in a Dec. 21 e-mail. In a separate statement, Transocean, owner of the drilling rig leased for the Frade field, said it will defend the company.

Chevron underestimated the amount of pressure at an oil deposit it was exploring, and crude leaked from the reservoir for about eight days, George Buck, president of Chevron’s Brazilian subsidiary, said on Nov. 20. Buck was among 17 Chevron and Transocean employees targeted for indictments, the Folha de S. Paulo newspaper reported on Dec. 21. Glaubitz declined to identify the employees targeted for indictment.

Foreign Investment ‘Chill’

“I’m a little surprised by the stance that you’re seeing in Brazil, largely because it’s so excessive, potentially, that you could put a very big chill on foreign investment in the deep water,” Ted Harper, who helps manage about $6.8 billion in assets at Frost Investment Advisors in Houston, including about $50 million of Chevron shares, said in a phone interview.

The response so far in Brazil is an “overreaction,” he said.

Chevron has lagged its peers since the leaks were disclosed on Nov. 10. Chevron has gained 0.8 percent since then, compared with increases of 7.1 percent and 4.9 percent, respectively, for Exxon Mobil Corp. (XOM) and Shell, the biggest Western energy companies by market value.

ConocoPhillips, the third-largest U.S. oil company, said on Dec. 21 that it’s taking responsibility for the Bohai Bay spill and is setting up compensation funds to support environmental research and affected communities.

Royal Dutch Shell, Europe’s largest oil company, said yesterday as much as half of the crude that leaked from the Bonga installation has dissipated through natural dispersion and evaporation. Bonga, located 75 miles off Nigeria’s coastline, pumps about 10 percent of the West African nation’s oil.

Worst Since 1998

The leak may have been the country’s worst since a January 1998 spill dumped an estimated 40,000 barrels into the sea from the Idoho platform on the southeastern coast, with slicks reported as far west as Lagos. Shell, the largest foreign oil producer in Nigeria, has been criticized by some local residents and foreign groups for onshore spills.

An “independent verification” of the Bonga platform incident is needed to ensure the spill wasn’t more, Nnimmo Bassey, executive director of Environmental Rights Action, said in a phone interview from Lagos. “Shell has never been forthcoming about incidents of oil spills in the past.”

BP has booked more than $40 billion in losses related to last year’s Gulf disaster that sank Transocean’s Deepwater Horizon rig and spilled an estimated 4.9 million barrels of crude. The London-based oil producer also faces hundreds of lawsuits by fishermen, hoteliers and property owners in coastal areas where crude washed ashore.

More Awareness

Unlike the BP incident in the Gulf, this year’s Brazilian and Chinese spills are within the normal range of oil industry accidents, Nansen Saleri, chief executive officer of Quantum Reservoir Impact LLC in Houston, said in a telephone interview.

“What’s different right now, post-Macondo, is that there’s far more awareness globally at all levels,” he said. In the long run, the industry will develop better and more stringent procedures to help prevent small incidents, he said, and oil and gas development will continue.

“Those countries who choose to go on a very punitive path at the end will suffer the negative consequences themselves,” said Saleri, who is a former reservoir-management chief at Saudi Arabia’s state oil company.

To contact the reporters on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net; Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net; Edward Klump in Houston at eklump@bloomberg.net

To contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net; Dale Crofts at dcrofts@bloomberg.net

SOURCE ARTICLE

By Pierre Bertrand | December 22, 2011 2:07 AM GMT

Alaskan environmentalists are sounding the alarm bells this week, responding to two major oil industry victories in a state that has been a recurring flash point between environmental groups, legislators and the giants of petroleum exploration.

(Reuters) – The U.S. Bureau of Ocean Energy Management on Friday conditionally approved Shell Gulf of Mexico Inc’s revised plan to drill six oil exploration wells in the Chukchi Sea offshore of Alaska next year, the agency said in a news release.

The conditional approval does not authorize drilling to start. Shell Gulf of Mexico, a unit of Royal Dutch Shell, must obtain separate drilling permits for each well.

BOEM’s approval also requires the company to undertake a range of safety and environmental protection measures prior to starting work, including winning approval of its well capping and containment system and its oil spill response plan.

The conditional approval seeks to mitigate the risk of an end-of-season spill by requiring cessation of drilling 38 days before the annual onset of sea ice, typically November 1, to allow time for blowout control and cleanup in the event of an accident.

“We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed,” BOEM Director Tommy Beaudreau said.

Environmental advocacy groups including the Natural Resources Defense Council, the Sierra Club and a number of Alaska-based groups issued a joint statement decrying BOEM’s “reckless” decision.

“There is no proven way to clean up an oil spill in the Arctic’s extreme conditions and there is a significant dearth of scientific information, making it impossible to understand the impact of Shell’s activities,” the groups’ statement said.

Shell issued a statement welcoming the BOEM decision, but expressing caution about the provision limiting the Chukchi drilling season.

“We are concerned that this unwarranted restriction could severely impact our ability to deliver a complete Chukchi program,” Shell’s statement said.

“Shell remains committed to employing world-class technology and experience to ensure the delivery of a safe, environmentally responsible Arctic exploration program,” Shell said.

(Reporting by Bruce Nichols; editing by Andrea Evans)

SOURCE ARTICLE

December 16, 2011, 5:06 PM EST

By Jim Snyder

Dec. 16 (Bloomberg) — Royal Dutch Shell Plc won conditional U.S. approval for a plan to drill as many as six exploration wells in Alaska’s Chukchi Sea next year, the Bureau of Ocean Energy Management said.

Final approval requires Shell to meet safety and environmental-protection measures, according to an e-mailed statement today from the Interior Department bureau. Shell will have to stop drilling 38 days before ice appears in the Arctic, to avoid an end-of-the season spill when cleanup is difficult, the agency said. The U.S. projects ice will form by Nov. 1.

“We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed on its exploration plan,” Tommy Beaudreau, bureau director, said in the statement.

Shell, which has invested about $4 billion in the Arctic leases since 2005, hasn’t drilled any wells in the region while opponents won delays with appeals and lawsuits. Environmental organizations and Alaskan native groups have said it would take too long for equipment to reach the remote and icy region during an oil spill.

Shell acquired its leases to the Chukchi Sea in 2008.

The Interior Department’s Bureau of Safety and Environmental Enforcement must approve Shell’s oil-spill response plan before drilling can start, according to the statement.

The company needs permits from the Environmental Protection Agency, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service, according to the statement.

–With assistance from Katarzyna Klimasinska in Washington. Editors: Steve Geimann, Larry Liebert

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

SOURCE ARTICLE

By Lisa Demer, McClatchy Newspapers December 16, 2011 11:05 AM

NEW ORLEANS — Standing in front of a brightly coloured, 3-D image of the geology far below the floor of the Chukchi Sea, Steve Phelps pointed to the “giant opportunity” that has prompted Shell to pour billions of dollars into the Alaska Arctic.

“Burger — that’s the name you are going to get to know,” Phelps recently told reporters gathered here to learn about the huge oil company’s plans and promises for Alaska.

Phelps is Shell’s Alaska exploration manager, a geologist whose job it is to find big oil. The Burger field, part of a Shell naming theme that revolved around junk food, has been eyed by various oil companies for years. But it’s more than 110 kilometres offshore in the Chukchi Sea — between Siberia and the northwest coast of Alaska — and until recently was thought to be too expensive to develop. Now Shell — for the second time — holds the leases.

Armed with promising new seismic science, a sort of undersea sonogram of the Earth’s belly, the Dutch company says Burger is a signature find. It’s the spark for ramping up controversial efforts to drill off the northernmost coast of the U.S. in some of the most extreme conditions on Earth.

“This is the stuff that most of the world was finding in the 1930s, the 1950s, the 1960s, in places like Saudi Arabia and the Middle East, Nigeria,” Phelps said. “This one potential resource far outweighs any single field we’ve got in the Americas’ portfolio.”

More than in the Gulf of Mexico, where drilling rigs checker the ocean and Shell led the way into deepwater zones that produce more oil than anyone predicted.

More than in Brazil, where Shell is the second-biggest oil producer after the state energy company.

More than in Canada, where Shell is investing billions to extract thick, sticky crude from tarsands.

As a result, Shell is at the centre of a classic Alaska development battle, gearing up to explore for oil as it confronts ever-higher regulatory hurdles and court challenges by environmentalists who say a big Arctic oil spill would be a disaster.

So far, Shell has spent nearly $4 billion on leases, groundwork and specialized equipment, including a new icebreaker being built in Louisiana.

At stake are billions in oil income and the reputation of a corporation that promotes a culture of safety but has been tarnished by troubles overseas.

In a sense, Shell is an old Alaska hand. Back in the 1960s, the company was the first to produce oil in Cook Inlet waters, where it had to engineer platforms able to withstand harsh winters and severe tides. Some of those platforms still produce today. But Shell sold those interests in the late 1990s, after their heyday.

Shell was an early explorer off Alaska’s northern coast in the Arctic, but walked away from those leases in the 1990s. The company missed out on Prudhoe Bay, the most productive oilfield in the U.S.

So to many Alaskans today, Shell is an unknown quantity.

What can Alaskans expect from Royal Dutch Shell? After more than 100 years of oil exploration around the world, what is its reputation and record?

Technology has advanced over the decades to lessen the risk of drilling in the Arctic, Shell scientists say. And, they say, blowouts are unlikely here.

“The Arctic wells are really straightforward wells with few challenges on executing them,” said Williams, the chief well scientist for Shell. “They are in shallow water. They are at low pressure, and they have what we call a margin. It gives you a lot of room to operate.”