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Houston Chronicle: Industry praises drilling proposal

But energy giants say many offshore areas are still off-limits

By KRISTEN HAYS
Copyright 2007 Houston Chronicle

The Interior Department’s rollout Monday of a finalized proposal to open 48 million acres of off-limits federal waters for exploration and drilling drew praise from the oil and gas industry, though some said the move would barely tap vast undiscovered resources.

“Most U.S. offshore areas in the lower 48 states and some 80 percent of the Outer Continental Shelf remain off-limits to oil and gas exploration, and these areas contain vast amounts of oil and natural gas,” the American Petroleum Institute, a trade organization for the oil and gas industry, said in a statement.

Chevron Corp. called the proposal a “positive move” but noted the areas were a fraction of the 1.8 billion acres of federal jurisdictional waters, most of which remain off-limits.

“Even though the new areas are very small, and in some cases will only be offered after extensive studies have been completed and certain presidential and congressional moratoria are lifted, any new offshore areas being potentially made available provide an opportunity for some slight increases,” Chevron said.

However, Richard Charter, co-chairman of the National OCS Coalition and a marine conservation expert for Defenders of Wildlife, said oil and exploration and production companies have thousands of leases for unexplored areas in the Gulf of Mexico.

“So whenever you hear, ‘Poor us, we don’t have enough acres to explore,’ the question arises as to why they wait to explore the active leases they already own,” Charter said.

The issue centers on the Bush administration’s plan to allow companies to buy leases to explore and drill in federal waters that have not been available for drilling for decades.

The Interior Department’s proposed final plan includes 21 offshore oil and gas leases in the next five years in the Gulf of Mexico, all around the coast of Alaska, and a small area off the shore of Virginia.

Most of that space, particularly along the East and West coasts and off the west coast of Florida, remains off limits to drilling, according to the Interior Department’s Minerals Management Service, which oversees OCS activity.

Congress has two months to review the plan, “so this is not, by any stretch of the imagination, over yet,” Charter said.

Oil and gas companies currently produce about 600 million barrels of oil and condensate and 4 trillion cubic feet of gas each year in federal waters.

On Monday, Interior Secretary Dirk Kempthorne said the proposal to open some closed areas could yield 10 billion barrels of oil and 35 trillion cubic feet of gas.

“This energy production will create jobs,” he said. “It will make America less dependent on foreign energy sources.”

Several oil companies, including Exxon Mobil Corp., Chevron and BP, echoed Kempthorne’s sentiment, saying more domestic oil and gas production will help meet ever-growing demand.

But critics noted the plan could wreak environmental havoc.

U.S. Rep. Maurice Hinchey, D-N.Y., on Monday called the plan shortsighted. Last week he introduced a bill to restore a congressional moratorium on drilling in Bristol Bay off Alaska’s western coastline, which the Sierra Club calls the nation’s most important commercial fishery and home to one of the world’s largest wild salmon runs.

President Bush lifted the ban on Bristol Bay drilling in January. It had been in place since 1990 in the aftermath of the Exxon Valdez oil tanker spill in Alaska’s Prince William Sound.

“In exchange for making small profits off oil and gas drilling leases while providing its friends in Big Oil with new sources of income, the Bush administration is giving the green light to permanently scarring the environment and ecosystems of these areas, especially Bristol Bay,” Hinchey said.

Kempthorne said the plan suggests selling Bristol Bay leases near the end of the five-year plan to allow for studies to assess potential environmental impacts. Along Alaska’s northern coastline, the plan calls for selling leases in the Chukchi and Beaufort seas.

Pamela Miller, Arctic coordinator for the Northern Alaska Environmental Center, on Monday said a 25-mile buffer along the Chukchi coastline to allow for endangered bowhead whale migration is inadequate, because an oil spill “is still going to slam into the coast.”

She said leases have been sold in those seas before, but the proposal aims to sell more.

“It’s a last-ditch attempt to get the most they can for the oil industry in the Bush administration,” Miller said.

Shell spokeswoman Darci Sinclair said the plan allows Shell, which owns some leases in the Chukchi Sea, and other companies to open discussions about responsible operations in Alaska and the Gulf. The proposal isn’t a done deal, and study and talks await, Sinclair said.

“As we continue to have to go into harsher environments to recover resources, we’re going to have to employ more technology,” she said.

“That’s why this first step is so critical.”

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April 30, 2007, 11:26PM

johnadonovan wrote:

The question is can the public trust Big Oil to carry out oil and gas exploration in environmentally sensitive locations such as Alaska?

We have already witnessed the 1989 Exxon Valdez oil spill mentioned in your report. BP is currently rightly held in odium because of huge oil leaks in Alaska due to badly maintained pipeline. The track record of Royal Dutch Shell in terms of the environment (and integrity) also does not inspire confidence. The tragic explosion at a Shell Oil refinery in Norco in which six people lost their lives, Clean Air Act violations, repeated environmental infringements in Louisiana, a pipeline rupture in Washington State which resulted in an explosion and more deaths, repeated multimillion dollar fines for groundwater contamination, more fines for unauthorised venting and flaring of gas, the sale of tainted gasoline in the USA and Canada and participation in price fixing cartels. Details can be found on Wikipedia at

http://en.wikipedia.org/wiki/Controversies_surrounding_Royal_Dutch_Shell

Consequently strict oversight will be essential in the quest to find more hydrocarbon reserves in the USA.

Posted by John Donovan, co-owner of the website

http://royaldutchshellplc.com/

5/1/2007 3:12:46 AM

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

1 Comment on “Houston Chronicle: Industry praises drilling proposal”

  1. #1 tim pellett
    on May 1st, 2007 at 22:39

    I am going to post linkson parry sound .com do to the fact there are the main GASTARDS up here

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