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The Huffington Post: Royal Dutch Shell’s ‘New Heartland’, Alaskan Drilling Rights, The Abject Surrender of Our National Patrimony

Posted February 25, 2008 | 06:15 AM (EST)

By Raymond J. Learsy

Earlier this month, Royal Dutch Shell, coming off the most rapacious quarter in its history with a 60% increase in earnings to $8.47 billion spurred on in large measure on by OPEC induced crude oil prices, announced that it had successfully obtained the drilling rights to 275 lease blocks in the Chukchi Sea offshore northwest Alaska. These new  lease holdings together with Shell’s lease holdings in the Beaufort Sea moved David Lawrence, Shell’s Executive Vice President Exploration to triumphantly exclaim they have the “potential of becoming a new heartland for Shell”.

And there, in a nutshell you have it. What was once the national patrimony of all Americans is now becoming the new ‘heartland’ for Royal Dutch Shell.To give you a sense of the giveaway, the Minerals Management Service, the federal agency responsible for the auction covering 29.7 million acres has estimated that the area contains 15 billion barrels of “conventionally recoverable” oil and 77 trillion cubic feet of conventionally recoverable gas. Shell, as the high bidder, is proudly proclaiming it is paying $2.1 billion for the leases. Leases that appear certain to be in the most prolific areas of the Chuckchi Sea. That amounts to a grand cost of 14 cents a barrel permitting access to the potential of some 15 billion barrels of a commodity now selling near $100/bbl.

Yes, there will be development and drilling costs but nothing even closely approaching the avalanche of prospective revenues from the oil an gas when all is said and done.

By the way, if these numbers become too overwhelming for you, at today’s prices the market value of 15 billion barrels of oil is about $1.5 trillion dollars ($1,500,000,000,000). And that’s not counting the 77 trillion cubic feet of natural gas. The risk reward ratio is so staggering, that with house odds such as these, Las Vegas would have been out of business years ago.

Perhaps a little insight into the agency whose talents were able to organize stripping this resource from our patrimony to the moneyed and vested interests of a senior player of the oil patch coven, might well be edifying. The Minerals Management Service, the federal agency responsible for this boondoggle (over the objections of conservation groups and the Inupiat Community of the Artic Slope)) is a division of our trusted Department of the Interior whose reputation was cause for Earl Deveney, the Interior Department’s Inspector General to comment in exasperation at the Agency’s fostering of a culture of “management irresponsibility” that tolerated conflicts of interest, to the point “Short of crime, anything goes at the Department of the Interior”. Not to be outdone Rep. George
Miller (D. California) felt moved to comment, “If things keep going like this we’re going to need two sets of handcuffs, one for the oil companies and one for the bureaucrats”.

But wait, it gets better. This begins to read like a ‘whodunit?’ Three guesses. Who serves as General Counsel for Shell? You probably nailed it. None other than Gale Norton, who served for five years as President Bush’s Secretary of the Department of the Interior. If only Sherlock Holmes were around to do justice to all of this.

Cause and effect? Who knows, but given the incestuous traditions between the oil companies, this oil addled Administration and the Department of the Interior, one can bet that we, the public, will be getting short shrift. That the bulk of the wealth derived from the development of these public lands will land on Royal Dutch Shells bottom line and not in the public purse. We will be paying for the oil twice. Once through the giveaway at the well, and again at the pump when we buy it back through the price of gasoline.

How much better served we would be, how much more assured we would feel if we knew our national resources remained in the public domain and were under the stewardship of a National Oil Trust. That such a trust would be empowered to manage, with particular environmental sensitivity, the enormous and still untapped energy reserves located on our public lands and underneath the oceans off our continental shelf.

As pointed out in a previous post (An Energy Agenda For a New Age: Time For a National Oil Trust” 11.20.06) the National Oil Trust could be modeled after Norway’s Petroleum Directorate whose stated objective is to create the greatest public value for Norwegian society from Norway’s oil and gas deposits. The Norwegian government also created a national oil company, Statoil, whose prime function was the marketing and distribution of the Norwegian State’s direct interest in each production operation. The Norwegian State owns 70 share interest in Statoil, the balance owned by investors worldwide including a broad array of global market funds. Profits from the oil and gas operations accrue to the Norwegian Government’s Pension Fund and is invested in conservative bond and stocks. Were we to have a similar structure the trust could be mandated to direct investments toward developing a full range of alternative energy sources and to expand our mass transportation. It could well become the cornerstone of a viable program aimed at breaking our environmentally suicidal addiction to fossil fuels

But then again the Shells, Exxons, Chevrons and the oil patch generally have far greater sway over our ‘elected’ representatives in Washington than the rest of us. ‘They’ with their ‘K’ Street honchos and their politico money raising talents. ‘They’ have exercised this mordant influence for years and it is well past time that they be held to account!

http://www.huffingtonpost.com/raymond-j-learsy/royal-dutch-shells-new-_b_88250.html

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.

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