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Oil hunt raises risk of climate disaster

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By Peter Husk: Saturday May 23, 2015

There’s an Alice-in-Wonderland quality about Royal Dutch Shell’s attitude towards the risks involved in its plan to drill for oil in the US Arctic.

The decision has sparked protests in Seattle, where the Polar Pioneer, one of two rigs the Anglo-Dutch oil giant intends to use, is berthed.

Shell sees the risks in its plan as financial. Critics see a far worse threat to the world’s climate.

Another rig, the Noble Discoverer, is docked along the coast at Everett. Both vessels are expected to sail north to Alaska next month and start exploratory drilling in the Chukchi prospect, between the United States and Russia, in late July.

The weather gives them a small window, as they must quit the area by late September to escape the long Arctic winter. Shell still needs some US and Alaska permits but no problems are expected.

The only uncertainty is an environmental lawsuit before the 9th Circuit Court of Appeals in San Francisco. If the plaintiffs win, a long shot, Shell may miss another season.

In January, Shell chief executive Ben van Beurden said the company would spend US$1 billion ($1.35 billion) this year seeking Arctic oil. Greenpeace, which has long fought the project, warned that the company was taking a “massive risk” in a pristine region.

Shell has spent US$6 billion on its Arctic venture, but mothballed the project in 2012 after a drill barge, the Kulluk, went aground and was scrapped and a rig caught fire.

A 2013 US Interior Department report said “Shell’s difficulties have raised serious questions regarding its ability to operate safely and responsibly in the challenging and unpredictable conditions offshore Alaska”.

It cited Shell’s “lack of adequate preparation”, “significant violations” on the Noble Discoverer and oversight deficiencies.

But in March, US Interior Secretary Sally Jewell gave Shell permission to begin exploration. The world oil price has plummeted but Shell is convinced it will rally again.

Speaking to the BBC in January, van Beurden acknowledged Shell’s Arctic plan “is an issue that divides society”. But he said more hydrocarbons were needed to meet world energy demands, forecast to double by mid-century.

The Arctic may be the last great oil and gas “elephant”. In 2008 the US Geological Survey estimated it held 90 billion barrels of oil and 1670 trillion cubic feet of natural gas – about 22 per cent of the “technically recoverable” resources in the world.

The International Energy Agency said this year the world was using more than 34 billion barrels a year. So the Arctic holds just under three years of oil supply at present levels of consumption. Other estimates vary from 24 to 166 billion barrels, or just under a year to five years’ supply.

Russia began extracting Arctic oil with its Prirazlomnaya project in 2013. Other Arctic-area nations are keen to catch up. Shell hopes to be extracting oil in five to six years.

The risks of drilling in the fragile Arctic are well known. The lawsuit before the 9th Circuit Court is about Shell’s oil spill response plan.

Critics say it is not a question of if, but when, there will be a spill.

“People will make mistakes, and equipment will fail,” said Rick Steiner, a marine conservation scientist with Oasis Earth in Anchorage.

“We probably will have a major spill, if not from the exploration phase then certainly during the production phase.”

In February, the US Bureau of Ocean Energy Management predicted there was “a 75 per cent chance of one or more major spills” in the Chukchi and Beaufort seas, where Shell plans to restart drilling.

The US Audubon Society says a spill could devastate wildlife.

It took months to cap the 2010 BP Deepwater Horizon spill in the Gulf of Mexico, a benign environment close to Louisiana.

A blowout in the remote Arctic, where the narrow weather window leaves little time to cap a well and clean up a spill, could be catastrophic.

Steiner cites the 1989 Exxon Valdez spill in Alaska to show that in a very cold habitat with “slow degradation rates, oil would persist in the Arctic environment for decades”, with devastating effects on wildlife.

Even if there are no spills – which is unlikely – wildlife will face disturbance from seismic exploration and other industrial activity, noise that has been linked to strandings of whales and other marine mammals.

Shell’s environmental record is poor. In January it agreed to pay US$84 million to clean up two spills, in 2008 and 2009, in the Niger Delta.

Arctic blowouts, spills and wildlife degradation may seem far away. But Shell’s project, and the prospect of others, has deep climate change implications.

The UN Intergovernmental Panel on Climate Change says the global mean temperature must rise no more than 2C to avoid opening the gateway to dangerous climate change.

This means much of the world’s hydrocarbon reserves must stay in the ground. How much must stay is uncertain, as other greenhouse gases, such as methane, also warm our climate and some carbon emissions are absorbed by plant and ocean sinks.

Shell’s “New Lens Scenarios”, issued before the company’s annual meeting this week, cites an IEA forecast that suggests the world temperature will eventually rise by 6C.

Shell said it did “not see governments taking the steps now that are consistent with the 2C scenario.”

So why should Shell ignore Arctic plunder? The Obama Administration has boosted renewables and talked the talk on climate change – most dramatically by announcing with China last year that both would reduce their CO2 emissions – but it has also expanded offshore oil and gas drilling on the US outer shelf in the Atlantic, Pacific, Gulf of Mexico and Arctic and allowed fracking on some federal land.

Shell and governments are ignoring some hard truths.

Last month the amount of CO2 in the earth’s atmosphere reached 403.26 parts per million. The safe level to avoid possibly catastrophic climate change is 350 ppm.

Steiner believes it may be “game over” for our climate if Arctic fossil fuels are used.

In a calculation with the US Environmental Protection Agency, using USGS oil and gas estimates, he estimated it would release 170 billion tons of CO2, about five times the annual emissions from human use.

It is a cruel irony that Shell’s Arctic project is possible only because climate change is melting ice. Drilling will exacerbate warming.

A risk assessment report cited by the Brookings Institute says the cost of mitigating climate change in the US will run to “hundreds of billions of dollars” by 2100.

Which begs the question: will projects such as Shell’s Arctic gamble become too costly for economies to bear? Should the annual US$550 billion fossil fuel subsidy go to renewables, as the IPCC suggests? Shell’s Arctic quest might prove to be a poisoned chalice.

Only a fraction of oil cleaned up after pipeline rupture

More than 31,418 litres of oil has been raked, skimmed and vacuumed from a spill along 15km of California coast.

But the amount was only a fraction of the sticky crude that flowed from a ruptured pipeline.

Up to 400,000 litres may have leaked from the pipeline on Thursday, and up to 80,000 litres reached the sea just northwest of Santa Barbara, the pipeline operator said.

The environmental impact was still being assessed, but there had been no immediate evidence of widespread harm to birds and sea life.

The early toll on wildlife included five oil-covered pelicans, which were taken in to be cleaned.

Biologists counted dead fish and crustaceans along sandy beaches and rocky shores.

Workers in protective suits shovelled black sludge off beaches, and boats towed booms into place to corral two oil slicks.

More than 300 people were working on the clean-up, and 18 boats were containing the slicks.

– NZ Herald, AP

By Peter Husk

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