January 18, 2011
The divide that separates the energy producers from those of the environmental movement won't be bridged anytime soon. The latest flare-up pertains to Shell Oil Co. and is off the shores of Alaska and near the Arctic slope - long a symbol in the debate over whether to allow more drilling rights.
With the Obama administration focused on economic health and investment in clean technology, drilling in the Arctic has gotten the cold shoulder. It has become even truer in the aftermath of the BP oil spill. At a time of divided government, though, the area might become a place for compromise. But don't bet on it.
"The past few months have taught us all a painful lesson about the risks of offshore drilling," says Michael Brune, executive director of the Sierra Club. "An oil spill in the Arctic's broken sea ice would be impossible to respond to. This lease sale (to Shell) never should have happened. It was the product of the same broken system that led to poor oversight of BP's drilling operations."
Shell was originally to start drilling in the Beaufort Sea and Chukchi Sea - the two seas of the Arctic Ocean - last summer. Then came the BP oil spill and those plans were put on hold until the Obama administration revised how it grants leases and how companies are to drill for oil and gas off-shore.
As a result of that review, the U.S. Department of the Interior said that environmental analyses and rigorous scientific studies would be conducted off the Atlantic coastline as well as in the Arctic. Additionally, it canceled four other lease sales in the Arctic.
After tightening the screws, the administration laid the groundwork for continued development. Shell thus said it would begin drilling in July 2011. But then four groups appealed Shell's permits. The Alaska Eskimo Whaling Commission, the Center for Biological Diversity, Earth Justice and the Inupiat Community said that with all the ships that would enter the area, Shell would run afoul of the nation's Clean Air Act.
The Environmental Appeals Board agreed and said that Shell's initial petition had been too limited. But it remanded the case back to the EPA and asked it to clarify for Shell what it must do next. Shell says that it will comply with what is required of it and says that its objective is start drilling this summer.
According to Wikipedia, the region that includes the Arctic National Wildlife Refuge has the bulk of Alaska's known petroleum, and plenty of natural gas. Those resources are extracted from the area are transferred south by means of the Trans-Alaska Pipeline System to Valdez on the Pacific Ocean.
Environmental Footprint
Advocates of drilling in the Arctic Refuge say that the Obama administration needs to consider that new exploration technologies - directional drilling -- would leave a minimal footprint. Meantime, they are emphasizing that the nation must become more independent and that the area provides access to a plethora of oil and gas.
"I realize (the Arctic) has become an icon to both sides of this debate, where ideological stands too often replace (real) analysis," says Sen. Lisa Murkowski, R-Alaska, who has long touted more drilling rights, in a previous statement. "I have trouble, though, understanding how a proposal with no surface presence can impair ecological values?"
Directional drilling is a way of exploring for oil and gas where drill pipes are guided to the horizontal underground to access pools or "plays" of oil and gas far away from the drill site. Effectively it allows producers to get at multiple plays from one location, which dramatically reduces the surface footprint.
The Interior Department estimates that more than 1 million barrels of oil exist within eight miles of the western side of the Arctic Refuge, all of which is within reach of directional drilling. The U.S. Geological Survey, furthermore, says that the area could hold 10.36 billion barrels of oil and 8.6 trillion cubic feet of natural gas, and possibly more. As the technology improves, more of the refuge's resource potential could be realized, drilling proponents say.
But environmentalists maintain that millions of acres around the country have already been leased to oil and gas developers and they have yet to explore in those regions. To ask for access to untouched pristine areas is not only unnecessary but also unproductive. That's because it would take at least a decade for such supplies to come online.
As for the Arctic Refuge, green groups emphasize that Congress acted twice in 2005 to prohibit drilling there. They add that the region should stay off-limits to production. That's because the Arctic would become the tip of the iceberg and perhaps open up other national treasures to drilling.
"As a result of the Deepwater Horizon oil spill we learned a number of lessons, most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime," says Interior Secretary Salazar. "Our revised strategy lays out a careful, responsible path for meeting our nation's energy needs while protecting our oceans and coastal communities."
While the White House will compromise more, drilling in the Arctic will remain ground zero over the battle to allow more exploration. That standing will undoubtedly continue in the aftermath of the BP oil spill. New leases will be hard to come by, although Shell will eventually regain its right to produce there.
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Ken Silverstein
EnergyBiz Insider
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