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Alaska Needs To Move Forward with Offshore Drilling

|Includes:Royal Dutch Shell plc (RDS.A)
http://online.wsj.com/article/BT-CO-20100518-714632.html?mod=dist_smartbrief

"In a letter to the Interior Department, Shell Oil Co. President Marvin Odum said the company has separate "blowout contingency plans" for the Chukchi and Beaufort Seas, and that the company has on-site and onshore oil-spill response teams that will be able to respond to an oil spill in an hour.

Odum sent the letter in response to a request by the Interior Department for oil producers to show that their drilling plans are safe and aren't vulnerable to the same kinds of problems that led to the oil spill in the Gulf of Mexico after the Deepwater Horizon drilling rig sank on April 22.

Shell said it plans to drill in 150 feet of water to a depth of 7,000 to 8,000 feet in the Chukchi Sea, and as deep as 10,200 feet in the Beaufort Sea. At the Deepwater Horizon rig, by contrast, BP PLC (BP, BP.LN) was drilling in 5,000 feet of water to a depth of 18,000 feet, Odum wrote. He added that the pressure in the areas Shell plans to drill in Alaska is much lower than that in the deep waters of the Gulf.

In the "highly unlikely" event that Shell's drilling riser fails, "the remaining drilling fluid below the sea floor would effectively stop any well flow in such a low-pressure system," Odum wrote in the letter."

"U.S. Department of the Interior officials have approved Shell's drilling plans in Alaska, but have withheld signing off on the permits following the disaster in the Gulf of Mexico."


Here is an excellent example of our federal government interfering with the State and with industry.  The spill in the gulf is tragic, 11 people lost their lives and the spill will take years to clean up.  However, comparing drilling in 5,000 feet of water and drilling to 18,000 feet with type of work Shell intends to do for Alaska is insane.

95%+ of our transportation runs on hydrocarbons, currently we produce less than 1/3 of the oil needed to handle this and import the rest.  Most of the producing countries don't like us very much, yet when solid companies like Shell want to produce in the United States we make it difficult for them to get started. 

Shell can operate anywhere in the World, they are UK based but have been responsible partners for the State of Alaska and United States for years.  Let's not let the tragedy that is the Deep Horizon cause us to chase our partners away and subject us all to even greater influence from producing countries like Saudi Arabia.



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Stocks: RDS.A