- Oil companies and industry trade groups lash out against the Obama administration plan to require rigs and time to drill relief wells in case of emergencies at their operations in U.S. Arctic waters, claiming the proposed rules would shorten an already brief window for exploratory drilling while dramatically boosting the costs of the operations.
- The group also says the proposal would lock in the “same-season relief well” requirement even though rapidly evolving technologies might be a better solution when companies lose control of an Arctic well.
- Similar arguments were delivered today by Royal Dutch Shell (RDS.A, RDS.B) and Statoil (STO), which both hold active leases in the Chukchi and Beaufort seas north of Alaska; ConocoPhilllips (NYSE:COP), another leaseholder in the area, filed comments that are not yet available.
- A key sticking point is the same-season relief well requirement - not just the proposed rules for it, but whether it should be allowed in the first place; Shell is asking the Interior Department to replace the requirement with a mandate that oil companies demonstrate they have "assets that can address a source-control event."
Oil industry rebuts proposed Arctic drilling mandates
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Comments (32)
I believe that exploration and safeguards to prevent ecological crises are NOT mutually incompatible. I may be an investor in RDS.a but I do not want profits at any cost.
"It took me about 5 minutes to figure out what POO is or was...?"Did you google it like me and references of poop were the only thing that should up lol. Our IT department is probably wondering why I'm so interested in the topic of human feces...
How is it insane? Drilling in Midland, TX is insane!! Have you gone through a west texas summer lol?! I'd prefer the arctic...
People will buy whatever is cheaper. If solar and wind becomes so popular in 10 years that it's more than natural gas, we'll just start using natural gas. When natural gas begins costing more than solar and wind, then we'll switch back. Probably how its going to play out for a long time
I'd like to see oil usage decline. Oil transport decline. Oil refining decline. Oil drilling decline.A window of opportunity exists this next decade or two for us to become more self-reliant -- self-sufficient -- as we seque' into energy-efficient renewables. Dependence on foreign oil seems to contradict these aims. I wish the Saudi's no harm, but what they do with their resources is their business. If we squander this opportunity, shame on us.
Why not? Let them squander away the only economic thing they got going for themselves. At least Saudi 'plays' friendly and actually invests in some decent things. Can't say the same for most oil exporters.
JM: Not sure if you were around in 73-74, but I was and I care not to sit in gas lines doing odd/even plate numbers again. As soon as you cede supply of anything, standby for the consequences.
Saudi plays friendly? I guess that is a relative thing. The American drillers who are going bankrupt because SA decided they were a nuisance may feel otherwise. But, their pain is nothing compared to those being slaughtered in Yemen at this very moment. That is a wholesale humanitarian disaster.
Why not save those risky assets for when we actually 'need' them. Oil is cheap. Of course the oil companies that have speculative leases are going to want to drill them... I'm typically a fan of less regulation too, but go too far and let off too much and you get your Fukushima, your Deepwater Horizon, and your Bear Sterns... Might be worth the risk if the economy is at risk due to insanely high oil ($200+).
Oil is not cheap, it's ludicrously expensive. It's cheap relative to your short adulthood, but dear relative to many decades before. $20 crude would be tremendously stimulative to the US economy and lift many out of poverty worldwide. Neither you nor I and certainly not Obama should be the arbiters of how much oil is the right amount.The only argument against Arctic drilling is disturbance to a pristine environment, but that disturbance is miniscule, virtually undetectable in the Arctic vastness. And by the way most in the oil industry, but especially geoscientists, are environmentally conscious up the wazoo, both from business self interest and direct exposure to the raw beauty of the world.Your allusion to Deepwater Horizon etc betrays a common fallacy. The actual effects of rare incidents like the Torrey Canyon, Exxon Valdez are insignificant in the context of man's general assault on nature and virtually undetectable after nature gets to work on the residues. Yum-yum. I write as one who is outraged by the harm done to individual animals in these events, but far more outraged by factory farms. The reason they are such a big deal is that they occupy a vast amount of mindspace of media with an agenda but little appreciation of or wonder at the stupendous engineering achievement of the oil industry. Just go to an offshore rig or a refinery if you get the chance and have it explained to you. You'll be astounded.Anyway the more hydrocarbon the better, the cheaper the better, the more American (and British and Canadian) the better, and if it starts coming out of your ears, the free market will adjust the supply.
"Why not save those risky assets for when we actually 'need' them."Like others said, it takes about 5-10 years before we are actually developing an offshore lease. Its not like onshore where we drill some wells in about 3 months, find oil, and start developing all within 1-2 years. If we wait till we 'need' them, then we will have to await another 5-10 years before we can actually 'use' it. These regs are BS, drilling a relief well is not a primary method of well control.
I'm actually in favor of these regulations. Big time. We have an insane amount of oil oversupply right now and there's really no need for this exploration for another decade.If global warming pans out then they will have time to drill relief wells when there's less ice floating around in a decade...
Go drill off the coast of Mexico.
Go drill off the coast of Mexico.
Good point Grant, but as both an investor and a US citizen (no I'm not a 'greenie,' I actually own some coal plays and think TSLA is a bubble), I think we need to be responsible here. We also don't need more oil supply. $200/oil and everything mainland is drying up (certainly not the case), then let's go to the Arctic and 'invade' ANWR.For now let's consume the cheapest oil and preferably drain out Saudi Arabia first. Side note, but the whole foreign oil dependence thing is another crock. Long-term strategically thinking, not to mention efficient economics, drain the cheapest oil first. Let the Middle East have their little party. The haul and 'margins' they are getting on oil now will seem like a joke in 50 years, perhaps even 20-30.
WOW!! Insane oversupply? EIA estimates a current oversupply of around 1.3MBD for a demand of 93MBD. EIA also estimates that the S/D lines will merge in 2016 (94.83MBD supply, 94.58MBD demand.