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Shell Resumes Drilling In The Arctic
Updates
August 4, 2015: I don't think this adds much to the story but fills in some details for later use, if necessary. The AP is reporting:
Hours after a repaired Shell icebreaker eased past protesters in Oregon to join an Arctic drilling operation, the oil giant used other vessels in its flotilla to begin excavating off the coast of Alaska in hopes of confirming the presence of billions of barrels of crude below the ocean floor.
Royal Dutch Shell PLC now only needs the 380-foot Fennica, repaired at a Portland shipyard, to be on hand at the drill site to ask federal regulators for permission to dig into oil-bearing rock already included on its Arctic offshore leases.
The drilling would come over the protests of environmental groups in Portland and elsewhere who say Shell has not proved it can clean up a major spill in a region covered by ice much of the year.
Critics have decried Arctic offshore drilling since before the federal government auctioned off billions of dollars in leases to Shell and other companies in 2008. But after failed lawsuits and protests, opponents have few options to stop drilling.
Protesters seized one of their last chances this week after the Fennica was gashed by an underwater obstruction in the Aleutian Islands and sent to Portland for repairs.
Thirteen members of Greenpeace USA dangled from a bridge over the Willamette River and kayakers converged on the Fennica to block the repaired icebreaker from heading toward the Pacific Ocean and on to Alaska.
The Greenpeace protesters persisted even after a federal court judge in Anchorage ordered $2,500 hourly fines. They were finally removed by authorities. Two people were arrested.
Original Post
Oil giant Shell has resumed offshore drilling off the coast of Alaska following a two-day delay by Greenpeace activists.
The move marks the first time Shell has conducted exploratory drilling in the Arctic since 2012. Royal Dutch Shell PLC announced on Friday that drilling operations had resumed in the Chukchi Sea off the northwest coast of Alaska on Thursday afternoon.I lost the bet. I didn't think they would actually get started this season, but I'm thrilled that they did, especially after the shenanigans demonstrated by the environmentalists trying to stop Shell from moving forward.
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Canary CEO
Speaking of interviews (see link to the Kinder story above). Here's another great impression of the Bakken during the slump in prices.
Falling oil prices may have caused a slowdown of activity in and around North Dakota's resource-rich Bakken shale play – but there are surprising benefits from the downturn, according to Dan Eberhart, CEO of Canary, LLC, one of the largest privately held wellhead companies in the US.
As the global economy weakened in 2014 and the oil market swung to the supply side, particularly after OPEC refused to cut production amid an American energy glut, oil prices began a precipitous drop. Today, a barrel of West Texas Intermediate (WTI) oil – the US benchmark – has lost more than half its value compared to a year ago.
As a result of the price slide, the US oil rig count declined for 29 consecutive weeks, bottoming out in late June at 628, the lowest it had been since August 2010. Recently released data from the North Dakota Department of Mineral Resources reported 75 drilling rigs in the Bakken, or 112 fewer than a year ago.
Although the national count has rebounded slightly since, for Bakken producers who were pumping out more than 1 million barrels a day a year ago, recovery is uncertain as oil prices remain soft.
That would seem to make positive news hard to come by. But Eberhart, who spoke at the July 27-29 Bakken Conference & Expo in Grand Forks, said that during a recent visit to North Dakota he saw how energy companies and state leaders are shaking off the "bust mentality" and putting the lull to good use.
For one thing, he said, even before prices started to decline, established producers were optimizing their wells to increase productivity.
"By innovating, producers lowered their break-even points, which allowed many wells to remain viable in a low-price environment," Eberhart said. "This is one reason we're seeing crude inventories continuing to build despite the rig count falling."
In addition, North Dakota is taking advantage of the breather to catch up on infrastructure upgrades – including improvements that will help energy companies lower their operating costs, particularly those related to transportation.
Since the Bakken shale boom began in 2007, the state has struggled to keep up with infrastructure demands. Workers streaming into the western part of the state overtaxed housing, schools and other resources. Trucks hauling heavy equipment clogged rural two-lane roads never engineered to carry the kind of traffic associated with oil operations.
In February, Gov. Jack Dalrymple signed a $1.1 billion budget to improve those roads, along with sewers, schools, water treatment and other facilities. Much of the money to fund the upgrades has come from oil extraction taxes paid by energy companies.
According to Eberhart, these infrastructure improvements will help oil companies lower well development and operating costs even further.Much more at the link.
