U.S. Interior Secretary Deb Haaland announced a pair of climate-related secretarial orders on Friday, April 16, 2021. (Photo: U.S. Department of the Interior)
As the Biden administration reviews the U.S. government’s federal fossil fuels program and faces pressure to block any new dirty energy development, Interior Secretary Deb Haaland won praise from environmentalists on Friday for issuing a pair of climate-related secretarial orders.
“Today is a watershed moment in the history of the U.S. Department of the Interior,” declared Jeremy Nichols, climate and energy program director for WildEarth Guardians. “With Secretary Haaland’s actions today, it’s clear the Interior Department is now working for communities, science, and justice. We are grateful for her leadership and bold action to put people over polluters.” Continue reading →
A Shell drilling vessel drifted aground off Sitkalidak Island in the Gulf of Alaska. (Photo: Petty Officer 1st Class Sara Francis/U.S. Coast Guard)
A federal appeals court on Tuesday dealt the final blow to former President Donald Trump’s attempt to open nearly 130 million acres of territory in the Arctic and Atlantic Oceans to oil and gas drilling.
Over the decade since the Deepwater Horizon spill, thousands of scientists have analyzed its impact on the Gulf of Mexico. The spill affected many different parts of the Gulf, from coastal marshes to the deep sea.
At the Center for Integrated Modeling and Analysis of the Gulf Ecosystem, or C-IMAGE at the University of South Florida, marine scientists have been analyzing these effects since 2011. C-IMAGE has received funding from the Gulf of Mexico Research Initiative – a broad, independent research program initially funded by a US$500 million grant from BP, the company held principally responsible for the spill. Continue reading →
A controlled burn in the Gulf of Mexico off the Louisiana coast on June 9, 2010, less than two months after the catastrophic BP oil spill. (Photo: Deepwater Horizon Response/flickr/cc)
Ten years after BP’s Deepwater Horizon disaster sent hundreds of millions of gallons of oil across the Gulf of Mexico, researchers say the reach of the damage was far more significant than previously thought.
In a study published Wednesday in Science, Claire Paris-Limouzy and Igal Berenshtein of the University of Miami revealed that a significant amount of oil was never picked up in satellite images or captured by barriers that were meant to stop the spread. Continue reading →
“Like one of America’s very first national monuments, the Grand Canyon, the Northeast Canyons and Seamounts is a natural treasure,” said NRDC’s KateDesormaeu. “It provides habitat for a wide range of species, from endangered whales to Atlantic puffins to centuries-old deep-sea corals.” Photo: Wikipedia (Public domain)
Defenders of ocean habitats celebrated Friday after a federal court upheld a lower court ruling defending the right of the U.S. executive branch to set aside marine areas as national monuments.
Citing the authority found under the Antiquities Act of 1906 to establish marine national monuments, the U.S. Court of Appeals in the District of Columbia sided against a lawsuit brought by large fishing industry interests that challenged President Barack Obama’s designation of the Northeast Canyons and Seamounts Marine National Monument, which encompases 4,913 square miles of the Atlantic Ocean off the nation’s northeast coast, as a protected area.Continue reading →
Offshore oil and gas drilling has been a contentious issue in California for 50 years, ever since a rig ruptured and spilled 80,000 to 100,000 barrels of crude oil off Santa Barbara in 1969. Today it’s spurring a new debate: whether to completely dismantle 27 oil and gas platforms scattered along the southern California coast as they end their working lives, or convert the underwater sections into permanent artificial reefs for marine life.
We know that here and elsewhere, many thousands of fishes and millions of invertebrates use offshore rigs as marine habitat. Working with state fisheries agencies, energy companies have converted decommissioned oil and gas platforms into manmade reefs in the U.S. Gulf of Mexico, Brunei and Malaysia. Continue reading →
“As the Arctic warms twice as fast as the rest of the planet, it is irresponsible to permit new oil development that will only exacerbate the problem of climate change,” said Dan Ritzman, director of the Sierra Club’s Lands, Water, Wildlife Campaign. Photo: BSEE/flickr
Ignoring once more the existential necessity of keeping fossil fuels in the ground and transitioning to a global energy system powered by renewable sources, the Trump administration on Wednesday delivered another major victory for Big Oil by quietly approving a Texas company’s plan to drill in federal Arctic waters six miles off the coast of Alaska.
Kristen Monsell, ocean legal director with the Center for Biological Diversity, denounced the plan developed by Hilcorp Energy as a “disaster waiting to happen” and vowed to do everything possible to ensure that the project doesn’t move forward. Continue reading →
Rex Tillerson. Photo: premier.gov.ru [CC BY 4.0) , via Wikimedia Commons
Secretary of State Rex Tillerson—a former CEO of the world’s largest oil company—is under fire on Monday for setting aside his diplomatic duties on Sunday to accept a lifetime achievement award from the World Petroleum Congress is Istanbul, Turkey.
“Secretary Tillerson’s warped notion that it’s appropriate to attend and accept an award at an oil industry conference proves yet again that he has no idea how to be the United States’ chief diplomat,” said Greenpeace USA senior climate campaigner Naomi Ages. Continue reading →
Exxon is applying for a waiver from the U.S. Treasury Department to bypass U.S. sanctions against Russia and resume offshore drilling in the Black Sea with the Russian oil company Rosneft, the Wall Street Journal reported Wednesday.
Among those charged with deciding to grant the permit is Secretary of State Rex Tillerson, the former CEO of Exxon who previously oversaw the company’s Russia operations. Continue reading →
Arctic lands and waters hold irresistible allure for global oil companies. Despite opposition from environmental groups and President Obama’s 2016 ban on drilling in federal Arctic waters, exploration in Alaska has revealed massive new volumes of oil.
This comes at a time of low oil prices, when many observers felt the Arctic would remain off limits. Alaska has proved precisely the opposite. Although it has gone largely unnoticed outside the industry, foreign firms are partnering with American companies to pursue these new possibilities. I expect this new wave of Arctic development will help increase U.S. oil production and influence in world oil markets for at least the next several decades.
This is a global story, spurred by continued growth in world oil demand, especially in Asia; the dynamism of the oil industry; and the fact that the United States has become a major new petroleum exporter, something that would have seemed impossible only a few years ago. Such realities imply that decisions made in Washington, D.C. are far from the only forces shaping U.S. energy and climate change policy.
Fracking comes to the Arctic
Over the past year oil companies have discovered volumes on Alaska’s North Slope totaling as much as five billion barrels or more of recoverable oil. This is a 14 percent increase in U.S. proven reserves, based on recent estimates, which is no small thing.
One discovery, “Horseshoe,” made this year by the Spanish company Repsol in partnership with Denver-based Armstrong Oil and Gas, is the largest new U.S. find in more than 30 years. It is estimated at 1.2 billion barrels, and comes just after a find by ConocoPhillips in January, called “Willow,” evaluated at 300 million barrels.
Both of these are dwarfed by “Tulimaniq,” a spectacular discovery drilled by Dallas-based Caelus Energy in the shallow state waters of Smith Bay, about 120 miles northwest of Prudhoe Bay, in October 2016. Caelus has confirmed a total accumulation of as much as 10 billion barrels of light, mobile oil, with 3-4 billion barrels possibly recoverable at current prices of about US$50 per barrel.
These new finds may only be the beginning. Tulimaniq will produce from reservoirs of the same age as Horseshoe and Willow, 75 miles to the southeast. This strongly suggests that a large new stretch of the North Slope, mostly on federal land and in state waters (within three miles of shore), has been defined for further exploration. Burgundy Xploration of Houston and Australia-based 88 Energy also have another new drilling program underway to test shale intervals known to have sourced some of the oil at Prudhoe Bay, a supergiant field that has produced some 13 billion barrels to date.
A number of these new wells will be fracked – the first use of this technique in the Arctic. One or more of the oil-bearing rock units at sites being explored on the North Slope have low permeability, meaning that oil can’t flow within them very well or at all. Company engineers expect that hydraulic fracturing will be able to free such oil so it can be produced. Such has been the result for other shales and low-permeability reservoirs in places like North Dakota and Texas.
The logistics of finding large quantities of water and sand needed for fracking in the Arctic will be challenging, and probably more expensive than similar operations in the lower 48 states. It remains to be seen whether operators will clean, reuse and carefully contain frack water.
Green lights from the Trump administration
In another significant find, Italian company Eni has developed an oil field that lies in state waters, and so is not affected by Obama’s drilling ban. But the oil reservoir extends into federal waters of the Beaufort Sea. Called the Nikaitchuq Unit, it lies just west of Prudhoe Bay and is producing around 25,000 barrels per day.
Eni developed this field between 2005 and 2015 using an artificial island to drill horizontal wells in various directions from a single site. The company stopped activity in 2015 when prices collapsed, but intends to drill up to six wells this year. Its leases, which continue north into federal waters, were not automatically canceled by the federal ban, but Eni needs a federal drilling permit and has submitted an application to the Interior Department. The company plans to run a long horizontal well to access the additional oil, thereby avoiding any need for a rig in federal waters.
The Interior Department is now reviewing Eni’s application, which I expect it will approve. Geologic studies indicate that the oil continues across the state/federal boundary, and Eni’s proposal to use a horizontal lateral from an existing drill site appears to be aimed at minimizing environmental impacts.
Moreover, the Trump administration has pledged to promote fossil fuel development. Interior Secretary Ryan Zinke is a former congressman from Montana, which produces oil, gas and coal, and Alaska senators Lisa Murkowski and Dan Sullivan are strong proponents of oil and gas development.
The oil industry’s new dynamics
Why is all of this new Arctic drilling happening at a time when oil prices are low and in a place where production costs are high? The oil price collapse that has occurred since mid-2014 is the deepest slump since 1986.
Oil companies have ways of being nimble in hard times, such as selling assets, adjusting production levels and seeking mergers. Now rapid innovations in drilling, seismic imaging and data processing enable well-run companies to cut costs in multiple areas. Some firms can make money today at prices as low as $35 to $40 per barrel or even lower. This includes drilling offshore and fracking onshore.
Innovation and cost-cutting have made U.S. firms a potent global force and eroded OPEC’s dominance by keeping oil supplies high, despite a significant production cut by the cartel and many non-OPEC producers, including Russia. In this new era, smaller companies are making inroads in areas once reserved for giants like BP and Exxon. This shift is significant because smaller, independent companies, for whom new discoveries are especially important, tend to be aggressive explorers.
Oil remains our one unreplaceable energy source. Global mobility and a modern military are, as yet, inconceivable without it. Growth in global demand, centered in developing Asia, will continue for some time, as it did even from 2010 through 2014 when prices were above $90 per barrel.
The United States now exports around 5.7 million barrels per day of crude oil and refined petroleum products, double the level of five years ago and by far the largest volume in our nation’s history, thanks to major increases in sales to Japan, South Korea, India, Taiwan, Singapore and China. In short, we would be expanding fossil fuel production even without a Trump administration.
If these new discoveries become producing fields, the Alaskan Arctic will write a new chapter in the U.S. oil industry’s dramatic ascent. It will increase our leverage over OPEC and may help to counter Russia’s geopolitical influence. This prospect raises a new question: How will we will use our clout as the world’s most important new oil power?