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Last year at this time, Royal Dutch Shell had just managed
to get the Kulluk, its conical
drilling rig, pulled off a beach in the Gulf of Alaska after a stormy
grounding. With the oil giant’s other Arctic drilling rig, the drillship Noble Discoverer,
also out of
commission, Shell’s plans for Arctic operations during the summer of
2013
quickly went down the toilet. - See more at:
http://www.workboat.com/Blogs/Buls-Eye/Shell-s-Arctic-plans-hit-by-court-ruling/?utm_source=NewsLinks&utm_medium=Email&utm_campaign=InformzNews#sthash.IJFFkRpa.dpuf
Last year at this time, Royal Dutch Shell had just managed
to get the Kulluk, its conical drilling rig, pulled off a beach in the Gulf of
Alaska after a stormy grounding. With the oil giant’s other Arctic drilling
rig, the drillship Noble Discoverer, also out of commission, Shell’s plans for
Arctic operations during the summer of 2013 quickly went down the toilet. - In
the aftermath of a clumsy 2012 and an inactive 2013 season, Shell’s Arctic
prospects for 2014 had been narrowed down to just one area, the Chukchi Sea.
That's if all the puzzle pieces fit together.
But they don’t, at least according to the Ninth Circuit
Court of Appeals. Last week, the San Francisco-based court ruled that Shell’s
2008 lease in the Chukchi underestimated the amount of recoverable oil and
therefore invalidated plans to mitigate potential damages from its production.
The court ruling stemmed from a lawsuit filed by several environmental
organizations and Native Alaska groups. Shell, ConocoPhillips, Statoil and the
state of Alaska defended the federal government’s leases.
The ruling, a 2-1 split by a panel of three judges, sends
the matter back to a district judge in Alaska to determine what happens next.
Presumably, the judge could revoke the entire lease or he could require that
new environmental impact studies be performed based on a more accurate estimate
of recoverable oil.
Shell’s response has been a terse, “We are reviewing the
opinion.”
To date, Shell has spent over $5 billion attempting to drill
exploratory wells in Arctic waters, including over $1 million in fines for
air-quality violations from the Kulluk and Noble Discoverer.
U.S. Sen. Mark Begich, D-Alaska, released a statement in
response to the ruling that he doesn’t think it will derail 2014 exploration.
“Alaskans know how to develop our resources and that is why I continue to be
optimistic that we will see safe, responsible development in the Arctic this
summer,” he said.
Personally, I think any further exploration this summer in
unlikely. The pressure against drilling has grown stronger with the court’s
ruling and Shell’s ability to push back convincingly is diminished. The company
didn’t bring its “A” game to the Arctic in 2012, and I don’t see much evidence
of major improvements.
Post to be found at:
http://www.workboat.com/Blogs/Buls-Eye/Shell-s-Arctic-plans-hit-by-court-ruling/?utm_source=NewsLinks&utm_medium=Email&utm_campaign=InformzNews
January 28, 2014
January 28, 2014
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