In
an effort to protect the Bowhead Whales that migrate through the magnificent
Beaufort Sea, Shell gasoline in 2007 was not granted permission to drill for
oil in this area. Shell was planning on
spending hundred of millions of dollars to make this one of their largest areas
for production. Their main target was the Camden Bay area. The Camden Bay is
located on the eastern side of the Beaufort Sea. This Bay also happens to be
right off the shore of the Artic National Wildlife Refuge. In the middle of the
1980’s a company called Hammerhead (now Sivulliq) drilled in this same area.
Shell believes this area contains somewhere between 100 and 200 million barrels
of oil. In 2007 Shell had planned to look for seismic activities and start
making around three wells for exploration purposes.
A hearing stated that Shell is not allowed to start this
drilling process until they receive proper merit. The hearing was started by
Native Alaskan as well as convervation groups who sued Shell. The hearing took
place in the 9th Circuit Court of Appeals in San Francisco on
Tuesday August 21, 2007. They told the thee-judge panel that drilling here
would disrupt the whales. While they didn’t ask for Shell to completely stop,
they did say that the drilling needs to put off till they review the merit of
the case. The court made it’s decision
Wednesday, agreeing with the people. Because of this Shell wasn’t allowed to
start the process this same year. Shell didn’t take this as a huge set-back,
instead they set forward and making plans to get around these groups.
This is the beginning of the story, when it all began. I
saw this article in a McGraw Hill magazine. It definitely took the side that
Shell was in the wrong for trying to drill in Alaska. It talks in a tone that implies
environmentalists are correct in not wanting Shell to drill. [i]
I saw the next part to the story on The Washington Post’s website. This is a
more political website. I thought it was taking more of the governments in the
right side. It took a lot more positive quotes saying how it’ll create more
jobs and help domesticize oil.[ii]
Four and a half billion dollars later, Shell is ready to
start their drilling process. Lieutenant
Governor Mead Treadwell compared this to Christmas, they’re just waiting for
santa. Shell is now planning to drill in the Chukchi Sea. They have high hopes
that there will be a large quantity of oil thousands of feet below the
surface. Shell petitioned against the
Environment Protection Agency to get rid of a law they had about air emissions.
Finally, Shells new ship the Noble Discoverer went out to sea.
While the environmentalists are having huge problems with
global warming, this is a huge advantage to Shell. With the ice melting and
warmer temperatures, the oil is more accessible than ever. The Environmental
Protection Agency is still trying to stop them. Shell originally was planning
on having five or six wells, however the Obama Administration put some
last-minute challenges making it impossible for them to have more than two says
the vice president of Shell, Pete Slaiby. He is still very optimistic about
drilling though, saying they only need a few more permits. The Obama
Administrations support for Shell has gotten them a lot of trouble from groups
to protect the environment, claiming drilling in Alaska is unsafe. Adam
Fetcher, the interior spokesperson, claims that Shell had to go through the
toughest permits in history. They say this is because of the BP oil spill.
Due to a really harsh winter, Shell had to delay their
drilling. There were too many layers of ice for them to drill through. The
senator Shell, Lisa Murkowski said Shell might be postponed even a year. If Shell succeeds in getting all the permits
and everything they need, they’ll be able to start producing oil in 10 years.
Then the next reporting of the Shell story was found on The
Washington Post as well. This was also more positive. This talked more about
the logistics. The money involved, how much oil will be produced, and things
along those lines. It was also written in a more positive tone. Even though
Shell had setbacks, they would still be on the right track.[iii]
On August 31st 2012,
Shell got the approval they were waiting for to start getting the oil reported
Ken Salazar. However, they can’t start the real drilling process. They are only
allowed to do what is called a mud-line cellar. What this is, is a 40-feet-deep
structure that is needed to make a blowout preventer. A blowout preventer is
used to help get rid of spills. This means that they still aren’t allowed to
drill into the oil-bearing reservoirs, the reservoirs are still 4,000 feet
deeper than they are drilling.
The permission for Shell was sped up
because of the limited drilling season. Shell is only allowed to drill during
the open-water season because after this the ice comes back. Shell is still
waiting for the Artic Challenger to get approved by the Bureau of Safety and
Environmental Enforcement. Getting it approved is the easy part, this simply
takes around 4 days. But, actually getting it to the drilling spot, the coastal
Inuit Town of Wainwright, will take at least two weeks. Then, building the well
takes another 24 days. If all this isn’t completed in time, Shell can not
drill.
Michael LeVine, a Pacific legal
counsel at Oceana member, said “The
Department of Interior should not be bending over backward to accommodate a
company that simply cannot get its act together. The window is closing and the
company doesn’t have anyone to blame but itself.” LeVine does not want Shell
getting a deadline on their drilling deadline that the Obama Administration is
approving. Shell replied with, “We
appreciate the efford the Department of Interior had made to understand,
scrutinize and support the project of national significance.” Senator of
Alaska, Lisa Murkowski, thinks they are moving in the right direction, “while
we would all like to see a discovery this summer, the most important thing is for
shell to continue to make progress and demonstrate once again that Artic
drilling can be done safely.”
The penultimate part to the story I
read on The Telegraph, a publication from the United Kingdom. I thought it was interesting
having a different countries opinion since it’s not as much to their advantage
to have the United States producing their own oil. The Telegraph wrote in a
more negative tone. They talked a lot about the set-backs and all the problems
Shell was having. In the future a United Kingdom oil company is planning on
bidding on a land lease in Alaska, so it’s in their best interest for Shell to
fail at getting the oil out of Alaska so they can have it.[iv]
On September 17th, 2012,
Shell announced they wouldn’t be meeting the deadlines and would have to
postpone drilling til 2013. One of Shells representatives thinks what might
have happened is gas could have gotten trapped in the dome causing it to shake.
The test took place in Puget Sound on the Artic Challenger. One of their domes
used to contain spills was damaged during a test. Shell said one of the
mechanical devices malfunctioned as it was being put in the water.
Environmentalists were thrilled by this setback. They also used this to
foundation their argument that if Shell can’t handle the calm waters in a test
they can’t be trusted in the unpredictable deep Artic waters. In the deep artic
waters they have high wind gusts and strong ice floes.
Unlike the environmentalists, the Obama
Administration continued to defend Shell. They support the drilling because
they want to expand oil production inside the United States. They applauded
Shell for admitting their accident. Ken Salazar said “Through Shell’s efforts,
tremendous progress has been made and valuable lessons will be learned as the
company carefully and deliberately moves forward with Artic exploration
activities. As part of President Obama’s all-of-the-above energy strategy, we
look forward to continuing to work with Shell.” To this one environmentalist,
Brendan Cummings, a senior on the counsel for the Center for Biological
Diversity said, “This reaffirms Shell was clearly not ready to drill this
summer, and no matter how much the Obama administration was willing to lower
the bar for them, they were not able to cross it. It opens the door to further
challenges in the court and elsewhere.” The Center for Biological Diversity has
brought Shell to court before over them drilling in Alaska.
This hasn’t been their only setback
along the way. They had issues getting permits, electrical problems, and other
things that prevented the Coast Guard from giving them approval.
Shell was able to begin drilling
their first holes but didn’t get as far as drilling the exploratory holes that
would hold the oil by the October deadline. Shell still has permission to keep
building preliminary holes. These preliminary holes don’t require a containment
dome because they are thousands of feet above where the oil and gas is located.
Inside the preliminary holes is where Shell will store emergency equipment
needed to shut down the systems in an emergency. After they finish drilling them they will
simply put a cap on them till the next summer. Shells final statement was
optimistic saying, “we look forward to the final receipt of our drilling
permits for the multiyear exploration program upon the successful testing and
deployment of the Artic Containment System.”
The final piece to the story is on
The Business Monitor Online. A business magazine of course focused on potential
job growth and money more so than the others. It also talks about the issue in
a more neutral tone while talking more about the future and other companies. [v]
On December 31st 2012,
yet another obstacle hit Shell. One of its ships The Kulluk was ran offshore
because extreme weather caused it to separate from it’s tow ship. Luckily, the
ship didn’t leak anything damaging the wildlife. The ship costs 300 million dollars so any
damages will cause even further setbacks, the ship was sent to Seattle for
further inspection. Even though the other ship, Noble Discoverer, is still
usable they can’t start drilling. Artic drilling rules state that all companies
need to have two ships in case one fails.
Even
with all this having happened, Shell still plans to start drilling in Alaska.
They have already spent four and a half billion dollars to try to make this
work. Also, they are in a hurry because ConocoPhillips as well as a Norwegian
company Statoil have both made plans to start drilling in the Chukchi Sea in
2014.
[i] http://www.lexisnexis.com/lnacui2api/returnTo.do?returnToKey=20_T16819902399
[ii] http://www.lexisnexis.com/lnacui2api/results/docview/docview.do?docLinkInd=true&risb=21_T16819900956&format=GNBFI&sort=DATE,A,H&startDocNo=1&resultsUrlKey=29_T16819895927&cisb=22_T16819900939&treeMax=true&treeWidth=0&csi=8075&docNo=17
[iii] http://www.lexisnexis.com/lnacui2api/results/docview/docview.do?docLinkInd=true&risb=21_T16819900956&format=GNBFI&sort=DATE,A,H&startDocNo=1&resultsUrlKey=29_T16819895927&cisb=22_T16819900939&treeMax=true&treeWidth=0&csi=8075&docNo=18
[iv] http://www.lexisnexis.com/lnacui2api/results/docview/docview.do?docLinkInd=true&risb=21_T16819900956&format=GNBFI&sort=DATE,A,H&startDocNo=1&resultsUrlKey=29_T16819895927&cisb=22_T16819900939&treeMax=true&treeWidth=0&csi=389195&docNo=20
[v] http://www.lexisnexis.com/lnacui2api/results/docview/docview.do?docLinkInd=true&risb=21_T16819900956&format=GNBFI&sort=DATE,A,H&startDocNo=1&resultsUrlKey=29_T16819895927&cisb=22_T16819900939&treeMax=true&treeWidth=0&csi=252475&docNo=21
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