Posts tagged “offshore drilling”
In March Senators Lisa Murkowski (R-AK) and Mary Landrieu (D-LA) introduced S. 1273, the Fixing America’s Inequities with Revenues (FAIR) Act of 2013.The bill received attention again last week, when it was reexamined during a Senate Energy and Natural Resources Committee hearing. The FAIR Act, recommends allocating a set share of 27.5 percent of total federal offshore drilling revenues to coastal states with productive drilling leases up to 200 nautical miles off their coastlines.Under the FAIR Act, states that set up funds for alternative and renewable energy, energy efficiency, or conservation would be eligible to receive an additional 10 percent of revenues, which offers states an opportunity to strengthen investments in innovation.
Unfortunately, the bill as presented is weak – it does not include any measures to directly support clean energy innovation with drilling revenue. ITIF argued in its recent report, Drilling for Clean Energy Innovation, that raising revenue from fossil fuel drilling is a direct and bipartisan way to support clean energy innovation and mitigate climate change. While the FAIR Act provides a unique incentive for states to invest in energy programs, there is little guarantee that any investment will be directed towards innovation. The proposal could be strengthened by allocating revenue to federal energy innovation programs like ARPA-E, that already direct key investments in breakthrough clean energy technology research, development, and demonstration.
Majority of Global Oil Reserves in Areas of Geopolitical Risk
The last two weeks I have been writing about deepwater oil and gas exploration and the trend to push out into deeper waters further offshore. This week I wanted to drill deeper into the drivers of this important exploration and production trend in the oil and gas industry.
Against a backdrop where 43% of global oil production is in high risk regions — the Mid-East and Africa account for 32.5% and 10.9%, respectively — and add on top of that another 16% from Russia and Venezuela, you have nearly 60% of world oil production in areas of high geopolitical risk. Looked at from another perspective, National Oil Companies control roughly 75% of proven crude oil reserves (probability that 90% of the reserves will come to production), with the remainder held generally by multinationals – IOCs.
The controversial project to begin drilling for offshore oil in the Arctic, led by Royal Dutch Shell, has gotten underway, according to a statement from the company. Preparatory drilling in the search for new oil wells began in the Chukchi Sea, about 90 miles from the Alaskan North Slope, late last month.
The project has been given tentative approval from the U.S. government that allows only for “certain limited preparatory activities” in the region, including the installation of a blowout prevention device; the stipulation regarding added protections comes following continued public anger at BP’s record-setting oil spill in the Gulf of Mexico in 2010 after a methane explosion sank a rig, leaving the unattended well to pump oil into open waters.
One of the most contentious domestic political issues in the debate between energy development and environmental policy for over 20 years has been how to develop America’s energy resources in the Arctic. As Shell makes preparations to send offshore drilling rigs into the Beaufort and Chukchi Seas north of Alaska, I thought it would be important to walk through the history of energy exploration in Alaska.
Two weeks ago, I spoke as a part of a lecture series by the Massachusetts-based Manomet Center about energy development and ecosystems in the Arctic. Manomet is a conservation sciences organization that was founded to study migratory shorebirds; I was paired in the lecture with Stephen Brown, one of Manomet’s foremost experts on Alaskan shorebirds. The event was very interesting because it allowed a frank and open discussion of the threats and opportunities in the Arctic. The discussion below is adapted from my presentation.
A Plan to Phase Out “Dirty” Energy After the Deepwater Horizon spill in the Gulf of Mexico, someone said to me “We have to stop all offshore drilling.” My response was that I could get behind that idea, but I wanted to know what sacrifices the person was willing to make. That turned out to be the end of the conversation, because usually the people campaigning against these sorts of things believe that the consequences will be all good (no more oil spills) with no real downside (like less energy available). I can tell you with absolute certainty that we can live with no offshore drilling, but I can also tell you that the price of your fuel would be… Continue»
The following guest post is from OilPrice.com. ———————————— Who, How, and Why: $140 Oil and $5 Gas According to a loosely-organized apocalyptic Christian movement, May 21, 2011 will be the “end of days.” On or about that same date, the price of oil in the United States will begin to climb to $4 a gallon, according to two savants of the oil industry. The former is highly unlikely but the latter is very probable. The escalation in the price of oil is predicted by the legendary oil man T. Boone Pickens, known for his financial acuity as well as his oil expertise, and John Hofmeister, who retired as president of Shell Oil Company, to sound the alarm about the rate… Continue»
Shortly after the Deepwater Horizon disaster in the Gulf of Mexico, I wrote the following: BP’s Oil Rig Disaster May Bring an End to Support for New Offshore Exploration “I believe the long term implications of this incident will be to exacerbate our slide down the backside of peak oil. Fields take a long time to develop, and fields being developed now may have been producing oil in 5 or 10 years. But I believe this window of opportunity has now closed, and it will be much more difficult to find broad support for expanded drilling.” I held this view because I believed the disaster would sharply shift the debate on drilling, giving drilling opponents fresh ammunition and pushing even… Continue»
Signs of Recovery While it will only be with years of hindsight that we can determine the total environmental impact of the Macondo blowout in the Gulf of Mexico, there are encouraging signs that the environmental devastation will be less severe than many had feared. Today a reader sent me this encouraging story: Oil spill area coming back to life More than a dozen scientists interviewed by The Associated Press say the marsh here and across the Louisiana coast is healing itself, giving them hope delicate wetlands might weather the worst offshore spill in US history better than they had feared. Some marshland could be lost, but the amount appears to be small compared with what the coast loses every… Continue»
It was about six weeks ago that the man I work for walked into my office and asked what was happening in the world of energy. “This oil leak in the Gulf of Mexico”, I told him, “is going to be a monumental disaster.” He hadn’t heard about it yet, but my views on it at the time were 1). They weren’t going to have an easy time getting the leak stopped; 2). It would drastically shift the debate on offshore drilling. I published an essay on the spill shortly after it happened in which I predicted that this would be a death blow for deepwater drilling in the U.S. Only time will tell on that one, but it has… Continue»
Under normal circumstances, I would be all over the story of last week’s BP oil rig disaster. By now, you all know that BP suffered an explosion and a fire in the Gulf of Mexico in which lives were lost and an unprecedented leak a mile below the surface of the ocean is occurring. Because of pressing deadlines (which after this week should be dealt with) I have barely kept up with any news at all. But as I watched the news trickle in over this, I couldn’t help but think the implications will be very far-reaching. There are a number of angles in this story. It highlights the fact that the oil industry can be very dangerous, and accidents… Continue»