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But the difference between how the White House and the Prime Minister’s Office explained this announcement reveals a major rift between the leaders in their understanding of how to address the climate threat.

At the end of November, Canadian Prime Minister Justin Trudeau failed a key test of his understanding of what is required to stop climate change by approving the Kinder Morgan and Line 3 pipelines. During his speech he defended his actions:

“I have said many times that there isn’t a country in the world that would find billions of barrels of oil and leave it in the ground while there is a market for it.”

But just weeks later, the U.S. did exactly that. As part of President Obama’s announcement to permanently ban oil and gas development in the Arctic and Atlantic oceans, the White House released a fact sheet explaining its justification.

“…if lease sales were to occur and production take place, it would be at a time when the scientific realities of climate change dictate that the United States and the international community must be transitioning its energy systems away from fossil fuels.”

In essence, the White House is saying that further offshore oil and gas development in these areas fails a climate test — that these projects aren’t in line with the action needed to meet international goals to fight climate change. This is a crucial signal that President Obama and his team are finally beginning to understand that action to restrict the supply of fossil fuels is ultimately required to reach a safe climate future.

…click on the above link to read the rest of the article…

UK Govt Report: Oil Companies Drilling in the Arctic Will Find It’s Unprofitable

May 19, 2016

UK Govt Report: Oil Companies Drilling in the Arctic Will Find It’s Unprofitable

Major oil companies from the US, UK, Norway, Sweden, and Russia are all set to drill in the Arctic, but a report from the UK Ministry of Defence (MoD) suggests they may be setting themselves up for failure.

Drilling in the Arctic is “economically prohibitive,” according to the report, which was commissioned by the Swedish Armed Forces and finalized in January 2016.

In other words: The companies seeking riches from Arctic’s vast untapped oil and gas wealth are going to be disappointed.

“…It is becoming increasingly likely that low oil prices, and reducing dependence on fossil fuels, will mean that extracting much of the oil in the Arctic will be economically prohibitive,” the report says. “The strategic importance of these resources may well have been overplayed.”

If this analysis is accurate, then the Arctic scramble is doomed to backfire on the oil industry.

The report’s authors conclude that by 2035, fossil fuel extraction will be largely unprofitable

According to another MoD report published by the DCDC in December 2015, over the next 20 years, oil majors will be driven to explore expensive resources in search of new profits as reserves become more scarce, but will face increasingly prohibitive costs in extracting those resources.

By 2035, the report says, the world may face a situation of dramatic “fossil fuel scarcity” due to rising demand and production costs.

Titled Future Operating Environment 2035, the report does not represent official government policy, but will “inform UK defence and security policy makers and our armed forces more broadly.”

The report acknowledges input from US, Australian, Swedish and New Zealand defense agencies, as well as UK government departments, major defense contractors like Boeing and BAE Systems, and oil giant Shell.

Demand for a range of natural resources is likely to increase over the next two decades, the report says.

…click on the above link to read the rest of the article…

A New Era For Canadian Oil And Gas, For Better Or Worse

October 21, 2015

A New Era For Canadian Oil And Gas, For Better Or Worse

Canadian voters kicked out the conservative government in the October 19 election, a party that had been in power for a decade. Polls had predicted a slight lead for the Liberal Party, but in a surprise result, the Liberals actually won a majority of seats in parliament and will form a majority government. Most analysts had expected the Liberal Party would have had to form a coalition government, but many voters appeared to strategically vote for the frontrunner in order to ensure a loss for the conservatives. The new government of Prime Minister-designate Justin Trudeau will almost certainly be much less friendly to the oil and gas industry in Canada, though to what extent remains uncertain. Trudeau opposes Enbridge’s (NYSE: ENB) Northern Gateway Pipeline, but also backs TransCanada’s (NYSE: TRP) Keystone XL Pipeline – the latter of which could be blocked by the U.S. government. More will be known in the coming weeks. However, one clear promise from Trudeau was his plan to engage in deficit spending to goose the economy through higher investments in infrastructure.

The U.S. Department of Interior cancelled two lease sales for the Arctic, effectively ruling out new drilling for several years. The agency said that there was almost no interest from potential buyers for acreage in the Chukchi and Beaufort Seas, so it decided to scrap the lease sales. The move follows the decision from Royal Dutch Shell (NYSE: RDS.A) to abandon Arctic drilling, and without any other companies positioned to move forward, offshore drilling in the U.S. Arctic may not happen for years. In addition to cancelling the lease sales, the Obama administration also denied a request from Statoil (NYSE: STO) and Shell to allow an extension of their leases. They are set to expire in 2017 (Beaufort Sea) and 2020 (Chukchi Sea).

…click on the above link to read the rest of the article…

Field Notes to Life During the Apocalypse

September 4, 2015

Field Notes to Life During the Apocalypse

Shell’s Arctic drilling rig. Photo: Greenpeace.

When the apocalypse arrived no one knew it could be so seductive. In the Pacific Northwest global warming has meant winter days fit for lounging outside in t-shirts. Wildfires feeding on drought-stricken forests are producing surreal tangerine-orange sunlight. The heat has wreaked havoc on everything from snowpack to marine estuaries, but it is also resulting in a longer growing season and greater crop diversification.

This is not to put smiley faces on the four horseman. Humanity, after taking over the driver’s seat of evolution, has crashed it into the brick wall of industrial civilization.

Nonetheless, the apocalyptic world is what we make of it. We are now in a salvage operation where our goals are to recuperate and regenerate the disappearing world.

Blame cannot be spread equally. The culprits, the states, corporations, and institutions, are so few they can be named. For decades they have worked feverishly to block any meaningful transition away from a fossil-fuel economy. In 2015 atmospheric carbon dioxide blew past400 parts per million, the highest level in the last 23 million years, and greenhouse gas emissions are increasing. The old world, formed over hundreds of millions of years, is ending because of the sixth great extinction, deforestation, collapse of fisheries, pollution, sea-level rise, wildfires, invasive species, and coral-reef die-offs.

The new world is the “anthropocene biosphere.” Some scientists say our impact is so profound humans have initiated just the third stage of evolution in 3.8 billion years. This includes mass loss of biodiversity and homogenization of what remains. Carried on the arteries of commerce, “neobiota” like cats, rats, and mussels are so prolific they’ll be immortalized in the fossil record. We’ve broken the “photosynthetic energy barrier” with oil coal and natural gas. We have colonized or modified every ecological niche. We have reset evolution through industrial and monoculture farming, pollution, breeding, genetic technologies, and emerging synthetic biology.

…click on the above link to read the rest of the article…

Hundreds Rally in Alaska to Tell Obama ‘Climate Leaders Don’t Drill the Arctic’

September 3, 2015

Hundreds Rally in Alaska to Tell Obama ‘Climate Leaders Don’t Drill the Arctic’

Climate groups rallied in Anchorage, Alaska yesterday to demand that the U.S. government, President Obama and Alaskan leaders take the urgent action needed to stop climate change. The “Rally to Confront the Glacial Pace of Political Action” took place as President Obama met with ministers from around the world for the “GLACIER” conference.

Peggy Wilcox of Anchorage takes a selfie with Frostpaw the polar bear at the rally. Photo credit: Mark Meyer / Greenpeace

More than 300 people participated in yesterday’s rally. The groups four “demands” for political leaders include:

Support an immediate shift to the development and widespread implementation ofrenewable energy sources
Support the call by global scientists to keep 80 percent of the world’s fossil fuel reserves in the ground
Protect and champion the rights of communities of color on the front lines of climate change
Commit the U.S. to legally binding commitments at the 2015 UN Climate Change Conference

In response to the President’s visit, Faith Gemmill of RedOil said, “Indigenous peoples of Alaska have seen alarming impacts from climate change already, and Shell’s drilling will only make them worse. We’ve seen over 300 wildfires this past summer which burned throughout the state and forced communities to evacuate, as well as the very real threat of actual forced relocation of coastal communities due to coastal sea ice loss and erosion.”

The President has said again and again that climate change poses a serious threat to humanity and in going to Alaska, he is highlighting how the state is on the front lines of the fight against climate change.

…click on the above link to read the rest of the article…

Does Arctic Drilling Have A Future With Sub $50 Oil?

August 25, 2015

Does Arctic Drilling Have A Future With Sub $50 Oil?

Italian oil group ENI is expected to begin production from the Goliat Field off Norway in a few short weeks. The project, which has cost $5.6 billion, is expected to produce 34 million barrels of oil per year by the second year of production.

Yet ENI seems to be bucking the global trend, as would-be Arctic drillers in other parts of the region hand back leases or allow them to expire, citing high risks and high costs as major contributing factors. Successful environmental campaigns as well as an increased global awareness – and political will – to address climate change have also been influential.

All this against a backdrop of global oil prices below $50 a barrel and an outlook of continued oil market volatility.

With Arctic exploration and production being so expensive, the risks so great, and the current market conditions relatively unfavorable, one might ask why Shell, ENI, and others would continue.

The main reason is resource potential. The Arctic holds the last, great, untapped oil and gas reserves. The U.S. Geological Survey in 2008 estimated that the Arctic contains 22 percent of the world’s undiscovered hydrocarbon resources, totaling 90 billion barrels of oil, 1,670 trillion cubic feet of natural gas, and 44 billion barrels of natural gas liquids.

But those resrources come at a significant cost. One estimate put project costs in the Alaskan Arctic at 50 – 100 percent greater than an equivalent project in Texas.

Shell has discovered this first hand. The company has sunk $6 billion into its arctic ambitions, and experienced several high-profile setbacks, including the abandonment of its drilling campaign in the Beaufort Sea after its oil rig ran aground in 2012.

…click on the above link to read the rest of the article…

Greenwash: Shell May Remove “Oil” From Name as it Moves to Tap Arctic, Gulf of Mexico

July 12, 2015

Greenwash: Shell May Remove “Oil” From Name as it Moves to Tap Arctic, Gulf of Mexico

Shell Oil has announced it may take a page out of the BP “Beyond Petroleum” greenwashing book, rebranding itself as something other than an oil company for its United States-based unit.

Marvin Odum, director of Shell Oil’s upstream subsidiary companies in the Americas, told Bloomberg the name Shell Oil “is a little old-fashioned, I’d say, and at one point we’ll probably do something about that” during a luncheon interview with Bloomberg News co-founder Matt Winkler (beginning at 8:22) at the recently-completed Shell-sponsored Toronto Global Forum.

“Oil,” said Odum, could at some point in the near future be removed from the name.

Odum’s comments come as Shell has moved aggressively to drill for offshore oil in the Arctic and deep offshore in the Gulf of Mexico, while also maintaining a heavy footprint in Alberta’s tar sands oil patch.

Image Credit: Bloomberg News Screenshot

Shell also recently acquired BG (British Gas) Group, a company that owns numerous assets in the global liquefied natural gas (LNG) industry, transforming the company into what Forbes hailed as a “world LNG giant.”

Winkler quipped in Toronto that due to this major asset purchase, it might be more accurate to call Shell Oil, “Shell Gas.”

In October 2011, BG Group signed a major contract with the U.S.-based LNG giant Cheniere to ship its gas product obtained via hydraulic fracturing (“fracking”) to the global market. That LNG will begin to flow by the end of the year.

Just a week before Odum told Winkler that Shell may take “oil” out its company name, he appeared on Bloomberg News on the sidelines of the Aspen Ideas Festival to boast about his company’s big plans — plans to drill for oil in the deep offshore Gulf of Mexico Appomattox field. At Aspen, Odum called Appomattox a “world class oil and gas project.”

…click on the above link to read the rest of the article…

Shell Approval May Trigger Resource Race In The Arctic

May 25, 2015

Shell Approval May Trigger Resource Race In The Arctic

In a few short months Shell will (re)enter the Chukchi Sea. The oil and gas major still awaits approval from a number of state and federal agencies, but in early May the company received the consent of the Obama administration to explore the remote Arctic sea 70 miles off the coast of Alaska.

AlaskanSea

Source: Nicolas Rapp, Fortune

If it sounds familiar, that’s because it is. Shell was in the Chukchi and Beaufort Seas for much of 2012 – a stint that ended with more headaches than drilling. Following some high-profile failures with its Noble Discoverer and Kulluk rigs, Shell put its Arctic operations on pause in early 2013. Amid slumping profits, the group called off its 2014 plans to resume. Today, the economic indicators are not much better – Shell lost $1.1 billion in the Americas in the first quarter of 2015 – but the company is committed to moving forward.

One of the richest sedimentary basins in the world, the Arctic Alaska Petroleum Province is estimated to hold approximately 28 billion barrels of technically recoverable oil and 122 trillion cubic feet of non-associated gas spread across Alaska’s continental shelf and rift shoulder.

For Shell in particular, it expects the Arctic to be its biggest source of crude oil globally within the next 20 years. Estimates vary, but the Bureau of Ocean Energy Management calculates the hurdle, or breakeven, price to be roughly $38 in the Chukchi Sea. With a profit margin of around 39 percent – probably generous – Shell could be earning $1 billion or more in annual profits for each 100,000 barrels produced per day at prices not much higher than today’s.

…click on the above link to read the rest of the article…

Fight Over Shell’s Arctic Drilling Escalates As Polar Pioneer Arrives and #ShellNo “Paddle in Seattle” Begins

May 15, 2015

Fight Over Shell’s Arctic Drilling Escalates As Polar Pioneer Arrives and #ShellNo “Paddle in Seattle” Begins

shellno

Check back often as I’ll be updating this post throughout the day with photos and updates.

Here we go. Shell’s Polar Pioneer drilling rig is making its way through Puget Sound and will arrive later this afternoon at Terminal 5 in the Port of Seattle. You can watch the journey in real time if you want to follow along.

I’ll be chasing it from the bluffs and city parks near my house and then eventually plan to hop in my kayak down near T5 to witness the “unwelcome” party hosted by kayaktivists who’ve come from around the region and the world for the “Paddle in Seattle” to challenge Shell’s Arctic drilling plans this week and beyond. Then I plan to head back up to Golden Gardens park this evening for the Celebrating and Protecting the Salish Sea event featuring speakers from the host Lummi Nation and other local tribes.

Please add questions or suggestions in the comments section below and I’ll try to answer asap. Also keep an eye on the DeSmogBlog Twitter and Facebook for updates there, as well as Meerkat which I’ve just installed to tweet live video feed at opportune moments.

Timeline of updates (most recent first):

4:18pm PST Seattle is not cool with this new addition to the skyline.

2:35pm PST Well that was an unexpected and sobering surprise… I arrived at Carkeek Park to film the Polar Pioneer. It’s as massive and jaw-dropping in person as others have told me. Just as I was beginning to film, I noticed a train coming north around the bend and thought to myself ‘wouldn’t it be oddly poetic if that’s an oil train?’ ….. yup, it was.

…click on the above link to read the rest of the article…

Shell clears major hurdle for Arctic drilling

May 12, 2015

Shell clears major hurdle for Arctic drilling

Exploration plan calls for 2 ships to drill up to 6 wells northwest of Wainwright, Alaska

Just days ahead of a planned protest of Royal Dutch Shell’s Arctic drilling program in Seattle, the company on Monday cleared a major bureaucratic hurdle to drill off Alaska’s northwestern coast.

The Bureau of Ocean Energy Management approved the multi-year exploration plan in the Chukchi Sea for Shell after reviewing thousands of comments from the public, Alaska Native organizations and state and federal agencies.

“We have taken a thoughtful approach to carefully considering potential exploration in the Chukchi Sea, recognizing the significant environmental, social and ecological resources in the region and establishing high standards for the protection of this critical ecosystem, our Arctic communities, and the subsistence needs and cultural traditions of Alaska Natives,” the agency’s director, Abigail Ross Hopper, said in a statement. “As we move forward, any offshore exploratory activities will continue to be subject to rigorous safety standards.”

Before Shell can begin drilling this summer, the company must still obtain other permits from state and federal agencies, including one to drill from the Bureau of Safety and Environmental Enforcement and government opinions that find Shell can comply with terms and conditions of the Endangered Species Act.

Shell spokesman Curtis Smith said the approval “is an important milestone and signals the confidence regulators have in our plan. However, before operations can begin this summer, it’s imperative that the remainder of our permits be practical, and delivered in a timely manner.

“In the meantime, we will continue to test and prepare our contractors, assets and contingency plans against the high bar stakeholders and regulators expect of an Arctic operator,” Smith said in an email to The Associated Press.

…click on the above link to read the rest of the article…

Russia To Power Arctic Drilling With Floating Nuclear Reactors

April 28, 2015

Russia To Power Arctic Drilling With Floating Nuclear Reactors

It would sit in the icy waters of the Arctic, and provide a constant supply of electricity to a massive rig drilling for oil. They could be mass produced, potentially cutting the cost of drilling projects. The twist? The electricity on these floating power plants would come from a nuclear reactor.

Russia is looking to deploy a floating nuclear reactor that could help power ports, industries, and also offshore oil and gas drilling in the Arctic. In what sounds like a horrible nightmare for environmentalists, floating nuclear reactors could help produce more oil in the Arctic.

Russia’s reactor, called the Akademik Lomonosov, will be about the length of one and a half football fields, and will have the capacity to produce 70 megawatts of electricity. It is not self-propelled, but future mobile reactors will be. Russia plans on mass producing them once the Akademik Lomonosov proves itself. The small floating reactors will be on icebreakers, so they will be able to navigate icy Arctic waters.

Construction began on the Akademik Lomonosov in 2007, but has suffered delays. But Russia’s Deputy Prime Minister Dmitry Rogozin said during a recent trip to the Arctic that Russia hopes to have a floating nuclear reactor running by October 2016. It will provide power to the Arctic town of Pevek in the East Siberian Sea. “It is basically an atomic reactor that can be docked to coastal infrastructure, and it will provide energy through a cable to any Arctic city,” Rogozin said.

According to Russia’s state-owned nuclear firm Rosatom, at least 15 countries, including China, Algeria, Indonesia, Malaysia and Argentina, are interested in deploying floating nuclear reactors as well. In fact, last year, during Russian President Vladimir Putin’s visit to Shanghai, Russia and China signed an agreement to cooperate on building a floating nuclear power plant.

…click on the above link to read the rest of the article…

Arctic Oil On Life Support

February 2, 2015

Arctic Oil On Life Support

Oil companies have eyed the Arctic for years. With an estimated 90 billion barrels of oil lying north of the Arctic Circle, the circumpolar north is arguably the last corner of the globe that is still almost entirely unexplored.

As drilling technology advances, conventional oil reserves become harder to find, and climate change contributes to melting sea ice, the Arctic has moved up on the list of priorities in oil company board rooms.

That had companies moving north – Royal Dutch Shell off the coast of Alaska, Statoil in the Norwegian Arctic, and ExxonMobil in conjunction with Russia’s Rosneft in the Russian far north.

But achieving the goals of tapping the extensive oil reserves in the Arctic has been much harder than previously thought. Shell’s mishaps have been well-documented. The Anglo-Dutch company failed to achieve permits on time, had its drill ships run aground, and saw its oil spill containment dome “crushed like a beer can” during testing. That delayed drilling for several consecutive years.

…click on the above link to read the rest of the article…

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The report’s authors conclude that by 2035, fossil fuel extraction will be largely unprofitable

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