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Preface. If you think we have no worries because we can get arctic oil, think again. We can’t because icebergs mow drilling platforms down in the ocean. On land, massive amounts of expensive new drilling rigs, roads, rail lines, platforms, buildings and other infrastructure need to be built, and maintained every year as permafrost soil bucks and heaves like a bronco trying to shake infrastructure off.

In the first two oil shocks in the 1970s, many intelligent people proposed we should buy oil from other nations to keep ours in the ground for when foreign oil declined. But hell no, Texas, Oklahoma, and other oil states said that we need jobs and CEO/shareholder profits more than national security. Over half of all remaining oil is in the Middle East, which China, Russia, and Europe are much closer to than the U.S.

What saved the U.S. and the world, from conventional peak oil and natural gas decline since 2005 is fracking. But fracking began to decline as early as 2020 according the first report below. The second article is about oil discoveries in the U.S. declining.

This just in: John Hess, CEO of Hess Corporation, told his audience that “key U.S. shale fields are starting to plateau” and will not the next Saudi Arabia. U.S. shale oil production has been a major driver in the growth of world oil supplies. Last year the United States accounted for 98% of global growth in oil production. Since 2008 the number is 73%. so a slowdown or decline in U.S. oil production growth would mean trouble for the whole world. With 81 percent of global oil production now in decline, even a plateau in U.S. production would likely result in a worldwide decline (Kobb 2020).

Peak Fracking in the news:

2020 U.S. Shale Oil Production – All That’s Left Is The Permian And That Won’t Last Forever Either.

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

Russia Bets Big On Arctic Oil

April 24, 2018

Russia Bets Big On Arctic Oil

Gazprom Neft, Russia’s fourth largest oil producer, has big plans for its Arctic oil operations, and it seems that neither sanctions nor production cuts can force it to quit its presence there. In fact, the oil division of Gazprom will try to turn itself into what its head of strategy and innovations called “a benchmark,” but not in terms of production. Gazprom Neft wants to become a benchmark in areas such as safety and efficiency, and most notably technology.

Arctic drilling was one of the top targets of U.S. sanctions that banned U.S. oil companies—and their European peers—from sharing technological know-how with Russian producers. This may have slowed down the progress of Gazprom Neft and others in the Arctic, but it did not put an end to it. Not that it could: Russia’s energy industry has been working on Arctic exploration for much longer than the four years since the annexation of Crimea, which became the grounds for the sanctions.

Gazprom Neft launched its first Arctic field, Prirazlomnoye, at the end of 2013, and first oil, and the new blend, ARCO, from Arctic Oil, reached markets the following year. Since then, more than 10 million barrels have been shipped from the field. Recoverable reserves at Prirazlomnoye are estimated at 540 million barrels of crude, and the peak of production is set to be reached in 2020, at 110,000 barrels per day.

The Arctic as a whole is top priority for Gazprom Neft: in 2016, two new projects got the go-ahead there. Messoyakha, which is the northernmost onshore oil field in Russia to date, is estimated to hold 470 million tons of oil and condensate. Novoportovskoye, or Novy Port, field holds an estimated 250 million tons of oil and condensate.

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

Norway Doubles Down On Arctic Oil

February 20, 2017

Norway Doubles Down On Arctic Oil

While Canada and the U.S. ban Arctic drilling for oil and gas motivated by environmental concerns, and majors such as Shell pull out of their Arctic projects due to financial pressures, Norwegian energy companies are planning to increase drilling in the country’s Arctic shelf in the Barents Sea.

It seems that the limited oil price increase that followed OPEC’s production cut deal has been enough for Statoil and Lundin to decide to allocate more funds to Arctic drilling, especially since the price rise has been accompanied by a major discovery for Lundin and a likely future major discovery for Statoil.

Lundin announced earlier this month that it had struck a deposit holding between 35 and 100 million barrels of oil equivalent in its Filicudi prospect in the southern Barents Sea. According to the company, which is exploring the prospect in partnership with Aker BP and Dea, Filicudi may contain as much as 700 million barrels of oil equivalent.

Statoil, for its part, is gearing up for a major drilling campaign focusing on what could turn out to be the largest field in Norway’s Arctic shelf: the Korpfjell field. Dubbed an elephant, Korpfjell may hold up to 10 billion barrels of crude, not least because of its immediate proximity to another promising deposit, the Perseevsky oil prospect in the Russian section of the Arctic. Perseevsky is being explored by Rosneft in partnership with Statoil.

Naturally, there is major environmental opposition to this Arctic foray: Greenpeace, Bloomberg recalls, last year launched a lawsuit against the Norwegian government for awarding exploration licenses in the Barents Sea. The case will be heard this fall.

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

With Shell’s Failure, U.S. Arctic Drilling Is Dead

September 30, 2015

With Shell’s Failure, U.S. Arctic Drilling Is Dead

Arctic Drilling in the U.S. is dead.

After more than eight years of planning and drilling, costing more than $7 billion, Royal Dutch Shell announced that it is shutting down its plans to drill for oil in the Arctic. The bombshell announcement dooms any chance of offshore oil development in the U.S. Arctic for years.

Shell said that it had completed its exploration well that it was drilling this summer, a well drilled at 6,800 feet of depth called the Burger J. Shell was focusing on the Burger prospect, located off the northwest coast of Alaska in the Chukchi Sea, which it thought could hold a massive volume of oil.

On September 28, the company announced that it had “found indications of oil and gas in the Burger J well, but these are not sufficient to warrant further exploration in the Burger prospect. The well will be sealed and abandoned in accordance with U.S. regulations.”

After the disappointing results, Shell will not try again. “Shell will now cease further exploration activity in offshore Alaska for the foreseeable future.” The company cited both the poor results from its highly touted Burger J well, but also the extraordinarily high costs of Arctic drilling, as well as the “unpredictable federal regulatory environment in offshore Alaska.”

Shell will have to take a big write-down, with charges of at least $3 billion, plus another $1.1 billion in contracts it had with rigs and supplies.

Shell’s Arctic campaign was an utter failure. It spent $7 billion over the better part of a decade, including an initial $2.1 billion just to purchase the leases from the U.S. government back in 2008. The campaign was riddled with mishaps, equipment failures, permit violations, and stiff opposition from environmental groups, including the blockading of their icebreaker in a port in Portland, OR this past summer. The FT reports that Shell executives privately admit that the environmental protests damaged the company’s reputation and had a larger impact than they had anticipated.

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

U.S. allows Shell to drill for oil in Arctic Ocean off Alaska

August 18, 2015

U.S. allows Shell to drill for oil in Arctic Ocean off Alaska

Company hopes to drill 2 wells in the Chukchi Sea by late September

The U.S. government on Monday gave Royal Dutch Shell the final permit it needs to drill for oil in the Arctic Ocean off Alaska’s northwest coast for the first time in more than two decades.

The Bureau of Safety and Environmental Enforcement announced that it approved the permit to drill below the ocean floor after the oil giant brought in a required piece of equipment to stop a possible well blowout.

The agency previously allowed Shell to begin drilling only the top sections of two wells in the Chukchi Sea because the key equipment, called a capping stack, was stuck on a vessel that needed repair in Portland, Ore.

Since the vessel arrived last week, Shell is free to drill into oil-bearing rock, estimated at 2,400 metres below the ocean floor, for the first time since its last exploratory well was drilled in 1991.

“Activities conducted offshore Alaska are being held to the highest safety, environmental protection, and emergency response standards,” agency Director Brian Salerno said in a statement Monday. “We will continue to monitor their work around the clock to ensure the utmost safety and environmental stewardship.”

Shell’s icebreaker Fennica, shown here in Portland, Ore., earlier this summer, arrived in Alaska Aug. 11 carrying vital equipment to use in the event of a blowout. Final permits for drilling hinged on its arrival. (AP Photo/Don Ryan)

Environmental groups oppose Arctic offshore drilling, saying industrial activity will harm polar bears, Pacific walrus, ice seals and threatened whales already vulnerable from climate warming and shrinking summer sea ice. They say oil companies have not demonstrated that they can clean up a spill in water choked by ice.

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Can’t Touch This: To Stave Off Climate Disaster, Arctic Oil Must Stay in Ground

August 15, 2015

Can’t Touch This: To Stave Off Climate Disaster, Arctic Oil Must Stay in Ground

‘There is no reasonable scenario in which Arctic oil drilling and a safe climate future co-exist,’ says Oil Change International in new report

U.S. Arctic oil will be exposed to increasing risks associated with mounting public opposition, marked by creative direct actions like this flotilla, says the report from Oil Change International and Greenpeace. (Photo: Backbone Campaign/flickr/cc)

Just days after Royal Dutch Shell commenced drilling at the bottom of the Chukchi Sea, two major environmental groups released a new report confirming what many activists and scientists have already warned—to avert the looming climate crisis, U.S. Arctic offshore oil should be considered “untouchable.”

“There is no reasonable scenario in which Arctic oil drilling and a safe climate future co-exist,” said report author Hannah McKinnon, senior campaigner with Oil Change International (OCI), which issued the study along with Greenpeace. “Drilling in the Arctic is a climate disaster, plain and simple.”

“The President can’t continue to leave the the fate of the Arctic—and his climate legacy—up to a disastrous corporation like Shell.”
—Tim Donaghy, Greenpeace

Untouchable: The Climate Case Against Drilling (pdf) reiterates the warning that, according to the best available science, at least three-quarters of existing fossil fuel reserves must stay in the ground in order to limit global warming to 2° Celsius. “Projects that expand or break open new reserves and generate more greenhouse gas emissions clearly fail a test of what is safe for the global climate,” the report states.

Shell Oil’s mishap-plagued hunt for oil in the Arctic is a prime example of such a project, the authors charge, given that “the only scenarios published in defense of Arctic oil exploration are consistent with at least 5 degrees Celsius of global warming—a level widely considered to be disastrous.”

Not only is Arctic drilling bad for frontline communities and the environment, it’s expensive, with Shell depending on sustained high oil prices if it wants to make a profit, the report explains. And from an investor perspective, U.S. Arctic oil is an asset that has a high risk of becoming stranded as billions are poured into exploration for a resource that experts say ultimately cannot be burned safely.

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

Senators Call For End To Arctic Drilling As Shell Gets Permits To Begin Work In Chukchi Sea

July 27, 2015

Senators Call For End To Arctic Drilling As Shell Gets Permits To Begin Work In Chukchi Sea

Shell received the final permits it needed to begin drilling exploratory wells in the Chukchi Sea last Wednesday, but a group of Senators led by Oregon’s Jeff Merkley is calling for a ban on Arctic drilling altogether.

According to the Associated Press, the permits are somewhat conditional: In granting the company the green light, the Department of the Interior said Shell can only drill the top sections of wells, or to about a depth of 1,300 feet, because critical emergency response gear, including a well-capping device in the event of a blowout or leak, will not be present for the foreseeable future.

The capping stack and other emergency gear is on board the MSV Fennica, which is in Portland, Oregon for repairs after Shell opted to send the ship out of Dutch Harbor, Alaska on July 3 via a shallow and evidently treacherous route, choosing speed over safety.

The Fennica is an icebreaker — a ship literally designed to break through ice, one of two such ships in Shell’s Arctic fleet meant to protect its drill rigs from unsafe ice conditions. But the Fennica somehow suffered a gash in its hull more than 3 feet long before even leaving the harbor and was forced to head immediately back to port.

There is no word on how long the repairs will take. When the capping stack is available to be deployed within 24 hours, aDOI spokesperson told the Associated Press, Shell can apply for an amended permit that would allow the company to drill deeper.

…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.”

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Oil and Arctic Ocean Make A Highly Troublesome Mix

June 9, 2015

Oil and Arctic Ocean Make A Highly Troublesome Mix

As the U.S. and Russia take the first halting steps to drill for oil and gas in the Arctic Ocean, experts say the harsh climate, icy seas, and lack of any infrastructure means a sizeable oil spill would be very difficult to clean up and could cause extensive environmental damage.

Last October, an unmanned barge with 950 gallons of fuel on board was in the Beaufort Sea when it broke free from the tug towing it. The weather was stormy and the tug captain decided it was too dangerous to try to retrieve the barge in turbulent seas.

Ideally, the Canadian Coast Guard would have been on hand to deal with the situation. But the icebreaker it routinely dispatches to the Beaufort Sea had gone back to Vancouver for the winter. It would have taken a week for it to return.

Krichevsky/Wikimedia Commons

The Russian oil rig Prirazlomnaya, operated by energy giant Gasprom, in the Barents Sea.

In the days that followed, powerful currents swept the barge into Alaskan waters. The U.S. Coast Guard couldn’t do anything because its one operating icebreaker was stationed in Antarctica at the time. Canadian and U.S. officials thought the barge would most likely be locked in the ice, or crushed by ice and sink. It continued to drift, however, and when satellite observers checked last month the barge was about 40 miles off Russia’s Chukchi Peninsula. Russian attempts to find the barge have been hampered, likely to due to bad weather.

As potential oil spills go, the barge incident is an extremely minor one. But experts say that the errant barge should be a wake-up call for Arctic nations like the United States, Canada, Russia, Denmark, and Norway that are poised to ramp up shipping, as well as oil and gas drilling, in the Arctic.

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We May Not See Arctic Oil For Decades

May 28, 2015

We May Not See Arctic Oil For Decades

Shell’s Arctic campaign this year will be pivotal. If the company cannot find large reserves of oil, it will likely set back Arctic oil development for a generation.

The Financial Times reported that Royal Dutch Shell will not see Arctic oil come online anytime soon, even in the best of scenarios. Even Shell officials think that the oil major will not be able to see Arctic oil hit the market until sometime in the 2030s.

There are a few reasons for this. Finding and developing offshore oil can typically take around a decade. First there is a long lead time before any drills hit the waters – analyzing data, purchasing acreage, planning, doing seismic surveys, getting permits, moving equipment into place, and finally deploying rigs. Shell first started buying up Arctic leases in 2007. After years of preparation (and huge setbacks), Shell has done most of this pre-drilling work.

Even then, once the rigs ply the icy waters, there are many years ahead before oil begins flowing. Shell has to drill test wells, analyze data, and drill more wells.

But the Arctic also presents some unique challenges not found anywhere else. First is the short drilling season. Shell wouldn’t be able to operate year round, and could only make headway a few months out of the year during the summer. Perhaps more importantly is the remote location. Without adequate infrastructure Shell would have to do a lot of building to make Arctic oil viable. That would include pipelines, processing facilities, roads, and more. The Gulf of Mexico has all of this stuff in place, which reduces the cost and risk of drilling, but the Arctic is uncharted territory.

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

What On Earth Are We Doing Looking For Oil In The Arctic?

February 18, 2015

What On Earth Are We Doing Looking For Oil In The Arctic?

Shell is back in; Statoil is pensive, but eager; and Russia is pushing ahead. Low prices have stunted exploration, but the Arctic is still a hotbed (read: marginally warm-bed) of activity. With so much to lose in the fragile and costly environment, why are we there?

One – albeit simple – answer numbers around 90 billion or 1,670 trillion depending on your business. The United States Geological Survey estimates that the area above the Arctic Circle holds 90 billion barrels (bbl) of undiscovered, technically recoverable oil and 1,670 trillion cubic feet of technically recoverable natural gas. That’s good for 13 percent of the undiscovered oil and 30 percent of the undiscovered natural gas in the world. Still, it’s not easily accessible – or easy to market – with most of the hydrocarbons occurring under the inhospitable and often frozen Arctic seas.

Another – more hopeful – answer involves the belief that the Arctic offers some semblance of a path toward energy independence. More specifically, for the largest consumer of all, the United States. US Arctic production began in earnest in the mid 70s following the ’73-74 oil embargo by the Organization of Arab Petroleum Exporting Countries, which sent prices up over 75 percent. Project Independence, as the Nixon Administration designed it, aimed to promote domestic energy independence, including the Trans-Alaska Pipeline System. Ultimately, the efficiency and production initiatives sent oil imports tumbling more than 50 percent by 1985.

Related: Arctic Oil On Life Support

Today, US shale has revived the nation’s hope of energy independence – no matter how off base it may be. Still, the Arctic’s role in furthering this goal is yet to be determined. Its oil-to-gas ratio – approximately 3:1 in favor of gas – limits any widespread appeal. Moreover, the Obama administration has been hesitant to expand leasing opportunities, instead favoring the Atlantic coast and Gulf of Mexico.

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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.

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Arctic Explorers Retreat From Hostile Waters With Oil Prices Low

January 14, 2015

Arctic Explorers Retreat From Hostile Waters With Oil Prices Low

When Statoil ASA (STL) acquired the last of three licenses off Greenland’s west coast in January 2012, oil at more than $110 a barrel made exploring the iceberg-ridden waters an attractive proposition.

Less than two years later, the price of oil had been cut by almost half and Norway’s Statoil, the world’s most active offshore Arctic explorer in 2014, relinquished its interest in all three licenses in December without drilling a single well, Knut Rostad, a spokesman for the state-controlled company, said by e-mail.

Statoil’s decision shows how the plunge in oil, with Brent crude trading at about $45 a barrel, has dealt another blow to companies and governments hoping to tap the largely unexplored Arctic. That threatens to demote the importance of a region already challenged by high costs, environmental concerns, technological obstacles and, in the case of Russia, international sanctions.

“At $50, it just doesn’t make sense,” James Henderson, a senior research fellow at the Oxford Institute for Energy Studies, said in a Jan. 12 phone interview. “Arctic exploration has almost certainly been significantly undermined for the rest of this decade.”

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

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