Shell Drilling in Arctic – Less than it Seems?

July 25, 2015

shellrig1Shell Oil’s recently approved arctic drilling project, although a source of great rancor for both oil industry partisans and environmentalists, may be less than meets the eye.
One more reason to consider that the Obama administration, choosing its battles carefully, may have chosen to go ahead and let Shell beat its brains out one more time.

Houston Chronicle Fuel Fix blog:

Shell is set to launch a new round of Arctic drilling within days, after receiving critical federal permits that could force the company to halt work thousands of feet above potential oil deposits.

Under the limited Interior Department drilling permits, Shell can only focus on one well at a time, and it cannot penetrate potential oil- and gas-bearing zones some 8,000 feet underground, at least until a damaged company-contracted icebreaker returns from repairs in Oregon.

That ship, the MSV Fennica, is meant to keep ice from encroaching on Shell’s drilling operations and is designed to install critical equipment on top of a damaged well in an emergency.

Federal regulators insist that emergency capping stack must be on hand and ready to deploy within 24 hours of an incident. But they decided to follow the same approach used during Shell’s last attempt at Arctic exploration in 2012 when other emergency equipment was unavailable, by allowing initial top hole drilling only. Three years ago, that meant Shell’s wells stopped about 1,300 feet down.

The permits illustrate again the Obama administration’s struggle to balance oil and gas development on land and at sea with a green agenda, including strengthening environmental protections and combating climate change.

The drilling approval disappointed some advocates of Arctic oil exploration as well as environmentalists who say it is too risky.

The decision also was mixed news for Shell, which has already invested $7 billion and seven years pursuing a big Arctic oil discovery. While the permits allow the company to make significant headway on its Chukchi Sea wells, they also box Shell in, blocking the firm from drilling both wells simultaneously to maximize the brief open-water exploration season that starts July 15 and ends Sept. 28.

Although Shell can ask regulators for permission to drill deeper if and when the Fennica makes it to the Chukchi Sea, there is no guarantee that will be approved. And under existing wildlife protections enshrined in the drilling permits, the company is foreclosed from toggling between its two planned wells this year — so once it plugs and abandons one, it likely cannot return to it until 2016.

3 Responses to “Shell Drilling in Arctic – Less than it Seems?”

  1. dumboldguy Says:

    “…go ahead and let Shell beat its brains out one more time…” sounds like a great strategy to me.

    Seven billion $$$ and seven years and not a drop of oil yet. Let’s now go for eight+ billion and eight years. With any luck, they’ll still be drilling 1300 foot holes to nowhere when their money runs out or the bottom drops put of oil prices, whichever comes first.

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