Arctic Drilling Won’t be a Slam Dunk for Trump

May 8, 2017

Much to do about the Trump administration’s announced plans to open up large new areas to offshore drilling.
Yeah, well, good luck with that off the US coast with an aroused populace ready to tar and feather local lawmakers who go along with the Trump’s earth-killing agenda.

Also, important to remember – just because ice is going away in the arctic, doesn’t mean it’s getting any easier up there.  See the interview with Arctic sea ice expert David Barber that starts about 1:25 in above – as ice pulls back, areas that were once predictable have now become hazardous in ways unexpected a few years ago.

Add that to sluggish oil prices, and the incentive for drillers is not as great as one might think.


Anchorage, AK —Conservation and Alaska Native groups today filed a lawsuit against President Trump, challenging his decision to jettison a permanent ban on new offshore oil and gas drilling in the Arctic and Atlantic oceans.

The groups, League of Conservation Voters, Natural Resources Defense Council, Sierra Club, Alaska Wilderness League, Defenders of Wildlife, Northern Alaska Environmental Center, REDOIL (Resisting Environmental Destruction on Indigenous Lands), Center for Biological Diversity, Greenpeace and The Wilderness Society, represented by attorneys at Earthjustice and Natural Resources Defense Council, issued the following joint statement:

“President Trump’s April 28 executive order exceeds his constitutional and statutory authority and violates federal law. Responding to a national groundswell of opposition to expanded offshore drilling, President Obama permanently ended oil and gas leasing in most of the Arctic Ocean and key parts of the Atlantic Ocean in December, using his authority under the Outer Continental Shelf Lands Act (OCSLA). Until Trump, no president has ever tried to reverse a permanent withdrawal made under OCSLA, which does not authorize such a reversal.

Trump’s executive order could open up more than 120 million acres of ocean territory to the oil and gas industry, affecting 98 percent of federal Arctic Ocean waters and 31 biologically rich deepwater canyons in the Atlantic Ocean. Offshore drilling in these undeveloped regions threatens to harm irreplaceable wildlife, sensitive marine ecosystems, coastal residents and the businesses that depend on them, and our global climate.”

Scientific American: 

As sea ice in the warming Arctic retreats more and more during summer, the fabled Northwest Passage is becoming a greater temptation. The route—actually a series of straits across northern Canada—would cut 3,000 miles off the voyage from New York City to Shanghai via the Panama Canal. But in practice, lingering ice is so unpredictable that a crossing remains risky and expensive. Arctic scientists think it will be many years before ships can make the passage regularly.


Royal Dutch Shell’s abrupt announcement today that it would cease all offshore drilling in the Arctic is surprising for several reasons. One is the unusual degree of confidence the company expressed as recently as mid-August that it had identified 15 billion barrels of oil beneath the well known as Burger J it’s now abandoning.

What on earth happened?

Mistaken geology

After spending $7 billion over several years to explore a single well this summer, Shell said in a statement that it “found indications of oil and gas … but these are not sufficient to warrant further exploration.” This contrasts sharply with Shell officials’ statements as recently as July and August that based on 3D and 4D seismic analysis of core samples, its petroleum geologists were “very confident” drillers would find plentiful oil.

The geologists’ expectations were the main reason Shell spent all that money on a project that entailed much-higher-than-average operational risks and international environmental condemnation. Giving up has got to hurt at a company that prides itself on scientific and technical prowess. Shell said it would take an unspecified financial charge related to the folding of its Arctic operation, which carries a value of $3 billion on the company’s balance sheet.

Intensifying fear about oil prices

In late July, when Ann Pickard, Shell’s top executive for the Arctic, explained the economics of drilling in the Chukchi Sea, she readily acknowledged that if oil prices remained below $50 a barrel, the off-shore adventure would be for naught. At $70, Chukchi oil would be “competitive,” she told Bloomberg Businessweek, and at $110—a reasonable projection, according to the company’s economists—it would be a huge winner. She was talking about prospective prices 15 years from now.

Well, in recent weeks, Shell appears to have lost some of its bravado about where prices will be in 2030—according to a person familiar with the company’s thinking. Otherwise, it wouldn’t have given up altogether on the Chukchi, where it continues to hold 275 Outer Continental lease blocks. Indeed, Marvin Odum, director of Shell Upstream Americas, said in the written statement that the company “continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the U.S.”

Shell lost confidence it could make a profit any time in the foreseeable future on the oil that’s there. Low oil prices have also necessitated a companywide cost-cutting push; shutting down in the Arctic will help Shell trim expenditures, especially next year. (Pickard, who is expected to retire, was not available for an interview, according to a Shell spokesman.)


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: