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Lucylastic -> RE: Does anybody here truly not believe in Climate Change? (5/11/2016 8:28:15 PM)
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Oil companies are abandoning the Arctic as temperatures are rising on the drilling debate
The decision by major oil companies to relinquish roughly $3.2 billion in oil and gas leases this week has sparked the once-settled debate on drilling in the rapidly warming Arctic.
Major oil and gas firms confirmed they have abandoned most of their leases in the Arctic in a move that comes as the debate over how best to protect the Arctic from rapid warming has roared back to life.
Oil giants Royal Dutch Shell, ConocoPhillips and others have relinquished roughly $3.2 billion worth of oil and gas leases spanning 900,000 hectares of the Arctic Ocean, company officials confirmed Tuesday.
That news comes just as U.S. President Barack Obama and others are facing new pressure to address never-before-seen change in the region.
In March, the maximum winter sea ice extent in the Arctic hit a record low. That same month, parts of the Arctic were more than 4 C higher than the historic average.
“Today we are an important step closer to a sustainable future for the Arctic Ocean,” said Michael Levine, Pacific senior counsel for the advocacy group Oceana. “Hopefully, today marks the end of the ecologically and economically risky push to drill in the Arctic Ocean.”
Increasing numbers of U.S. lawmakers are speaking out in favour of protecting the Arctic. Last week, a group of 66 congressional Democrats signed a letter calling for the Obama administration to ban Arctic drilling altogether in the next round of leasing.
https://www.thestar.com/news/world/2016/05/11/oil-companies-are-abandoning-the-arctic-as-temperatures-are-rising-on-the-drilling-debate.html
Big oil abandons US$2.5 billion in U.S. Arctic drilling rights after crude prices plummet
Bloomberg News | May 10, 2016 11:51 AM ET
The U.S. Arctic is estimated to hold 27 billion barrels of oil and 132 trillion cubic feet of natural gas, but energy companies have struggled to tap resources.
After plunking down more than US$2.5 billion for drilling rights in U.S. Arctic waters, Royal Dutch Shell, ConocoPhillips and other companies have quietly relinquished claims they once hoped would net the next big oil discovery.
The pullout comes as crude oil prices have plummeted to less than half their June 2014 levels, forcing oil companies to slash spending. For Shell and ConocoPhillips, the decision to abandon Arctic acreage was formalized just before a May 1 due date to pay the U.S. government millions of dollars in rent to keep holdings in the Chukchi Sea north of Alaska.
Shell last year ended a nearly US$8 billion, mishap-marred quest for Arctic crude after disappointing results from a test well in the Chukchi Sea. Shell decided the risk is not worth it for now, and other companies have likely come to the same conclusion, said Peter Kiernan, the lead energy analyst at The Economist Intelligence Unit.
“Arctic exploration has been put back several years, given the low oil price environment, the significant cost involved in exploration and the environmental risks that it entails,” he said.
All told, companies have relinquished 2.2 million acres of drilling rights in the Chukchi Sea — nearly 80 per cent of the leases they bought from the U.S. government in a 2008 auction. Oil companies spent more than US$2.6 billion snapping up 2.8 million acres in the Chukchi Sea during that sale, on top of previous purchases in the Beaufort Sea.
Shell relinquished 274 Chukchi leases and dozens in the neighbouring Beaufort Sea. In doing so, the company forfeits what it paid the U.S government for the rights to drill in those tracts — and the millions of dollars it spent on annual rent since then.
“These actions are consistent with our earlier decision not to explore offshore Alaska for the foreseeable future,” Shell spokesman Curtis Smith said by e-mail. The decision also reflects the high costs of operating off Alaska’s northern coast and evolving regulatory standards, Smith said.
Other energy companies have followed Shell out of the Arctic, according to Interior Department records obtained by the conservation group Oceana under a Freedom of Information Act request and reviewed by Bloomberg News.
ConocoPhillips formally relinquished its 61 Chukchi Sea leases on April 26, and spokeswoman Christina Kuhl said the company will end Interior Board of Land Appeals proceedings that aimed to extend their life.
Statoil dumped 16 Chukchi Sea leases and its working interest stakes in 50 others in the U.S. Arctic last November, conceding the portfolio was “no longer considered competitive.”
Iona Energy Inc., a Canadian oil and gas company that began insolvency proceedings last November, ceded its one lease in the Chukchi Sea on March 31. Italy’s Eni SpA also gave up four leases in the Chukchi Sea on April 28.
Shell indefinitely halted oil exploration in the U.S. Arctic, but is seeking an extension of leases that begin to expire in 2017. That legal battle, playing out in the Interior Board of Land Appeals, will continue.
Final lease
Shell is holding on to one lease in the Chukchi Sea: the tract it drilled last year. Smith said Shell is maintaining that lone lease — at a potential cost of US$132,456 over the next four years — because there is value in the data the company gathered during its 2015 exploratory drilling. Companies generally have to give the U.S. government the geological information they glean from oil and gas development in federal waters, but they can get an extra two to 10 years to turn over that data as long as they still hold the territory.
The rash of relinquishments means “we are an important step closer to a sustainable future for the Arctic Ocean,” said Michael LeVine, Pacific senior counsel for Oceana, which opposed government decisions to authorize oil development in the area and wants science to guide industrial development there. “Hopefully, today marks the end of the risk, litigation and expense caused by the push to drill in the Arctic Ocean.”
Now, only 535,586 acres remain locked up in the Chukchi Sea. Besides Shell’s one lease there, the tracts are in the hands of just one oil producer: Spain’s Repsol SA. Spokesmen for the company did not return requests for comment.
Next auction
It could be years — if ever — before oil companies get another chance to buy drilling rights in the region. The United States could turn around and resell the forfeited leases if any companies actually wanted to buy them, but the Interior Department canceled upcoming lease sales amid low industry interest last year.
The Interior Department is considering selling leases in the Beaufort Sea in 2020 and the Chukchi Sea two years later, but those auctions are far from certain, and environmentalists are pushing the Obama administration to rule them out entirely. Oceana’s LeVine said oil companies’ decision to forfeit Arctic drilling rights shows “there is no compelling reason to schedule new lease sales.”
Even beyond the United States, there are strong headwinds discouraging oil companies from sending drill bits spinning below Arctic waters. Last month, Shell withdrew an application for a drilling license in Norway’s share of the Arctic Ocean.
http://business.financialpost.com/news/energy/big-oil-abandons-us2-5-billion-in-u-s-arctic-drilling-rights-after-crude-prices-plummet?__lsa=94ee-61c6
I have to admit, reading this almost a year after protesters kayaked against the ice breaker for shell I havent been so squirrel tailed for a long time.
Climate change, global warming, meh ...we are destroying the planet, if you(generic) dont see we need to do more sooner, then you need a brain transplant.
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