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Page added on July 4, 2015
Shell Arctic oil drilling to commence within weeks
Oil and gas giant Shell is expected to begin drilling for oil in the Arctic within the next two weeks.
Thirty ships left Dutch Harbor in Alaska on Thursday for the Arctic to support two initial exploratory wells.
The company has already committed about $7bn (£4.5bn) to the controversial project, and is confident it will find huge quantities of oil in the region.
But if the initial wells do not find oil, Shell will contemplate walking away from the region entirely.
The US Department of the Interior gave the green light to Shell to commence Arctic oil exploration in May this year, and the Anglo-Dutch group clearly believes it will get the remaining necessary permits in the next week or two.
The initial two wells will be in relatively shallow water of about 40 to 50m deep, off the coast of Alaska, and they will use conventional drilling techniques. The company should know whether these wells find sufficient quantities of oil to justify further exploration by the end of 2016.
By this time, it will have spent another $1.4bn on the project.
Rising demand
Experts believe that more than 20% of the world’s undiscovered oil and gas resources can be found in the Arctic.
Environmentalists argue vehemently that the oil should be left well alone, as the risks of damaging this pristine environment are too great.
Shell believes that despite the environmental risks, oil can be extracted safely – oil that it argues will be needed to meet burgeoning demand for energy across the world over the coming decades.
Given the recent slump in the price of oil, which has fallen by almost half in the last year to $65 a barrel, many believe Arctic oil exploration is no longer economically viable. Some experts say the break-even point for Arctic oil is closer to $100.
However, Shell believes that longer term, Arctic oil will be competitive. It is unlikely that the company will be producing commercial quantities of oil before 2030, if all goes to plan.
Shell originally found natural gas in the Arctic in 1989, and it is now going back to find oil.
It had hoped to start looking much earlier, but suspended its plans for the region two years ago after a rig ran aground in Alaska.
32 Comments on "Shell Arctic oil drilling to commence within weeks"
apneaman on Sat, 4th Jul 2015 7:33 pm
The Arctic has abundant hydro carbons and may soon puke them up-just not for anyone’s benefit.
///////////////////////////////////
Methane Outbreak Nears
“The Intergovernmental Panel on Climate Change (IPCC) as well as world governments ignores the risks of an ice-free Arctic (Wadhams). Rather, an ice-free Arctic is widely applauded by much of the world as a positive way forward for re-opening of northern shipping routes, new trips for cruise lines, and access to a huge cache of fossil fuels.
According to Professor Peter Wadhams of Cambridge University, an ice-free Arctic with its concomitant methane outbreak potential is scarcely mentioned by the IPCC in its assessment. Evidently, the IPCC does not want to discuss the possibility of major catastrophes.
In truth, an ice-free Arctic tempestuously opens up eons of methane entrapped ever since the last Ice Age. The ramifications are profound.”
http://beta.counterpunch.org/2015/07/03/methane-outbreak-nears/
Rodster on Sat, 4th Jul 2015 8:32 pm
Thanks for that article, sounds quite dire if we have an ice free arctic along with methane release from permafrost. The arctic warmer than Miami, frightening.
And this quote is even more chilling: “He believes in a worse case scenario, “by ten years time, we’ll really be in the soup.”
Rodster on Sat, 4th Jul 2015 8:39 pm
You have a guy like Rush Limbaugh who says you can’t kill the oceans even if we tried. First off we are doing just that while dumping 7 million tons of plastics each year into the ocean and that doesn’t count the toxic chemicals, pollutants and garbage dumped in the ocean each year.
Then you have dead zones, ocean acidification, phytoplankton loss, overfishing which results in specie loss, fish die off, coral reef loss etc.
And all the predictions climate scientist made are coming true at an alarming rate. Parts of Miami Beach are already experiencing SLR where you have street flooding from high tides and strong onshore winds causing seawater to bubble up from manhole covers.
At this rate in 100 years we’ll off ourselves from this planet.
dissident on Sat, 4th Jul 2015 8:41 pm
So the only map in this piece is of province without any oil and gas reserves. Since it is metamorphic rock and sedimentary. A map that would be actually useful is from the USGS report on potential Arctic reserves. The oil and gas is in the white parts of the map and falls within the EEZ of the countries with Arctic Ocean coastlines.
Apneaman on Sat, 4th Jul 2015 8:52 pm
There are some scientists (modelers) who claim that the methane won’t come out any time soon, (they said the same thing about the ice caps and were off by at least 50 years) but the ones in the field, like Wadhams (over 40 years going to the Arctic including much time underneath the ice in navy subs), making observations and taking measurements say different. As for the Oceans, what does the completely unqualified pill junkie Limbaugh have to offer as counter evidence to the publicly available peer reviewed work of thousands of marine scientists based on at least a century and half of measurements and observational data? Not to mention industry and fisheries data.
Apneaman on Sat, 4th Jul 2015 8:58 pm
The only thing more polluted than the oceans is Rush Limbaugh’s, mouth, brain and soul. Hateful- obese-vile-drug abuser. I guess we have treated the oceans in the same fashion Rush has treated his body. I hope he lives to see it all come crashing down, but that’s just me being hateful and vile.
Plantagenet on Sat, 4th Jul 2015 9:15 pm
Now that we’ve established that Rodster and Apeman don’t like Rush Limbaugh, can we return to talking about the topic of Shell’s drilling plans, please?
IMHO, I don’t see why this Shell drilling program is getting so much attention from the MSM. The MSM doesn’t seem to give a hoot if Russia or Norway drill in the Arctic, but let Shell do it and the MSM goes into hysterics.
Makati1 on Sat, 4th Jul 2015 9:55 pm
BTW: Shell is also partnering with Rosneft to explore the Arctic. Profits trump sanctions every time for the oil industry.
Boat on Sun, 5th Jul 2015 1:58 am
No Makati1, The sanctions were small and targeted in scope to begin with. Especially considering the crime.
Boat on Sun, 5th Jul 2015 2:02 am
Plant, The MSM doesn’t seem to give a hoot if Russia or Norway drill in the Arctic, but let Shell do it and the MSM goes into hysterics.
The Arctic and primarily Alaska drilling has been a political football for decades.
Makati1 on Sun, 5th Jul 2015 2:41 am
Boat, what crime? The overthrow of an elected Ukraine government by the US?
Boat on Sun, 5th Jul 2015 4:56 am
Now that the population of California for example is hispanic it would be illegal for them to vote to get out of the US. Here it would have to be approved by congress. Ukraine should run Ukraine. Pretty simple standard procedure to follow. Not sure why you don’t get that.
Boat on Sun, 5th Jul 2015 4:57 am
over 1/2 hispanic that is
Kenz300 on Sun, 5th Jul 2015 7:46 am
The OLD and tired FOSSIL fuel companies need to begin to transform themselves into ENERGY companies by investing in alternative energy production like wind, solar and second generation biofuels made from cellulose and waste.
Their old business model is dying and needs to be replaced with cleaner, safer and cheaper energy production that is better for the planet.
Pope Francis, in Sweeping Encyclical, Calls for Swift Action on Climate Change – The New York Times
http://www.nytimes.com/2015/06/19/world/europe/pope-francis-in-sweeping-encyclical-calls-for-swift-action-on-climate-change.html?emc=edit_th_20150619&nl=todaysheadlines&nlid=21372621&_r=0
Makati1 on Sun, 5th Jul 2015 9:07 am
Boat, I always thought that Democracy was when the people chose their future and not the state? But then, if you are an American, you don’t live in a democracy, so you wouldn’t understand. Your Constitution was invalidated by Obama long ago.
Any state can leave the US at anytime they decide to, as you may find out in the near future. No country is forever.
If I were to bet on which one would be first, it would likely be Texas. They still have the resources to go it alone. Some observers outside the US have already divided the US into several new countries which they expect to happen when the SHTF and the current government is helpless/broke. We shall see.
Davy on Sun, 5th Jul 2015 9:12 am
Mak, read what you are saying. You are a raving lunatic. Talk about a tabloid tongued fool.
rockman on Sun, 5th Jul 2015 10:26 am
“…, if you are an American, you don’t live in a democracy.” Correct: we live in a republic. I’ll let you search the web for the distinction. As far as states leaving that was tried and failed long ago at the cost of 600,000 military and many civilians.
As far as Texas goes there is such an urban legend. But in truth as long as the state can retain control of its resources leaving the union wouldn’t be of much net benefit. And with the demographic changes, economic growth and PO the state will become an ever more influential political power.
BobInget on Sun, 5th Jul 2015 10:28 am
If Shell is successful, it will set off a gold rush that saves the company but murders the planet.
Great business model that.
I worry more about what a methane death spiral will do to my stocks now that long term ‘investments’ over one second are to short for capital gains tax discounts.
It’s one thing to know for certain that everyone
dies. Eventually. Quite another to know none of us will be round to gloat over deaths of Rush Limbaugh, Clarence Thomas, Dick Cheney or most regretted, Sen Jim Inhofe.
joe on Sun, 5th Jul 2015 4:13 pm
So here it is guys, 20% so the experts say. So if we are near peak then that’s supposed to be around 400bln barrels, not all for shell of course, not even all for America. Its going to be some show, when the world tries to fight for this stuff.
Makati1 on Sun, 5th Jul 2015 8:25 pm
rockman, I know the difference but most Americans do not. And a banana republic is not a democracy.
Also, the Civil War was about the southern economy vs the northern economy, not states leaving the Union or slavery.
As for the future of the US, a break up is just as possible as not when the government is no longer able to function. That too is in the near future. It is already beginning. Texas asked New York for their gold back. Why? Maybe they see the future and are preparing for it? The South has never changed.
Radical? Maybe? But we shall soon see who is correct.
apneaman on Mon, 6th Jul 2015 3:36 am
Lab rats and the corruption of how we count
Nassim Nicholas Taleb, author of several bestselling books on risk, says that a good rule of thumb is as follows: If the numbers come from somebody wearing a tie (Wall Street economist or analyst, industry public relations department, captive think tank academic and so on), you ought to be very skeptical. By design messages from these people are intended to move markets, move merchandise and/or move public policy and are not a comment on the state of the physical universe.
http://resourceinsights.blogspot.ca/2015/07/lab-rats-and-corruption-of-how-we-count.html
Dredd on Mon, 6th Jul 2015 11:11 am
That is unnatural selection (On The Origin of Unnatural Selection).
Baptised on Mon, 6th Jul 2015 1:33 pm
The problem with boats hypothesis is, ” Here it would have to be approved by Congress”. See our congress has not been illegally overthrown by a other nation 3rd party. So under those circumstances they would have a right to succeed.
apneaman on Mon, 6th Jul 2015 3:02 pm
Crude oil is crashing
“In early afternoon trade on Monday, West Texas Intermediate crude oil was down over 7.8% to as low as $52.48 a barrel.
This is the biggest intraday move for crude oil since February and the lowest price for WTI crude since early April.
Read more: http://www.businessinsider.com/crude-oil-price-july-6-2015-7#ixzz3f8x1fPn9
“
Davy on Mon, 6th Jul 2015 3:41 pm
NOo, where are you I need your help figuring all this out! Help!!
Crude Oil Plummets Most Since February, Nears 16 Year Support Line: Tap On The Shoulder Time?
http://www.zerohedge.com/news/2015-07-06/tap-shoulder-time-crude-plummets-most-february-approaches-16-year-support-line
And, just like in the case of copper, should the drop in Brent persist it too, like coper, would be in danger of breaching a very long-term support line starting with a base in 1999 and continuing all the way through the the plunges of booth 2008 and early this year. SocGen with more:
As previously highlighted, last May price action in Brent formed a monthly Spinning top pattern at the key resistance of $70/72, the interception of the upward channel upper limit and 2010 levels. A Spinning Top is a bearish pattern, rarely a reversal one though, which usually happens after an extended rally/a new high which indicates a pause in upside momentum.
Nony on Mon, 6th Jul 2015 4:04 pm
I’m just a commenter on the Internet, Davy. [Said in that tone of “I’m just a doctor, Jim”. ;)]
Seems like it is mostly demand/macro worries. I guess a little concern on the supply side for the Iran deal and for US rigs starting to go up. But I don’t think the cornies can take credit for this little drop. Mostly China demand concerns.
P.s. “Spinning top” and “widow’s peak” and all the rest of that technical stuff is BS. Really mind numbing crap. Markets don’t move based on stuff like chart shapes. People who believe in that also believe they can figure out a system for roulette.
Nony on Mon, 6th Jul 2015 9:55 pm
See this video. Don’t worry about length, it is looped once. Relevant part is 3:00-4:00.
https://www.youtube.com/watch?v=uGCscFLvuWE
Key point: don’t get into the minutia of 52 versus 48 (near term gyrations). Key thing is the difference of 50 and 100. And US LTO is the reason.
My take: Shale went from being some little pipsqueak that peakers said would never grow into anything big and would end in a year or two–the Bakken and Eagle Ford predictions by Piccolo and Rune and Roger Blanchard got blown out of the water within a few months of their comments–to almost 5 MM bpd of production. And we are not done seeing how it plays out.
Look at what went down with shale gas. Remember all the stuff from Berman and Rogers about how shale needed $8-10? And that the amounts wouldn’t hold up because of decline and need to drill. And that the Marcellus would “disappoint”. That looks pretty silly in retrospect.
Shale oil is not as dramatic…harder molecule to get out. But still, lot of uncertainty as to how things end up. It is at least a big enough factor to affect world prices marginally.
Nony on Mon, 6th Jul 2015 10:00 pm
Please ignore the title of the video (some goober put that on there…it is not eh view of the video). Also by 3-4:00 I mean minutes three to four.
Nony on Mon, 6th Jul 2015 10:28 pm
“It isn’t just that experts didn’t see the shale boom coming. It’s that they underestimated its impact at virtually every turn. First, they didn’t think natural gas could be produced from shale (it could). Then they thought production would fall quickly if natural gas prices dropped (they did, and it didn’t). They thought the techniques that worked for gas couldn’t be applied to oil (they could). They thought shale couldn’t reverse the overall decline in U.S. oil production (it did). And they thought rising U.S. oil production wouldn’t be enough to affect global oil prices (it was).”
http://fivethirtyeight.com/features/the-conventional-wisdom-on-oil-is-always-wrong/undefined
Davy on Tue, 7th Jul 2015 3:19 am
Thanks NOo, interesting comments. There is more to it then you are capable of understanding in your tunnel vision of markets and oil but you make important points that I am chewing on.
BobInget on Tue, 7th Jul 2015 5:37 pm
Shell Icebreaker breaks on meeting up with ice.
http://fuelfix.com/blog/2015/07/07/shells-arctic-icebreaker-damaged-in-alaska/#33661101=0&33766101=0
You almost need to feel sorry for Shell.
BobInget on Tue, 7th Jul 2015 7:15 pm
I’ve put on my tinfoil hat. Here goes.
No nuclear agreement with Iran is possible.
This was one of the chief reasons for oil’s sell-off. Now, we are back to worry worry about Saudi Arabia and Israel committing to what they choose to call “preemptive war”. AKA ‘Bush Doctrine’. Needless to say if Israel and KSA attack Iran ‘all hell breaks loose’.
If Israel and KSA don’t attack there’s an excellent chance the Saudis will exit OPEC leaving Russia,
Iraq, Iran, Venezuela, Ecuador, to form OPEC
2.0.
Nigeria, will by 2016 join Libya as another failed state.
The world’s oldest democracy Greece, will survive Germany once again. Watch for Russian and Chinese and US aid.
Oil will see $60 again this week or next .
(demand is quite strong) watch for EIA REPORT
10:30 Eastern