News that the Interior Department has reaffirmed Shell’s right to drill in the Chukchi Sea off the Alaskan coast is an important step toward to Arctic energy development. While the company still must secure individual drilling permits and overall federal approval of its exploration plan, this week’s action advances the larger objective of safe and responsible development of an extremely valuable energy reserve. Interior Secretary Sally Jewell:
“The Arctic is an important component of the Administration’s national energy strategy, and we remain committed to taking a thoughtful and balanced approach to oil and gas leasing and exploration offshore Alaska.”
The oil and natural gas industry agrees. In official comments to the federal Bureau of Ocean Energy Management (BOEM), API and seven other industry-related associations argue that developing Arctic oil and natural gas off the coast of Alaska is essential to U.S. energy security. It’s also vital to the “long-term viability” of the Trans-Alaskan Pipeline System that connects Alaskan energy with the Lower 48. Developing Arctic energy is one of the keys to a robust offshore leasing program, which the federal government is drawing up right now.
A new report from the National Petroleum Council (NPC) underscores the importance of Arctic energy development. Responding to a request from Energy Secretary Ernest Moniz, NPC found that large U.S. oil and natural gas potential in the Arctic can “contribute significantly to meeting future U.S. and global energy needs.” The technology, drilling skill and advances in oil spill prevention and response exist to ensure safe and responsible development, NPC says.
Developing these Arctic reserves is consistent with the actions of an energy superpower. The report:
The United States has large offshore oil potential, similar to Russia and larger than Canada and Norway. Facilitating exploration in the U.S. Arctic would enhance national, economic, and energy security, benefit the people of the north and the United States as a whole, and position the United States to exercise global leadership.
An NPC chart shows the potential of U.S. Arctic energy reserves compared to other nations:
The report notes that oil and natural gas activities in the Arctic have produced more than 25 million barrels of liquids and 550 trillion cubic feet of natural gas. An estimated reserve base contains 38 billion barrels of liquids and 920 trillion cubic feet of natural gas oil and natural gas. The report:
Given the resource potential, and long timelines required to bring Arctic resources to market, Arctic exploration today may provide a material impact to U.S. oil production in the future, potentially averting decline, improving U.S. energy security, and benefitting the local and overall U.S. economy.
More in a video produced by NPC:
The question is whether the United States will put access policies in place that allow this energy to be harnessed – creating jobs, boosting state and national economies and making America’s future more energy secure. Decisions made now are essential to future production. The report:
Why pursue Alaskan exploration and development now? The answer to this question lies in the long lead times involved in exploration and development in Alaska, compared with other sources of U.S. oil production, and the potentially transitory nature of the current world oil supply/demand situation. If development starts now, the long lead times necessary to bring on new crude oil production from Alaska would coincide with a long-term expected decline of U.S. Lower 48 production. Alaskan opportunities can play an important role in extending U.S. energy security in the decades of the 2030s and 2040s. … However, these new sources of crude oil production in the 2030s and 2040s will only be available if new offshore exploration drilling can ramp up in Alaska during this decade.
We have the technology, the skills and expertise and safety infrastructure to responsibly develop America’s Arctic energy. Needed is the energy policy to foster that development – starting with the BOEM federal leasing program, whose draft unfortunately takes too much acreage off the table, in Alaskan waters and others on the outer continental shelf. Offshore development is a great opportunity to make the U.S. more energy secure, but development can’t occur if access to reserves is blocked by too-timid policy decisions.
rockman on Sun, 5th Apr 2015 9:38 am
Over the last 4 decades I’ve on worked on poison gas wells, Deep Water wells, offshore African wells, little rigs drilling shallow wells in S Texas, big rigs drilling deep in Wyoming, etc, etc.
Drilling is not safe. Never has been…never will be. And that’s primarily not the due to equipment failure or a harsh physical environment. It’s almost always been the result of human error. No technology or regulations can change that.
Which doesn’t mean drilling can’t be done as safely as possible. But hands will die, wells will blow out and oil will hit the environment. Nothing will ever eliminate that possibility. Except for banning all drilling everywhere. That’s the choice that has to be made. And there’s no right or wrong choice IMHO. Each has a price tag to it: death and environmental damage or economic damage from insufficient energy. So both sides of the debate can offer positive and negative points. But in the end it’s still a binary choice: drill or don’t drill. There is no middle ground.
Hugh Culliton on Sun, 5th Apr 2015 10:06 am
Rock man: that has to be the most succinct, non-BS synopsis of oil exploration I’ve ever read. Thank you.
rockman on Sun, 5th Apr 2015 10:37 am
Hugh – Once you see the bodies loaded on to choppers and wildlife suffering being succinct is pretty easy. The same as seeing stories about old farts like the Rockman freezing to death because the couldn’t afford a load of hearing fuel. Or families pushed into poverty with job loss as a company shuts down due to high energy costs. It is what it is.
Just like the post I just put up about Green Peace characterizing as all the oil patch as evil and some oil patch characterizing GP et al as commies who want to destroy the American way off life. Both sides are full of sh*t and are doing nothing to max the benefit while minimize the dangers. Fossil fuel development won’t stop regardless of the self-promoting antics of GP. Just as none of the sugary PSA ads put out by Chevron will save the hands or the environment.
The winner takes all attitude by both sides endangers the entire dynamic IMHO.
shortonoil on Sun, 5th Apr 2015 11:00 am
News that the Interior Department has reaffirmed Shell’s right to drill in the Chukchi Sea off the Alaskan coast is an important step toward to Arctic energy development.</I
Will prices rise enough by spring to bring Shell back to the Arctic? $50 oil sure isn't going to do it. $90 oil might do it, but we don't think that is going to happen:
http://www.thehillsgroup.org/depletion2_022.htm
Everyone is hoping that when shale finally dies that prices will zoom back to the stratosphere. At $37 well head prices shale will die. If they are waiting for a big leap after that, they are going to be very disappointed. By the time Shell pumps one barrel, prices will be right back to were they were. Most of that oil in the Arctic will stay exactly were it is; in the ground!
Mike989 on Sun, 5th Apr 2015 11:19 am
Solar will be cheaper then ALL other energy sources in less then 5 years. Only a FOOL Would invest in Any Carbon Solution now.
Growth in Wind and Solar is GEOMETRIC.
Only a FOOL would bet against Geometric growth.
Solar is now 5cent per kWh NOW in the 10 US Southern States.
Only the Incompetence of the top 1% of the oil industry, typically just Right Wing Trolls, is keeping the Oil Industry from Converting to Solar and Wind NOW.
YOU as a shareholder should be DEMANDING ACTION.
You as the Consumer should be BOYCOTTING OIL to Force Exxon to Manage the company for the REAL World.
Exxon is DYING NOW as a company.
P/E ration of 11.1 !!!!
GE, diversified in energy,
P/E ratio of 16.64.
Get it thru your right wing thick heads, YOU’RE LOSING MONEY Rapidly, by ignoring the Massive Move to Clean Energy.
ghung on Sun, 5th Apr 2015 11:23 am
Rock: “Both sides are full of sh*t and are doing nothing to max the benefit while minimize the dangers.”
Not so sure, Rock. Both sides serve a purpose; America was built on opposing sides pushing their bullshit, forcing things toward middle ground. Then, again, the sad reality is that we are reaching the limits of the usefulness of confrontational paradigm creation; left vs. right; green vs. exploitation, etc.. Either way we’re losing the ability to continue life as we know it; the peak oil (peak everything except bullshit) dynamic.
GP is correct in that we are fouling our nest while endangering our collective selves (duh!), but wrong in that holding oil companies more responsible (or whatever) will mean a hill of beans going forward. We’re locked into overshoot and the only thing that will change that will be a dramatic reduction in human population, consumption and waste. That will happen in due time, with or without our input. There will be no winners relative to life as we know it now; just survivors.
ghung on Sun, 5th Apr 2015 11:32 am
Mike: “Only the Incompetence of the top 1% of the oil industry, typically just Right Wing Trolls, is keeping the Oil Industry from Converting to Solar and Wind NOW.”
You failed to mention the vast majority of our massive infrastructure from the last 100 years is utterly dependent on petroleum (virtually all of it, even solar/wind). That’s quite the mandate to continue producing as much of the black goo as society can afford. It’s the greatest trap any society has ever set for itself. Our choices are severely limited, and none of them are net-positive.
GregT on Sun, 5th Apr 2015 12:02 pm
“Solar will be cheaper then ALL other energy sources in less then 5 years. Only a FOOL Would invest in Any Carbon Solution now.”
You are comparing apples to oranges Mike. We are facing a liquid fuels crisis. Investing in fossil fuelled based solar electric, will do nothing to solve a liquid fuels crisis. It will only allow some semblance of BAU to continue for a few more years. Solar is a fossil fuels extender. Nothing more.
Plantagenet on Sun, 5th Apr 2015 12:33 pm
@Mike
A company with a PE of 11 is not dying—a low PE is a good thing. You calculate the PE ratio by dividing the total expenditures (E) by the profits (P). A company with a PE of 11 is much more PROFITABLE then a company with a PE of 15 or 100.
When the PE of Exxon moves from 11 to 50 or 100 or becomes negative—-THAT will be when its dying because it is no longer making lots of profits
Cheers!
Nony on Sun, 5th Apr 2015 12:44 pm
High PE indicates either a growth expectation or a temporary low profit year. The issue is that price (the P) indicates the implicit NPV of all cash flows to an investor (several years) while E (earnings) is based on last year (single point in time).
ghung on Sun, 5th Apr 2015 12:52 pm
Plant: “You calculate the PE ratio by dividing the total expenditures (E) by the profits (P)…”
Gosh Plant, I always thought the P/E ratio was the price of a stock divided by the earnings for each share of that stock. If the current stock price is $10 and each share of stock pays (annual earnings) per share of $1, the P/E (price/earnings) ratio is 10. You are right that the lower number is better in general, but it’s usually not that simple, and generally not useful for comparing apples and oranges….
… but what do I know?
shortonoil on Sun, 5th Apr 2015 1:06 pm
Definition of “Price-Earnings Ratio – P/E Ratio”
“A valuation ratio of a company’s current share price compared to its per-share earnings.”
Read more: http://www.investopedia.com/terms/p/price-earningsratio.asp#ixzz3WTEVzAlY
If you guys had a clue it would be lonely!!!!!
antaris on Sun, 5th Apr 2015 1:55 pm
See. Plant and Nono are the same idiot.
Apneaman on Sun, 5th Apr 2015 5:48 pm
Mike, which part of there is no mining or heavy transport without diesel do you not get? There is no shipping at scale without bunker fuel either. Your as ideologically blind as any rabid right winger and you are completely mistaken to think that most of the commenters here who point out the fallacies of so called alternative energies are politically motivated. With a few exceptions, most regulars here are past today’s political parties. Some, are by nature more conservative or liberal in the dictionary sense, (much of that is biological) but most have awoken to the fact that the old order is finished and is incapable of dealing with any of our predicaments. The truth is people like you – your first priority is beating the other team and real solutions are secondary. Your just a denier of another stripe. Which puts you in the majority of humanity. Which is why we are fucked. Maximizing energy use to maximize our reproductive capacity and pass on our genes is what we are doing because it’s in life’s programming. The rest is just stories we tell ourselves to sooth our guilt and anxieties.
rockman on Mon, 6th Apr 2015 6:25 am
ghung – “…the sad reality is that we are reaching the limits of the usefulness of confrontational paradigm creation”. Well said. That was the point I was poorly trying to make. Constructive debates vs self-glorifying debates that produce nothing positive.