Royal Dutch Shell is moving ahead with plans to park two Arctic oil drilling rigs in Seattle amidst a showdown between environmentalists and oil exploration advocates over tapping reserves in the remote Arctic Ocean off Alaska’s coast.
A Shell spokesman said on May 12 it has a valid lease to use about 50 acres of terminal space on Seattle’s waterfront and a tight timeline to prepare its fleet for exploratory oil drilling this summer in the Chukchi Sea northwest of Alaska, so it is sticking to plans to park its drilling fleet on Seattle’s waterfront.
Should Shell bring the rigs to Terminal 5 before the appropriate permits are in place, Seattle’s Department of Planning and Development said it will evaluate the situation and could issue a notice of violation.
The Anglo Dutch supermajor, which late last month slashed annual global spending by a further $2 billion and reported a 56% slump in first-quarter profits, cleared a major hurdle on May 11 when the Federal Bureau of Ocean Energy Management approved its plan, though Shell still must get other permits.
“Sea ice permitting, the earliest date exploration may begin offshore Alaska is July 15,” Shell spokesman Curtis Smith said.
Advocacy groups in the region said they intend to protest Shell’s drilling plans. Six Greenpeace activists scaled Polar Pioneer as it moved toward Seattle waters in April.
Shell devoted about $5 billion and more than eight years of work for its Arctic oil exploration campaign. Its drill ship Kulluk struck ground off the Alaskan coast in 2012, and the US Coast Guard blamed harsh winter conditions and the company’s efforts to escape Alaskan tax laws for the incident.
Susan Murray, deputy vice president for Pacific operations at advocacy group Oceana, said the Arctic campaign is both risky and ill-conceived.
“Accidents can and do happen; and there is no proven way to respond to an oil spill in icy Arctic waters,” she said in a statement.
David Elmes, of Warwick Business School, who researches the oil industry and worked for BP, told New Europe on May 14 that big international companies like Shell need to be looking for the larger opportunities to provide significant growth for them in the future.
“There has been the assessment that says that there are significant hydrocarbon resources in the Arctic,” Elmes said.
However, he added that it’s going to be technically difficult and there are enormous environmental sensitivity issues. “But Shell feels that it is a significant opportunity that a company of their size and scale should evaluate,” Elmes said, adding that the Anglo-Dutch giant has the capabilities to develop it with appropriate environmental concern. “It is like a big bet that only companies like Shell and so on can evaluate and be able to cope with,” he said.
Regarding the currently low oil prices making such expensive projects unprofitable, Elmes reminded that any development of Arctic resources would take decades before any oil comes to the market. “Shell and some other big companies are also to some degree taking a bet on what they think the energy market will be in 10-20 years’ time,” he said.
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