28 September 2015, The Guardian, Shell abandons Alaska Arctic drilling. Oil giant’s US president says hugely controversial drilling operations off Alaska will stop for ‘foreseeable future’ as drilling finds little oil and gas. Shell has abandoned its controversial drilling operations in the Alaskan Arctic in the face of mounting opposition. Its decision, which has been welcomed by environmental campaigners, follows disappointing results from an exploratory well drilled 80 miles off Alaska’s north-west coast. Shell said it had found oil and gas but not in sufficient quantities. The move is a major climbdown for the Anglo-Dutch group which had talked up the prospects of oil and gas in the region. Shell has spent about $7bn (£4.6bn) onArctic offshore development in the hope there would be deposits worth pursuing, but now says operations are being ended for the “foreseeable future.” Shell is expected to take a hit of around $4.1bn as a result of the decision. The company has come under increasing pressure from shareholders worried about the plunging share price and the costs of what has so far been a futile search in the Chukchi Sea. Shell has also privately made clear it is taken aback by the public protests against the drilling which are threatening to seriously damage its reputation. Ben van Beurden, the chief executive, is also said to be worried that the Arctic is undermining his attempts to influence the debate around climate change. His attempts to argue that a Shell strategy of building up gas as a “transitional” fuel to pave the way to a lower carbon future has met with scepticism, partly because of the Arctic operations. Read More here
Tag Archives: oil
22 September 2015, Post Carbon Institute, A long-term abundance of oil & natural gas, but what if the boom is just a bubble? Tight oil reality check. Much of the cost-benefit debate over fracking has come down to the perception of just how much domestic oil and gas it can produce and at what cost. To answer this question, policymakers, the media, and the general public have typically turned to the U.S. Department of Energy’sEnergy Information Administration (EIA), which every year publishes its Annual Energy Outlook (AEO). In Drilling Deeper, PCI Fellow David Hughes took a hard look at the EIA’s AEO2014 and found that its projections for future production and prices suffered from a worrisome level of optimism. Recently, the EIA released its Annual Energy Outlook 2015 and so we asked David Hughes to see how the EIA’s projections and assumptions have changed over the last year, and to assess the AEO2015 against both Drilling Deeper and up-to-date production data from key shale gas and tight oil plays. In July 2015, Post Carbon Institute published Shale Gas Reality Check, which found that in 2015 the EIA is more optimistic than ever about the prospects for shale gas, despite substantive reasons for caution. This month we turn our eyes to the EIA’s latest projections for tight oil. KEY CONCLUSIONS:
- The EIA’s 2015 Annual Energy Outlook is even more optimistic about tight oil than the AEO2014, which we showed in Drilling Deeper suffered from a great deal of questionable optimism. The AEO2015 reference case projection of total tight oil production through 2040 has increased by 6.5 billion barrels, or 15%, compared to AEO2014.
- The EIA assumes West Texas Intermediate (WTI) oil prices will remain low and not exceed $100/barrel until 2031.
- At the same time, the EIA assumes that overall U.S. oil production will experience a very gradual decline following a peak in 2020.
- These assumptions—low prices, continued growth through this decade, and a gradual decline in production thereafter—are belied by the geological and economic realities of shale plays. The recent drop in oil prices has already hit tight oil production growth hard. The steep decline rates of wells and the fact that the best wells are typically drilled off first means that it will become increasingly difficult for these production forecasts to be met, especially at relatively low prices.
- – Perhaps the most striking change from AEO2014 to AEO2015 is the EIA’s optimism about the Bakken, the projected recovery of which was raised by a whopping 85%. Read More here
16 September 2015, The Guardian, Stopping fracking won’t stop climate change. I am neither pro nor anti-fracking, but green campaigners must look beyond future threats and tackle the present impacts of fossil fuels if we are to combat climate change…. My concern with the current debate about fracking stems not from any love of the technology but from the fact that it is currently absorbing people’s time and energy fighting potential future impacts, when all around us are far worse existing activities, such as burning Russian coal in 1960s’ power stations. It seems some in the green movement work on the basis that their best chances of making a difference lie in stopping threats that have yet to happen, rather than the impacts that are already with us. Anti new road protests, anti GM, anti incinerators, anti biofuel, anti new nuclear, even stopping the building of the new Kingsnorth coal fired power station – all are examples of this brand of campaigning. Done well they can penetrate the political discourse and change the debate. The problem, however, with whipping up fear of future threats is that it can also lead to fixed ideological positions being adopted in the absence of any actual evidence of harm, and, unless we start blocking the things that are already happening, we risk locking ourselves into the flawed and damaging system we have today. This is of particular concern because it is not just the green movement that has learned the game of how to stop new things from happening. Stoking nimbyism can carry risks for all who seek action on global issues. Read More here
26 August 2015, The Guardian, US environmental agency advising Australia on impact of fracking on water. The US’s Environmental Protection Agency has given Australia’s Department of the Environment details of recent fracking study and is peer reviewing papers. The Australian government has obtained information from US environmental regulators on the impact of fracking upon water supplies to help inform a new set of guidelines it is preparing on the controversial activity. The US’s Environmental Protection Agency has supplied the Australian Department of the Environment with the details of a recent study on fracking. The EPA has also helped the department peer review a number of its own documents. The EPA report is the result of a request from Congress to analyse how fracking for oil and gas is affecting water supplies in the US. Fracking, or hydraulic fracturing, is a process where a combination of water, chemicals and sand is injected deep underground in order to release oil or gas from rocky areas. Fracking is banned in Victoria and has faced opposition from environmental groups, some farmers and radio personality Alan Jones in New South Wales and Queensland. However, the EPA report said it could find no evidence of “widespread, systemic impacts on drinking water resources in the United States” from fracking, which is deployed across vast swathes of the country. Read More here