Shell likely to receive Arctic offshore permits, Salazar says

Emphasizing that reviews are still under way, US Sec. of the Interior Ken Salazar said Shell Offshore Inc. appears likely to receive permits to begin drilling its Beaufort and Chukchi Sea leases offshore Alaska this summer.

“I anticipate with the conditions Shell has already met, it is highly likely the permits will be issued,” Salazar told reporters during a June 26 teleconference from Trondheim, Norway, where he has been meeting with offshore oil and gas regulators and industry officials from Russia, Canada, Iceland, and Norway. “If that occurs, it will be with the kind of oversight that makes me confident there will not be problems with the wells that are drilled.”

Salazar said the Beaufort and Chukchi seas have some of the nation’s largest undeveloped crude oil resources as indicated by the 30 wells that have been drilled there already. “If they can be developed, they will contribute to the ‘all-of-the-above’ energy strategy this administration is pursuing. But this development will not take place without adequate protections for the environment and local communities,” he maintained.

Shell will have to meet rigorous new requirements if its Arctic offshore operations proceed, Salazar said. It will have to have an inspector from the US Bureau of Safety and Environmental Enforcement on-site 24 hr/day and have a full suite of response capabilities including a capping stack and spill containment systems, he indicated.

He also expects environment and other organizations to sue Interior, the Bureau of Ocean Energy Management, and BSEE if final permits are issued. “We get sued all the time. I am confident the work BOEM, BSEE, and Interior have done will make us prevail,” Salazar said.

‘Capabilities are there’

“But there’s not going to be an oil spill,” he continued. “The scrutiny that’s going to be involved and all the measures that have been taken make a problem unlikely. If there is one, I am confident the capabilities are there to arrest the problem quickly. If I wasn’t, I wouldn’t let this go forward.”

Salazar said that the final 5-year US Outer Continental Shelf program he plans to announce in the next few days will include plans for the offshore Arctic that reflect a different approach from the past. “Specifically, we intend to gather information from industry, Native Alaskan communities, the scientific community, and the public to identify specific high-resource, low-conflict areas that are best suited for exploration and development,” he said.

“This strategy, which is similar to how we now conduct onshore oil and gas lease sales and offshore wind energy planning, will allow us to design potential lease sales in the Arctic in a way that best balances factors like resource potential, subsistence use, and environmental considerations,” Salazar explained. “Specifically, this analysis will help us to design the specific features of Arctic sales—like the size and location of the sale area and the terms and conditions that ensure that any leases are developed responsibly. This will enhance certainty for industry and reduce conflict, litigation, and delays.”

Salazar, who was joined in the teleconference by Deputy Sec. David J. Hayes in Trondheim and BOEM Director Tommy P. Beaudreau in Washington, said the Obama administration’s Arctic offshore resources strategy would be scientifically based and use information from other Arctic countries, the oil and gas industry, and local communities.

“This will involve all the areas with the highest potential,” Beaudreau said. “But we have to maintain our vigilance and go about leasing in all these areas in the right way. The new plan will reflect what is appropriate to leasing offshore. This involves leasing appropriate to each area, particularly off Alaska’s North Slope, which will contain provisions to protect subsistence living there.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

Shell cuts $15 billion in spending for 2015-17

01/30/2015 Royal Dutch Shell PLC has curtailed more than $15 billion in potential spending over the next 3 years, but is not “not overreacting to current low ...

Victoria extends drilling, fracing ban

01/30/2015 The new Victorian Labor government of premier Daniel Andrews has extended the coal seam gas (CSG) exploration and hydraulic fracturing ban in the s...

Chevron’s $35 billion capital budget down 13% from last year

01/30/2015 Chevron Corp. will allocate $35 billion in its capital and exploratory investment program for 2015, including $4 billion of planned expenditures by...

US Senate passes bill approving Keystone XL pipeline project

01/30/2015 The US Senate has passed a bill approving construction of the proposed Keystone XL crude oil pipeline by a 62-36 vote after 3 weeks of debate. Nine...

Oxy cuts capital budget by a third

01/30/2015 In the midst of falling oil prices, Occidental Petroleum Corp., Houston, expects to reduce its total capital spending for 2015 to $5.8 billion from...

MARKET WATCH: NYMEX natural gas prices drop after storage report

01/30/2015 US natural gas closed at its lowest price in more than 2 years on the New York market Jan. 29 following the government’s weekly gas storage report,...

Pennsylvania governor reinstates state forest drilling moratorium

01/29/2015 Pennsylvania Gov. Tom Wolf (D) signed an executive order fully reinstating a 2010 moratorium on new oil and gas leases in state forests and parks. ...

PwC: Low oil prices might drive surge in restructuring in 2015

01/29/2015 Mergers and acquisitions (M&A) in the oil and gas industry hit 10-year highs in terms of deal value and volume in 2014, according to a report f...

DOE could meet 45-day LNG export decision deadline, Senate panel told

01/29/2015 The US Department of Energy would have no trouble meeting a 45-day deadline to reach a national interest determination for proposed LNG export faci...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts

On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected