After nine years, $7 billion, and enough environmental protesters to fill several very angry Alaskan towns, Royal Dutch Shell has announced they are leaving the Arctic. And many bloggers have been taking full advantage of the literary possibilities, linking Shell’s decision to other famous Arctic expeditions.
At the end of September, Shell called it quits on Alaskan offshore drilling. There were many reasons to end the operation, like difficult winter conditions, environmentalists, and regulations, but most oil and gas industry observers agree the decision was financial. In 2008, the petroleum industry could justify expensive upstream oil and gas operations like this. With oil selling for a record $136 a barrel, the billions of barrels of crude beneath Alaskan waters “seemed like a pretty good deal.”
Center for Offshore Safety (COS)
Center for Offshore Safety – SEMS Toolkit
Offshore Energy Safety Institute (OESI)
Bureau of Safety and Environmental Enforcement (BSEE)
Bureau of Ocean Energy Management (BOEM)
International Association of Drilling Contractors (IADC)
Related EKT Interactive Resources:
Now, upstream oil and gas operations around the world are holding off on the most ambitious exploration projects. Experts say crude oil will hover around $50 a barrel for the foreseeable future, which makes it harder to justify complex exploratory projects like offshore drilling in Alaska. In fact, upstream oil and gas operations like Alaskan drilling might not be profitable until the price of crude oil more than doubles.
Now that Shell has pulled out of Alaska, there are no other oil companies conducting offshore Arctic drilling in U.S. territory. But long term, it’s inevitable that Shell or another company will return for all the crude oil they left behind. Currently, the U.S. is the world’s third-largest crude oil producer, behind Russia and Saudi Arabia. Russia has a number of arctic drilling operations underway. However, because of the high costs of exploration and production, upstream oil and gas sector has been hit particularly hard by the low price of crude.
Even so, the United States has more than 200,000 miles of oil product pipelines stretching from sea to shining sea — more if the Keystone XL pipeline ever gets built. In 2014, the U.S. oil industry produced 8.7 million barrels of crude oil every day, and the Arctic crude Shell is leaving behind is just a drop in the bucket — a 15 billion barrel drop.
Get ready for OTC 2016 with our podcasts, interviews, ebooks, and more. We discuss all of the trends and challenges relevant to this years Offshore Technology Conference.