Posted on 06/28/2008 5:07:47 AM PDT by thackney
With no sign of a ruling by the U.S. Court of Appeals for the 9th Circuit on a lawsuit over Shell’s U.S. Beaufort Sea exploration plans, the company has decided to call it quits on its planned Beaufort Sea drilling program during the 2008 open water season. The company had hoped to do some top-hole drilling at its Sivulliq prospect on the west side of Camden Bay, as well as conducting some geotechnical boring in the seafloor.
“Shell believes this is the responsible decision given the continuing uncertainty and need for our workers and contractors to pursue other opportunities,” Shell spokesman Curtis Smith said, in announcing the decision on June 20.
The 9th Circuit lawsuit involves an appeal by the North Slope Borough, the Alaska Eskimo Whaling Commission and several environmental organizations against MMS approval of Shell’s exploration plan. That appeal resulted in a court injunction on Shell’s Beaufort Sea drilling activities until the case is settled. The court heard oral arguments in December but has yet to issue a ruling in the case.
Unable to hold out
Pete Slaiby, general manager for Shell in Alaska, told Petroleum News June 24 that, faced with uncertainty over the court decision, the company felt unable to continue holding out the prospect of drilling work for people during the 2008 season. “What was first on our mind was that people’s livelihoods are at stake,” Slaiby said.
And time had run out for the detailed planning and preparation needed for a drilling program that Shell had hoped to put into action starting in early August. In addition to planning the actual drilling, all of the support activities need to be planned and organized.
“We’ve actually got to have a handle on this sooner rather than later,” Slaiby said. “It’s not just an on-off switch. We’ve got to ramp up and plan into it. … We can’t ramp things up that quickly.”
The cancellation of the drilling program will result in the loss of 200-plus jobs, mainly in drilling contract work, during the open water season, Slaiby said.
Other activities
However, the company will proceed with other offshore activities, including scientific baseline studies, marine mammal monitoring and surveying for possible pipeline routes from Sivulliq. And seismic acquisition in the Chukchi and Beaufort Seas will continue as planned. “Our planned program is still significant in size and requires support from hundreds of contractors including marine mammal observers, subsistence advisors and call center operators, most of whom are Alaskans,” Smith said in the June 20 announcement.
In fact the communications centers that Shell has established in North Slope communities are in operation, in support of subsistence whaling, Slaiby said. Already use of the centers has saved someone, he said.
Shell will continue with further planned upgrades to the Kulluk floating drilling platform that it plans to use for its Beaufort Sea drilling, Slaiby said. And the company will mobilize some of its offshore oil spill response personnel and equipment to conduct some training exercises, he said.
Long-term view
But continuing delays in Shell’s drilling program translate to deferral of the point at which oil or gas production from the Beaufort Sea might start and will result in mounting costs for the company. What does all of that mean for Shell’s views of Alaska as a place to do business? “We are still committed to this as a heartland,” Slaiby said. “We’ve started to talk a little bit about this in terms of it being a marathon rather than a sprint. We do want to have relationships that go beyond a number of years.”
With a short annual exploration season in the Beaufort Sea, Shell would have liked to have jumpstarted its Sivulliq exploration with the top-hole drilling. But, although there are a significant number of people in Alaska who would view the delay as a lost opportunity, there are people in the villages who express legitimate concerns about Shell’s plans, Slaiby said. And the North Slope Borough has questioned the rapid pace with which Shell has been trying to move forward with its offshore plans.
“We’re sympathetic to that,” Slaiby said.
Slaiby said that Shell views delays in its plans as an opportunity for further dialogue.
“We do want to create a space where we can talk to communities and get their input into what we’re doing, rather than just going out there and telling them,” Slaiby said. “… Taking time is a good thing.”
More baseline data
The drilling hiatus will also provide an opportunity to collect more baseline environmental data, he said. “We’re also continuing to collect the data and building an even more extensive database on the marine mammals and other … wildlife in the area,” Slaiby said.
And Shell is still negotiating with North Slope whalers for a conflict avoidance agreement for the summer seismic program.
“We’re not there but … the quality of the dialogue is good,” Slaiby said. “I’m encouraged.”
But what about the lack of a decision from the 9th Circuit court?
Shell is disappointed that the decision has not appeared in an opportune manner — no decision is the worst possible situation, because people don’t know where they stand, Slaiby said.
“We feel that MMS did a very thorough, fair and unbiased job in issuing us the permit,” Slaiby said. “… We’re expected to be on top of our game when we present these permits.”
Don’t worry, the 9th Circus will obey the “guidance” of their Marxist overlords.
I thought they were the Marxist overlords
The perverts of the 9th Circus have spoken—we don’t care if you spend $8 per gallon—walking is good for you!
Slow leftist courts...
Unending ecofreek lawsuits...
Volumes of government regulations...
Unfriendly executive orders...
No wonder there is not much drilling here.
Isn't this the crap we just heard?
The pure cynicism of the environmental-Marxist movement just amazes me sometimes. Leftist lawyers paid for by donors in New York and S.F. cobble together a case on behalf of Eskimo whalers—remember how important it is to environmentalists to save the scarce, beautiful, intelligent, wise whales?—because drilling for oil might disrupt the whalers' attempts to kill more whales.
However contradictory the reasoning, the goal stays clear and consistent: Starve America, so it will be less powerful, so the donors won't have enough money to give to environmentalist organizations. . . No, wait a minute, that doesn't work.
Is this one of the 68 million acres that the libs claim we can drill in and are criticizing the oil companies for not doing so?
How did we get to a point in this country where you have to beg the courts just to do ordinary business?
If I could shed a little light on this 68 million acres business: most Kansas farmers lease their ground to oil companies for possible exploration. Let’s say I have 2,000 acres leased. Let’s say I have two stripper wells and a natural gas well. These, including collection tanks and access roads, take up no more than 5 acres. If the oil companies drilled on every 100 square feet, they probably wouldn’t find any more production. But, according to the brain children on the Democrat side, the oil companies are refusing to drill on 2,995 acres. Democrat reality only works if you don’t know what they’re talking about.
If you like $5/gal, Thank the DNC. If you want $10/gal, Vote Obama.
PRay for W and Our Freedom Fighters
And the RATs in Congress are asking why there is no drilling on some existing leases?
“Idle” lease claims based on lack of understanding: Cavaney
http://www.freerepublic.com/focus/f-news/2035201/posts
Of course. This is yet another lease paid for by “Big Oil” who has not yet produced oil from it. The numbers quoted were for all leases not producing.
My question is; How long are we going to put up with it?
Your number is off I think (1995 acres), but I get your point. LOL
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