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Tue, 2014-10-14 13:35Steve Horn
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Tar Sands Trade: Kuwait Buys Stake in Alberta As It Opens Own Heavy Oil Spigot

Chevron made waves in the business world when it announced its October 6 sale of 30-percent of its holdings in the Alberta-based Duvernay Shale basin to Kuwait Foreign Petroleum Exploration Company (KUFPEC) for $1.5 billion.

It marked the first North American purchase for the Kuwaiti state-owned oil company and yields KUFPEC 330,000 acres of Duvernay shale gas. Company CEO and the country's Crown Prince, Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, called it an “anchor project” that could spawn Kuwait's expansion into North America at-large. 

Kuwait's investment in the Duvernay, at face-value buying into Canada's hydraulic fracturing (“fracking”) revolution, was actually also an all-in bet on Alberta's tar sands. As explained in an October 7 article in Platts, the Duvernay serves as a key feedstock for condensate, a petroleum product made from gas used to dilute tar sands, allowing the product to move through pipelines. 

And while Kuwait — the small Gulf state sandwiched between Iraq and Saudi Arabia — has made a wager on Alberta's shale and tar sands, Big Oil may also soon make a big bet on Kuwait's homegrown tar sands resources.

“Kuwait has invited Britain’s BP, France’s Total, Royal Dutch Shell, ExxonMobil and Chevron, to bid for a so-called enhanced technical service agreement for the northern Ratqa heavy oilfield,” explained an October 2 article in Reuters. “It is the first time KOC will develop such a big heavy oil reservoir and the plan is to produce 60,000 bpd from Ratqa, which lies close to the Iraqi border [in northern Kuwait]…and then ramp it up to 120,000 bpd by 2025.”

In the past, Kuwait has said it hopes to learn how to extract tar sands from Alberta's petroleum engineers.

Sun, 2014-09-28 07:00Mike G
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Arctic Madness: Shell and ConocoPhillips Plead With US Govt to Avoid Standards For Arctic Spill Preparedness

Two oil companies planning to drill in remote Arctic waters, Shell and ConocoPhillips, are pleading with U.S. regulators not to make them follow new guidelines proposed by the Interior Department that would require the companies to keep emergency spill response equipment close at hand and prohibit the use of chemical dispersants.

The precise details of the new rules for Arctic drilling operations have not been made public as an inter-agency review of the Interior Department's proposal is still being carried out.

But records of meetings with officials at the Office of Management and Budget (OMB), which is currently reviewing the new standards, show that Shell is vigorously contesting rules that would require the company to keep on hand the necessary equipment for emergency response in the event of a blowout, such as containment systems and a rig to drill a relief well.

Shell says that keeping a rig on standby would cost the company an additional $250 million a year.

Both Shell and ConocoPhillips are taking issue with another of the proposed rules, a potential ban on the use of highly toxic chemical dispersants in favor of booms, skimmers, and other physical equipment to contain spilled oil.

In a presentation to the OMB's Office of Information and Regulatory Affairs, Shell argued: “A 100 percent mechanical requirement leads to increasing costs and environmental impacts — less recovery of oil — as operators enter plays with higher daily worst-case discharges.”

Studies have shown that while dispersants can help prevent oil from washing ashore and may protect surface-dwelling sea life, it can have serious impacts on marine life living below the surface.

Sun, 2014-08-31 08:00Steve Horn
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Legal Case: White House Argues Against Considering Climate Change on Energy Projects

Just over a month before the United Nations convenes on September 23 in New York City to discuss climate change and activists gather for a week of action, the Obama White House Council on Environmental Quality (CEQ) argued it does not have to offer guidance to federal agencies it coordinates with to consider climate change impacts for energy decisions.

It came just a few weeks before a leaked draft copy of the Intergovernmental Panel on Climate Change's (IPCC) latest assessment said climate disruption could cause “severe, pervasive and irreversible impacts for people and ecosystems.”

Initially filed as a February 2008 petition to CEQ by the International Center for Technology Assessment, the Sierra Club and the Natural Resources Defense Council (NRDC) when George W. Bush still served as President, it had been stalled for years. 

Six and a half years later and another term into the Obama Administration, however, things have finally moved forward. Or backwards, depending on who you ask. 

NEPA and CEQ

The initial February 2008 legal petition issued by the plaintiffs was rather simple: the White House's Council for Environmental Quality (CEQ) should provide guidance to federal agencies it coordinates with to weigh climate change impacts when utilizing the National Environmental Policy Act (NEPA) on energy policy decisions. 

A legal process completely skirted in recent prominent tar sands pipeline cases by both TransCanada and Enbridge, NEPA is referred to by legal scholars as the “Magna Carta” of environmental law.

Magna Carta; Photo Credit: Wikimedia Commons

CEQ oversees major tenets of environmental, energy and climate policy. It often serves as the final arbiter on many major legislative pushes proposed by Congress and federal agencies much in the same way the White House's Office of Information and Regulatory Affairs (OIRA) does for regulatory policy. 

Thu, 2014-08-28 11:06Steve Horn
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Obama Opened Floodgates for Offshore Fracking in Recent Gulf of Mexico Lease

In little-noticed news arising out of a recent Gulf of Mexico offshore oil and gas lease held by the U.S. Department of Interior's Bureau of Ocean Energy Management, the floodgates have opened for Gulf offshore hydraulic fracturing (“fracking”).

With 21.6 million acres auctioned off by the Obama Administration and 433,822 acres receiving bids, some press accounts have declared BP America — of 2010 Gulf of Mexico offshore oil spill infamy — a big winner of the auction. If true, fracking and the oil and gas services companies who perform it like Halliburton, Baker Hughes and Schlumberger came in a close second.

Gulf of Mexico Oil Lease Map August 2014
Map Credit: U.S. Bureau of Ocean Energy Management

On the day of the sale held at the Superdome in New Orleans, Louisiana, an Associated Press article explained that many of the purchased blocks sit in the Lower Tertiary basin, coined the “final frontier of oil exploration in the Gulf of Mexico” by industry analysts.

“The Lower Tertiary is an ancient layer of the earth's crust made of dense rock,” explained APTo access the mineral resources trapped within it, hydraulic fracturing activity is projected to grow in the western Gulf of Mexico by more than 10 percent this year, according to Houston-based oilfield services company Baker Hughes Inc., which operates about a third of the world's offshore fracking rigs.”

Mon, 2014-07-21 08:13Justin Mikulka
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Exclusive: E-mails Reveal Feds and Rail Companies Pressured States to Keep Oil-by-Rail Information Secret

Documents released to DeSmogBlog by the Washington State Military Department reveal that both the Department of Transportation (DOT) and rail companies attempted to pressure states including Washington to keep information about Bakken crude oil trains from the public.

As previously reported on DeSmogBlog, while rail companies have been asserting that information about the frequency and routes of Bakken oil trains was “security sensitive,” the Federal Railroad Administration and the Transportation Security Administration were saying the opposite.

However, that didn’t stop the Department of Transportation from pressuring states like Washington only to release information on a “need to know” basis. A document provided to the states by the department argues against the public’s right to know:

This data is intended for those persons with a need-to-know; that is, first responders at the state and local level, as well other appropriate emergency response planners. DOT expects the SERCs to treat this data as confidential, providing it only to those with a need-to-know, and with the understanding that recipients of the data will continue to treat it as confidential.

The Department of Transportation went on to explain why it thought it was “appropriate” to keep the oil train information from the public.

Thu, 2014-04-24 11:16Farron Cousins
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Report: Arctic Oil Spill Readiness Virtually Nonexistent

Sea ice in the Arctic Circle is currently melting at a pace far greater than scientists had originally projected.  While this is bad news for the planet — sea ice helps reflect the sun’s rays and keeps the arctic cooler — it has created new paths for the oil industry to exploit the resources hidden deep under the icy water.

Drilling activities in the Arctic have currently stalled, but this stall isn’t going to last forever.  The Arctic is estimated to hold about 13% of the world’s oil reserves, and at least one-third of the total oil within U.S. territory.  This means that the oil companies don’t need to worry with drilling on foreign lands or about the prospect of not hitting a massive payday.  They will return.

That’s the problem – they will return.  According to a new report by the National Research Council, that is a very scary scenario for both the climate and the environment.  The report says that increased drilling and the placement of oil pipelines make oil spills a question of “when,” not “if.”

The report lays out two very specific themes with regards to Arctic drilling. The first is that there is no discernable oil spill response plan, and the second is that the history of oil companies tells us with great certainty that there will be a massive spill as a result of the increased activity in the region.

Tue, 2014-04-22 12:30Sharon Kelly
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Very Little Cheap Natural Gas in New York Marcellus Shale, New Report Concludes

For years, the shale industry has touted the economic benefits it can provide. An overflowing supply of domestic natural gas will help keep heating and electric bills low for American consumers, they argue, while drilling jobs and astounding royalty windfalls for landowners will reinvigorate local economies. These tantalizing promises have caught the attention of politicians in Washington, D.C. who argue that the rewards of relying on shale gas outweigh the risks, especially because harm can be minimized by the industry or by regulators.

But across the U.S., communities where drilling has taken place have found that the process brings along higher costs than advertised. Even when properly done, drilling carries with it major impacts — including air pollution, truck traffic, and plunging property values — and when drillers make mistakes, water contamination has left residents without drinking water or cleaning up from disastrous well blow-outs.

And as the shale drilling boom moves into its 12th year, the most crucial benefit claimed by drillers — cheap and abundant domestic fuel supplies — has come increasingly into question. The gas is there, no doubt, but most of it costs more to get it out than the gas is worth.

A new report from New York state, where a de facto shale drilling moratorium has persisted since 2008, concludes that unless natural gas prices double, much of the shale gas in the state cannot be profitably accessed by oil and gas companies.

Mon, 2014-03-17 13:39Steve Horn
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Why ExxonMobil's Partnerships With Russia's Rosneft Challenge the Narrative of U.S. Exports As Energy Weapon

In a long-awaited moment in a hotly contested zone currently occupied by the Russian military, Ukraine's citizens living in the peninsula of Crimea voted overwhelmingly to become part of Russia.

Responding to the referendum, President Barack Obama and numerous U.S. officials rejected the results out of hand and the Obama Administration has confirmed he will authorize economic sanctions against high-ranking Russian officials.

“As I told President Putin yesterday, the referendum in Crimea was a clear violation of Ukrainian constitutions and international law and it will not be recognized by the international community,” Obama said in a press briefing. “Today I am announcing a series of measures that will continue to increase the cost on Russia and those responsible for what is happening in Ukraine.” 

But even before the vote and issuing of sanctions, numerous key U.S. officials hyped the need to expedite U.S. oil and gas exports to fend off Europe's reliance on importing Russia's gas bounty. In short, gas obtained via hydraulic fracturing (“fracking”) is increasingly seen as a “geopolitical tool” for U.S. power-brokers, as The New York Times explained. 

Perhaps responding to the repeated calls to use gas as a “diplomatic tool,” the U.S. Department of Energy (DOE) recently announced it will sell 5 million barrels of oil from the seldom-tapped Strategic Petroleum Reserve. Both the White House and DOE deny the decision had anything to do with the situation in Ukraine.

Yet even as some say we are witnessing the beginning of a “new cold war,” few have discussed the ties binding major U.S. oil and gas companies with Russian state oil and gas companies.

The ties that bind, as well as other real logistical and economic issues complicate the narrative of exports as an “energy weapon.”

Tue, 2013-12-24 05:00Julie Dermansky
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Happy Holidays From Cancer Alley: Christmas Lights Overshadowed By Shell's Flaring

The streets of Norco, Louisiana are filled with Christmas lights like lots of U.S. towns this season. But on December 19th, the sky above Norco was illuminated by massive flaring at Shell Chemical's refinery in town. A friend of mine posted on Facebook that he could see the flares from the Twin Span Bridge, over 50 miles from Norco, so I went to check it out.

Watch what I documented when I visited Norco on December 19th:

When asked about what caused the flares, Shell's U.S. media spokesperson, Kimberly Windon, replied by email, 

“On Thursday, December 19, 2013, the Norco Manufacturing Complex (Chemical) experienced an operational upset on one of its units, which has resulted in flaring and smoke.  There were no injuries associated with this situation. All appropriate agencies were notified and we continue to keep the local community informed.  For reasons of commercial confidentiality, we do not provide details about the operational status of individual units or information on supply.” 

Flares are nothing new to the residents of Norco, especially in the Diamond community, where toxic air pollution has long threatened an African American neighborhood sandwiched between a chemical plant and an oil refinery.

Mon, 2013-12-16 14:56Caroline Selle
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Carbon Emissions And Financial Risk Concentrated In 90 Top Emitters Responsible For 60% Of Emissions

A survey released last week indicates many major institutional investors, such as retirement funds and insurance companies, are putting their investments at risk by neglecting to address the negative financial impacts posed by climate change.

It’s no wonder that some of these investments are dicey when you consider the findings of another paper released last month, which indicated 90 companies are responsible for two-thirds of manmade carbon emissions. That’s not just a huge concentration of carbon emissions — it’s a concentrated dose of financial risk.

Published in the journal of Climatic Change, the report, “Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854–2010,” uses public records and data from the U.S. Department of Energy to calculate emissions based on the companies’ entire supply chains.

All but seven of the 90 companies identified are part of the fossil fuel industry.

Nearly 30 percent of emissions were produced by just the top 20 companies. Together, ExxonMobil, Chevron, BP, Royal Dutch Shell, ConocoPhillips and Peabody Energy, all investor-owned companies, are responsible for more than 13 percent of manmade carbon emissions.

These companies also have a disproportionate amount of political influence in North America. In the United States alone, ExxonMobilChevron and BP have contributed more than $12 million to lawmakers since 1999.

Half of the emissions traced by the report were produced in the last 25 years, when awareness of global warming was increasing. Concerted efforts to deny climate science and halt climate policy began in the early 1990s. As an updated Greenpeace report released in September 2013 shows, the climate denial machine has its roots in Exxon’s funding of front groups.

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