Geoscience Policy Monthly Review
may 2015
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energy
White House conditionally approves Arctic Drilling
May 11, 2015
The Bureau of Ocean Energy Management (BOEM) issued a statement on May 11 granting Royal Dutch Shell PLC (Shell) conditional drilling rights in the Chukchi Sea off Alaska’s northwest coast. Shell will begin drilling six wells in early July 2015, provided they secure additional permits regarding drilling and wildlife.
The Chuchki reserve may hold an estimated 15.4 billion barrels of recoverable oil and is expected to yield over 4.3 billion barrels in the coming decades. This yield would require eight Arctic-class platforms with 589 wells for exploration, delineation, production, and service.
Before drilling can begin, Shell must receive additional drilling permits from the Bureau of Safety and Environmental Enforcement (BSEE), as well as permits regarding environmental protection from the U.S. Fish and Wildlife Service and the Environmental Protection Agency. Shell must also demonstrate their oil spill response plan for a worst case scenario—a blowout releasing 669,000 barrels of oil over 38 days.
Environmental groups have criticized the Administration’s decision in light of Shell’s failed 2012 mission to drill in the Chukchi Sea, after which the Kulluk oil rig ran aground while being towed to port. Furthermore, the Port of Seattle Commission is threatening to oppose Shell’s plans to use Seattle as a home base for Arctic operations.
The oil industry has praised the Administration’s move toward expanded drilling operations in an area considered to be the nation’s largest untapped oil resource. Senator Lisa Murkowski (R-AK) also commended the move by the Administration saying it was another “important step toward the United States assuming a leadership role in the Arctic.”
Sources: E&E News
Updated: June 8, 2015
Texas law restricts local laws regarding oil and gas
May 19, 2015
Texas governor Greg Abbott signed TX HB 40 into law on May 19 in an effort to create continuity in oil and gas restrictions across the state. The law prohibits cities and municipalities in Texas from restricting oil and gas drilling in “commercially reasonable” areas; only the state will be able to regulate oil and gas operations. As a result of this bill, communities across Texas cannot restrict or ban hydraulic fracturing among other drilling techniques.
The law passed with more than two-thirds approval in the Texas legislature, so it will go into effect immediately, as mandated by the Texan Constitution.
The law directly impacts towns like Denton, Texas. Citizens of Denton banned hydraulic fracturing in their town in a November 2014 referendum; however, the new law would overturn Denton’s ban. Oil and gas companies also challenged the Denton ban in Texas courts to ease restrictions on their activities in the area.
On June 17, the Denton City council repealed its ban citing both a legal challenge by oil and gas companies and H.B. 40. City Council members characterized this as a tactical move to allow for statewide challenges.
Sources: Denton Record Chronicle, E&E News
Updated 6/17/15
Murkowski, Heitkamp introduce Senate bill to allow crude oil exports
May 19, 2015
One week after introducing the Energy Supply and Distribution Act of 2015 (S. 1312), which would lift the US ban on exporting its crude oil to other nations, Senators Heidi Heitkamp (D-ND) and Lisa Murkowski (R-AK) have introduced a second, more focused bill on the issue. While S. 1312 covered a few other topics, such as energy data transfer between the US, Canada, and Mexico, the new bill addresses crude oil exports in more detail.
The new legislation aims to lift the American ban on exporting crude oil, which was imposed in the 1970s. It also renders export licensing from the Department of Commerce unnecessary, except in the case of sanctions, national security concerns, or drawing from the Strategic Petroleum Reserve. Additionally, the President’s authority to restrict oil exports would be curtailed to one-year increments in the event of national emergencies, sanctions, or negative economic fallout.
Despite predictions that its passage could lower domestic gas prices, the bill faces an uncertain future. America’s tense relations with oil-producing states such as Iran and Russia may complicate the global energy market, and—notwithstanding its recent support for offshore drilling along the Atlantic coast—the Obama Administration may oppose the measure on environmental grounds.
Sources: E&E News, Global Trade & Sanctions Law, Senate.gov