Shell Loses $ 4.4 Billion as Obama Shuts Down Arctic Oil Drilling
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Energy in America: EPA Rules Force Shell to Abandon Oil Drilling Plans
By Dan Springer
Published April 25, 2011
| FoxNews.com
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Shell Oil Company has announced it must scrap efforts to drill for oil this
summer in the Arctic Ocean off the northern coast of Alaska. The decision
comes following a ruling by the EPA's Environmental Appeals Board to
withhold critical air permits. The move has angered some in Congress and
triggered a flurry of legislation aimed at stripping the EPA of its oil
drilling oversight.
Shell has spent five years and nearly $4 billion dollars on plans to explore
for oil in the Beaufort and Chukchi Seas. The leases alone cost $2.2
billion. Shell Vice President Pete Slaiby says obtaining similar air permits
for a drilling operation in the Gulf of Mexico would take about 45 days. He's
especially frustrated over the appeal board's suggestion that the Arctic
drill would somehow be hazardous for the people who live in the area. "We
think the issues were really not major," Slaiby said, "and clearly not
impactful for the communities we work in."
The closest village to where Shell proposed to drill is Kaktovik, Alaska. It
is one of the most remote places in the United States. According to the
latest census, the population is 245 and nearly all of the residents are
Alaska natives. The village, which is 1 square mile, sits right along the
shores of the Beaufort Sea, 70 miles away from the proposed off-shore drill
site.
The EPA's appeals board ruled that Shell had not taken into consideration
emissions from an ice-breaking vessel when calculating overall greenhouse
gas emissions from the project. Environmental groups were thrilled by the
ruling.
"What the modeling showed was in communities like Kaktovik, Shell's drilling
would increase air pollution levels close to air quality standards," said
Eric Grafe, Earthjustice's lead attorney on the case. Earthjustice was
joined by Center for Biological Diversity and the Alaska Wilderness League
in challenging the air permits.
At stake is an estimated 27 billion barrels of oil. That's how much the U.
S. Geological Survey believes is in the U.S. portion of the Arctic Ocean.
For perspective, that represents two and a half times more oil than has
flowed down the Trans Alaska pipeline throughout its 30-year history. That
pipeline is getting dangerously low on oil. At 660,000 barrels a day, it's
carrying only one-third its capacity.
Production on the North Slope of Alaska is declining at a rate of about 7
percent a year. If the volume gets much lower, pipeline officials say they
will have to shut it down. Alaska officials are blasting the Environmental
Protection Agency.
"It's driving investment and production overseas," said Alaska's DNR
Commissioner Dan Sullivan. "That doesn't help the United States in any way,
shape or form."
The EPA did not return repeated calls and e-mails. The Environmental Appeals
Board has four members: Edward Reich, Charles Sheehan, Kathie Stein and Anna
Wolgast. All are registered Democrats and Kathie Stein was an activist
attorney for the Environmental Defense Fund. Members are appointed by the
EPA administrator. Alaska's Republican senator thinks it's time to make some
changes.
"EPA has demonstrated that they're not competent to handle the process,"
said Sen. Lisa Murkowski. "So if they're not competent to handle it, they
need to get out of the way."
Murkowski supported budget amendments that would have stripped the EPA of
its oversight role in Arctic offshore drilling. The Interior Department
issues air permits to oil companies working in the Gulf of Mexico.