Category Archives: fossil fuels

OilPrice.com: U.S. Could Allow Atlantic Offshore Surveying This Year

http://oilprice.com/Latest-Energy-News/World-News/U.S.-Could-Allow-Atlantic-Offshore-Surveying-This-Year.html

By James Burgess | Mon, 07 April 2014 21:19 | 0

A top Department of Interior official said that the Obama administration may allow oil and gas companies to begin seismic testing in the Atlantic Ocean later this year in what would be a first step towards offshore oil exploration. Tommy Beaudreau, the Director of the Bureau of Ocean Energy Management (BOEM) told a House Appropriations subcommittee that the Department has received several applications to conduct seismic testing. “It’s possible, depending on what the contractor wants to do, that the first survey could be as early as later this year,” he said.

The Atlantic Ocean has been off limits to drilling since the early 1980s, but the Obama administration has taken steps to open up the area for exploration. There is an estimated 3.3 billion barrels of oil under the Atlantic seabed. Environmental groups have opposed seismic testing due to the damaging effects on marine life. Moreover, by blocking seismic testing, they hope to prevent drilling before it starts. At the hearing, Rep. James Moran (D-VA) expressed concern about the potential impacts of an oil spill on Virginia’s economy, and pressed Beaudreau on ensuring that Interior has sufficient oversight to guard against such an event.

Interior published an environmental impact statement in February that outlined safeguards to protect marine life, but also provided a framework for companies to move forward with seismic testing. It didn’t approve seismic testing outright, but that appears to be the direction the agency is heading. And Beaudreau’s comments last week suggest that Interior is moving towards approving seismic testing in late 2014.

Seismic testing would merely be the first step. Drilling could not occur before 2017 – the Department of Interior operates under five-year plans, and should it decide to open up the Atlantic for drilling, that would likely come as part of the 2017-2022 plan.

By James Burgess of Oilprice.com

Daily Mail, UK: Poor management led to Shell grounding

http://www.dailymail.co.uk/wires/ap/article-2596487/Poor-management-led-Shell-grounding.html

By ASSOCIATED PRESS
PUBLISHED: 20:13 EST, 3 April 2014 | UPDATED: 20:13 EST, 3 April 2014
*
ANCHORAGE, Alaska (AP) – Poor risk assessment and management were among factors that led to the grounding of a Shell oil drilling rig in the Gulf of Alaska in 2012, the Coast Guard said in a report released Thursday.

The report also says Alaska’s tax laws influenced the decision to tow the Kulluk to Seattle for maintenance. Royal Dutch Shell PLC believed the drill vessel would have qualified as taxable property on Jan. 1, 2013, if it was still in Alaska waters.

The Kulluk broke away from its tow vessel in late December 2012 after it ran into a vicious storm – a fairly routine winter event for Alaska waters. Multiple attempts to maintain tow lines failed, and the vessel ran aground that New Year’s Eve off tiny Sitkalidak Island, just off Kodiak Island. Several days before the tow initially broke, the master of the tow vessel, Aiviq, sent an email to the Kulluk’s tow master, expressing concerns about the towing conditions, according to the report.

“To be blunt I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an ass kicking,” says the email quoted in the report. “In my opinion we should get to the other side just as soon as possible. It (sic) the event that our weather resources can route us “around” an area that will jeopardize any personnel or equipment on either the Kulluk or the Aiviq we should strongly consider the recommendation and deal with any logistical issues as they develop.”

The Aiviq’s master and tow master shared their concerns about the weather forecast with Shell’s marine manager, and they requested to change course to minimize the impact, according to the report. The request was “not formally granted,” even though Shell’s tow plan gave those Aiviq officials the discretion to change course under certain considerations, the report said.

Damage to the Kulluk played a role in Shell’s decision to forego Arctic offshore drilling in 2013. Shell doesn’t plan to drill in the Arctic this year.

Before the grounding in 2012, Shell had also experienced problems in the challenging Arctic conditions to the north where it was conducting pre-production drilling in the Chukchi and Beaufort seas.

In the Kulluk grounding, the Coast Guard report says sufficient evidence exists for other authorities to consider penalties.

Lisa Novak, a civilian spokeswoman for the Coast Guard, said the final report stems from the Coast Guard’s formal marine casualty investigation. She said it is a fact-finding report, with no direct penalties issued.

The report also includes recommendations. Among them, the Coast Guard Commandant should partner with the Towing Safety Advisory Council to establish a group to address issues raised by the grounding. The report also recommends that the state of Alaska develop minimal criteria for ocean towing in the Coast Guard’s area of responsibility. It also says Shell and other corporations intending to work in Arctic waters should develop and maintain policies addressing all aspects of such operations in areas with histories of heavy weather.

Shell spokeswoman Kelly op de Weegh said the company is reviewing the Coast Guard report. Shell already has implemented lessons learned and will measure them against the findings of the report, she said.

“We appreciate the US Coast Guard’s thorough investigation into the Kulluk towing incident and will take the findings seriously,” she wrote in an email.

U.S. Rep. Ed Markey, D-Mass., who has been vocal about his concerns over the grounding, issued a statement Thursday, saying Shell should be held accountable for its “reckless behavior” pertaining to its tax-avoidance motivations.

“This report shows that Shell ran through every single safety and common-sense red light in moving this rig because of financial considerations,” Markey said.” This kind of behavior should raise major red flags for any future Arctic drilling plans.”

Environmental groups said the report emphasizes deficiencies that make the oil industry and government ill-prepared to deal with oil development in the Arctic Ocean.

“Today’s report again shows that Shell did not appreciate or plan for the risks of operating in Alaskan waters, prioritized financial considerations ahead of safety and precaution, and simply disregarded important legal protections,” Mike LeVine, a staff attorney for the conservation group Oceana, said in an email. “The report again confirms what common sense dictates: companies and government agencies are not ready for the Arctic Ocean.”

___
Associated Press writer Donna Blankinship in Seattle contributed to this rep

Politico’s Morning Energy: COAST GUARD IDENTIFIES SHELL’S MISSTEPS THAT LED TO KULLUK ACCIDENT

Shell was not prepared for the challenges of towing large vessels in the Arctic, the Coast Guard says in a report detailing the Dec. 31, 2012, incident in which the drilling rig Kulluk to run aground while being towed out of Alaska, in part to avoid millions of dollars in state taxes. The report is the latest in a string of bad news for Shell, which said earlier this year it won’t be restarting Arctic drilling activities this year. The 152-page report, which includes a detailed account of the days-long incident, concludes that Shell’s towing plans “were not adequate for the winter towing operation crossing the Gulf of Alaska.”

– There were a number of other contributing factors, according to the report, including using just one towing vessel in bad weather, taking a route too close to the coast, a lack of formalized risk assessment, the premature evacuation of the Kulluk, and using response vessels with inadequate abilities (though it praises their crews). The report includes a litany of safety recommendations, including identifying minimal requirements for towing in the ‘unique Arctic environment.’

Weather blame: The report notes that extreme weather made towing the Kulluk extremely difficult. “The weather in this case had a constant negative impact during the course of this casualty. No less than four significant low pressure systems created hazardous sea and wind conditions, particularly during the response efforts. The storms encountered were extreme, and the frequency added to the complications as there was inadequate time between storms to move the Kulluk to a safe harbor.”

Recommended penalties: The report also says there is sufficient evidence to level penalties against Edison Chouest Offshore, the builder of the towing vessel Aiviq, and several crew members. It recommends turning those matters over to the proper authorities. “I am most troubled by the significant number and nature of the potential violations of law and regulations,” writes Rear Admiral Joseph A. Servido, the assistant commandant for prevention policy, in his response. He adds that “if the potential violations of law and regulations noted in the report actually occurred, far greater levels of oversight will be required.”

The report: http://bit.ly/1fDRcbJ

SHELL RESPONSE: “We appreciate the US Coast Guard’s thorough investigation into the Kulluk towing incident and will take the findings seriously,” Shell spokeswoman Kelly op de Weegh said. “Already, we have implemented lessons learned from our internal review of our 2012 operations. Those improvements will be measured against the findings in the USCG report as well as recommendations from the US Department of Interior.”

REACTIONS
Sen. Lisa Murkowski: “The service has made a number of good recommendations to improve the safety of maritime activities as exploration of the Arctic moves forward. I believe that we can safely develop our energy resources in the Arctic, but it requires that we adhere to world-class safety standards.”

Sen. Mark Begich: “I remain a strong supporter of responsible development of the Arctic’s resources. … The Coast Guard’s investigation and recommendations here will help guide that development and gives me greater confidence about the role the Arctic will play in Alaska’s future.”

Alaska Wilderness League Executive Director Cindy Shogan: “The report continues to demonstrate that no oil company is ready to drill in the Arctic. Shell Oil was forced to abandon its plans to drill in the Arctic Ocean in 2013 due to its own lack of preparedness and technical failures, together with Alaska’s harsh and unpredictable conditions.”

Special thanks to Richard Charter

New Orleans Advocate: Stephanie Grace: Ex-govs agree on worth of lawsuit

http://www.theneworleansadvocate.com/opinion/8729494-171/stephanie-grace-ex-govs-agree-on

governors

Photo by Harold Baquet, Loyola University Office of Public Affairs — From left, moderator Lee Zurik with former Govs. Buddy Roemer, Kathleen Blanco and Edwin Edwards at the Institute of Politics Ed Renwick Lecture at Loyola University in New Orleans.

BY STEPHANIE GRACE
sgrace@theadvocate.com
April 01, 2014

Proponents of the Southeast Louisiana Flood Protection Authority-East’s lawsuit against 97 oil and gas companies say that, in private, they’re not only getting a fair hearing from many politicians but sense some support for their effort to force the powerful industry to help remediate coastal damage. Ask them to name names, though, and they turn mum.

Opponents, of course, are showing no such reluctance. Gov. Bobby Jindal adamantly opposes the suit, and sympathetic legislators, led by oil and gas man and state Sen. Robert Adley, R-Benton, are seeking to kill before it ever gets to court. Jindal removed the effort’s prime architect, author John Barry, from the levee board and is maneuvering to stack it with allies, even as the Legislature is poised to consider codifying more gubernatorial control. The Louisiana Oil & Gas Association sued, arguing Attorney General Buddy Caldwell had no right to OK the suit in the first place, but a judge ruled in Caldwell’s favor. Meanwhile, LOGA President Don Briggs has been vociferously arguing that the suit would have a chilling effect on companies that do business in the state, although in a deposition, he couldn’t come up with a single example.

Such is the atmosphere surrounding the suit and the widely perceived risk in bucking one of the state’s biggest employers and most potent political forces.

That’s what made last week’s unmitigated endorsement of the lawsuit by three former Louisiana governors remarkable.

It’s not that Buddy Roemer, Kathleen Blanco and Edwin Edwards said anything particularly outlandish when they appeared at a Loyola University Institute of Politics forum. Instead, they simply acknowledged that the industry bears responsibility for environmental damage its operations caused and argued that going to court is not a form of intimidation but, rather, a perfectly acceptable way to determine liability.

“All you gotta do is fly over the coastline of Louisiana,” Roemer said. “You don’t need a big speech, you don’t need a lecture series, you don’t need to read a book. Just hitch a ride on a plane, fly over our coastline and see that we are literally disappearing,” particularly along the channels dug by oil and gas interests.

“They do what is best for capitalism, that is to maximize their profits. And the job of the regulators and the citizens is to make sure that damage done is repaired. And that should figure into the cost of profit, and it’s not done now, and Louisiana is particularly egregious in this matter,” he said. “In my opinion, this ought to be a for-profit state, but those who abuse the privilege and don’t pay for damaging the land and water and air which we breathe ought to pay the cost to fix it.”

Next up was Edwards, who noted that “the damage is there, they have made billions of dollars, they have paid millions of dollars in taxes.”

“At the very least, we ought to go to court and find out who is responsible and to what extent, and if it’s determined that they are, then they should be required to pay,” he said.

Then came Blanco, who reminded the crowd that she’d overseen the creation of the independent levee boards in the first place and is “rather concerned that it’s going to be repoliticized.”

“Well, I think that certainly both governors are correct. We’ve all known that the channels that were dug and not restored have contributed mightily to our land loss,” she said. “I would predict that these major companies will come to the table if the lawsuit isn’t destroyed in the political process by the Legislature, but I think that they’ll come to the table and we’ll have a negotiated settlement. I think that they all know that it’s long overdue and that they owe something back to the state of LouisianaĆ It may not go all the way through the court system, but it will bring everybody to the table and force a more honest discussion than we’ve ever seen before.”

Those don’t sound like fringe sentiments, and they don’t come from fringe players.

Roemer, a former Democrat, became a Republican while in office and embarked on a banking career afterward. He can hardly be labeled anti-business, even if he has embraced a crusade in recent years against the poisonous influence of special interest money in politics.

As governor, Blanco was pretty mainstream on oil and gas issues, although she did on a few occasions push back against the industry, with little blowback.

And Edwards may be a lifelong populist, but he coexisted just fine with the industry, as have most Louisiana politicians.

The other thing the three have in common, of course, is that they’re untouchable. Roemer and Blanco are safely retired from politics, and while Edwards is going for an unlikely comeback, he doesn’t seem worried about ticking off any powerful interests.

No, this was just a common-sense take from three politicians who know the lay of the land but have nothing to fear.

Makes you wonder what some of today’s politicians might say out loud, if they felt they could.
Stephanie Grace can be contacted at sgrace@theadvocate.com. Read her blog at http://blogs.theadvocate.com/gracenotes.

Special thanks to Richard Charter