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Economy

Obama blocks new oil, gas drilling in Arctic Ocean

2016-11-19

There's an executive order that won't last long under President Trump...

The Obama administration is blocking new oil and gas drilling in the Arctic Ocean, handing a victory to environmentalists who say industrial activity in the icy waters will harm whales, walruses and other wildlife and exacerbate global warming, Associated Press reported.

A five-year offshore drilling plan announced on Friday blocks the planned sale of new oil and gas drilling rights in the Chukchi and Beaufort seas north of Alaska. The plan allows drilling to go forward in Alaska's Cook Inlet southwest of Anchorage.

The blueprint for drilling from 2017 to 2022 can be rewritten by President-elect Donald Trump, in a process that could take months or years.

Or days...

Besides Cook Inlet, the plan also allows drilling in the Gulf of Mexico, long the center of U.S. offshore oil production. Ten of the 11 lease sales proposed in the five-year plan are in the Gulf, mostly off the coasts of Mississippi, Louisiana, Texas and Alabama.

Curiously, none near Florida...

Confirming a decision announced this spring, the five-year plan also bars drilling in the Atlantic Ocean.

"The plan focuses lease sales in the best places - those with the highest resource potential, lowest conflict and established infrastructure - and removes regions that are simply not right to lease," said ~~soon to be ex~~ Interior Secretary Sally Jewell.

Posted by:Steve White

#4 Junkiron:
1) I never trust what amount to press releases on discoveries.
2) I suspect numerous delineation wells will be needed to confirm the possible size of the discovery.
3) I am not familiar with Caelus, but they will need very deep pockets to develop such a project - probably would have to partner with Exxon or BP.
4) It's in State waters, so should not be subject to most Federal regulations (operative word 'should' - lots of overreach lately.)
5) At only 2 miles offshore, wells could be drilled directionally from onshore pads.
6) Fracking, in the common (mis)understanding of the term, has not been employed in other projects on the North Slope, and would only be needed if the reservoir rock is of poor permeability, in which case it can't compete with West Texas projects due to much higher cost.

Posted by: Glenmore 2016-11-19 18:21

#3 On Oct. 4, 2016, Dallas-based Caelus Energy LLC announced it has discovered an estimated 6 billion barrels of oil (in Arctic waters) under its current state leaseholds in Smith Bay, an area southeast of Barrow Alaska. The company says the wider Smith Bay area could contain as much as 10 billion barrels of oil.

Smith Bay is located along the coast of the Beaufort Sea 150 miles west of Prudhoe Bay. The Caelus leases are in state waters, north of the National Petroleum Reserve-Alaska.
Maximum water depth of the lease is less than 33 feet.
Exploration wells were drilled from ice islands less than 2 miles offshore in water just 4 to 6 feet deep.
Because of the light viscous quality of this oil and the structure of the oil bearing formation, fracking of wells in this area cost substantially less than fracking of similar oil wells in most areas of the lower 48 states.

Caelus chief executive and chairman Jim Musselman described it as the largest oil find in Alaska in more than 40 years, and that the field could begin producing oil in late 2022.
Dubbed the Smith Bay development, Caelus estimates the field could potentially provide 200,000 barrels of oil per day.

It is obvious that President Obama will do everything in his power, during the remaining months of his presidency, to permanently prevent any further development of this gigantic oil discovery.

Posted by: junkiron 2016-11-19 16:13

#2 Given the new reserves in Texas it is probably noat attractive to expand up there. But Pres Trump should reverse this anyway, just on the principles of the thing.

Posted by: OldSpook 2016-11-19 12:10

#1 I don't think there's much industry interest right now anyway: costs - including the long time lag to production (if any) - are not competitive with fracking in developed areas.

Posted by: Glenmore 2016-11-19 09:21

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