Trump approves first new Arctic oil drilling – by Russian-connected company, of course
It hasn’t even been two years since Shell abandoned it’s stupid and expensive arctic oil drilling campaign. But the Trump administration – that never met a stupid idea it wasn’t gung-ho in favor of – has reopened the can of worms. And of course, there’s a hefty Russian connection.
By Jeremy Bloom
Royal Dutch Shell plowed a craptacular $7 billion into 7 years of arctic exploration, only to back off when it became clear that it was never going to be cost-effective.
The new drilling approval goes to a tiny US subsidiary of an Italian company, Eni, which I somehow doubt has more resources than Shell to bring to this picnic.
What could go wrong?
Remember the disastrous BP oil spill? It took MONTHS to get that dumpster fire under control, and that was in the Gulf of Mexico, deep in the heart of one of the world’s most over-drilled regions, and right next door to the US oil-patch nirvana of Texas. It still took them weeks to get the equipment they needed to the s
ite, and even longer to figure out how to make the bleeding stop.
They’re still not sure they ever really got it under 100% control. And that was for a global giant oi
l company with an experienced clean-up team on call.
Now imagine how that disaster would have played out in the Arctic.
You’re thousands of miles away from all the equipment you need – it’ll take months just to get it there. Ditto for experienced clean-up crews. And conditions are some of the worst in the world – cold, stormy, choppy seas don’t make it easy to perform delicate underwater capping operations. Eni admits that an oil spill could unleash 21 million gallons of crude.
Oh, and the region is also one of the world’s most delicate ecosystems, already stressed-out beyond belief by climate change. The seals, birds, polar bears – all would be devastated.
Kristen Monsell, an attorney for the Center for Biological Diversity, said, “An oil spill here would do incredible damage, and it’d be impossible to clean up. The Trump administration clearly cares only about appeasing oil companies, no matter its legal obligations or the threats to polar bears or our planet.”
In their press release, the CBD adds:
The drilling is planned in Harrison Bay next to the Colville River Delta. The area is home to many imperiled marine mammals, including bowhead whales, polar bears and ringed seals. Birds from all over the world, including spectacled eiders and longtailed ducks, spend summers near where Eni will drill.
The Outer Continental Shelf Lands Act requires the Bureau of Ocean Energy Management to reject an exploration plan if it “would probably cause serious harm or damage to life (including fish or other aquatic life)” or to “the marine, coastal or human environment.”
Shell was trolled by Greenpeace, who hung banners from their oil rig and surrounded it with an army of kayakers. But it wasn’t bad publicity that drove Shell from the arctic – it was bad financials.
Has this company ever done arctic oil drilling before?
Of course. In Russia.
According to the company website, Eni has been operating in Russia since 2007, and currently gets 30% of their gas from the cooperative agreements with Russian oil behemoth Rosneft , initially signed in 2012. Just this past May, they locked down a more detailed agreement involving “exploration, production, refining, trading, logistics and marketing, petrochemicals and technology and innovation sectors.”
“The meeting consolidated previous agreements for the joint development of exploration activities in the Russian Barents Sea and Black Sea, and will underpin further opportunities between the two Groups.”
“This year, after the Khatanga area,” Rosneft’s Igor Sechin told Vladimir Putin, “we will drill in the Black Sea, then in 2018 – in the Barents Sea, and in 2019 we will return to the Kara Sea oil and gas province and also continue our work in the East Arctic.”
Why here, why now?
That’s simple. Eni had a lease on this corner of Alaska since 2005, but they hadn’t done anything with it, and it was set to expire at the end of 2017. If they sink a couple of holes now, the lease gets extended.
That’s why the Trump administration has rushed this into place with almost no public comment or oversight. They propose to start drilling in December, days before the expiration.
“Approving this Arctic drilling plan at the 11th hour makes a dangerous project even riskier,” Monsell notes.
The good news is: What Eni is proposing isn’t as difficult as Shell’s operation. Shell was doing deep-water drilling; Eni is just building off an existing drill site on an 11-acre artificial island in the shallows of the Beaufort Sea. The plan calls for basing there and sending extended-reach wells up to 6 miles out.
And at least under the current terms, this is just exploration – no oil will be pumped. So this whole exercise may be just to make their balance sheets look good, and get a foot in the door.
After Shell bailed, Greenpeace spokesman Travis Nichols commented, “Shell sunk $7 billion into this. They bullied regulators and ran roughshod over public opinion, doubling down on this huge bet, and they busted. I think that’s going to be a big warning sign to other oil companies.”
But the Trump (and Pruitt and Zinke and of course Koch) agenda very much calls for opening up the Arctic for fossil fuel exploitation. The fact that it doesn’t make the slightest amount of economic sense won’t slow them down.
The courts might – environmental and native Alaskan groups have sued. But there are powerful interests behind this.
Look for more leases to be signed. And possibly even more drilling.
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(Images by Coast Guard, Greenpeace, Rosneft, and Alamy)