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Shell to quit US Arctic due to "unpredictable federal regulatory environment"

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  • #16
    One of the results of 5 years of regulatory malfeasance, was a new requirement that Shell have a second drilling rig on contract, standing by (doing nothing) within close proximity to their first exploration well, just in case they needed to drill a relief well...
    Murkowski: Shell decision shows how feds ‘chase business away’
    By Liz Ruskin, APRN-WashingtonSeptember 28, 2015Arctic, Environment, Featured News, National Government

    [...]

    Murkowski says dry holes are a fact of oil exploration, but she blames the federal government for curtailing Shell, and for frustrating Alaskan efforts to portray itself as “open for business.”

    “You’ve got a very, very difficult federal regulatory environment that can chase that business away,” she said. “And we saw that over the course of seven years and $7 billion of commitment from Shell.”

    Murkowski, who as chairman of the Senate Energy Committee, helps shape the nation’s energy policy, named one government decision as a particularly troubling impediment. The company intended to run two drilling rigs at the same time, 9 miles apart.

    The U.S. Fish and Wildlife Service said no, citing a pre-existing rule requiring a 15-mile buffer between rigs to protect walrus. Murkowski says forcing the company to use just one rig at a time was a big blow to Shell.
    “That wasn’t part of what they had anticipated. That was a huge financial setback for them — having that rig on standby,” she said.

    [...]

    http://www.ktoo.org/2015/09/28/murko...business-away/

    A new rule forced them to have a second rig (at a cost >$500,000 per day) nearby. An old rule prevented that rig from doing anything useful.

    In the Gulf of Mexico, where there are numerous wells drilling at any one time, the secondary rig is almost always working for another company. In the event of a blowout, it can quickly be mob'ed in to drill a relief well. In the GOM there are work-arounds for Federal lawlessness. This isn't the case on the Alaska OCS.
    Watts Up With That? | The world's most viewed site on global warming and climate change.

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    • #17
      Originally posted by The Doctor View Post
      That was their excuse for imposing an unlawful "dynamic regulatory environment" on the US OCS.
      You wouldn't happen to know just how much oil was spilled or what the cost was to clean it up or to the economies of the affected areas would you? I know I lost money on my BP stock investment.

      I wonder how that would play out in a much harsher and more fragile environment. Could Shell even get the necessary resources into the area in a short time to clean up any mishap. How long did it take in Prince William Sound and that was in a more accessible area.

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      • #18
        Originally posted by Gorque View Post
        You wouldn't happen to know just how much oil was spilled or what the cost was to clean it up or to the economies of the affected areas would you? I know I lost money on my BP stock investment.

        I wonder how that would play out in a much harsher and more fragile environment. Could Shell even get the necessary resources into the area in a short time to clean up any mishap. How long did it take in Prince William Sound and that was in a more accessible area.
        BP covered the full cost of the spill several times over.

        In 60+ years of drilling and production activities, Macondo was the only accident of this magnitude on the GOM OCS. It was primarily due to the complacency that had set in after six decades of no serious accidents.

        Such complacency is unlikely to return to OCS operations any time in the forseeable future. It was the equivalent of Apollo 207, Apollo 13, Challenger and Columbia all happening at the same.time.
        Watts Up With That? | The world's most viewed site on global warming and climate change.

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        • #19
          Originally posted by The Doctor View Post
          BP covered the full cost of the spill several times over.

          In 60+ years of drilling and production activities, Macondo was the only accident of this magnitude on the GOM OCS. It was primarily due to the complacency that had set in after six decades of no serious accidents.

          Such complacency is unlikely to return to OCS operations any time in the forseeable future. It was the equivalent of Apollo 207, Apollo 13, Challenger and Columbia all happening at the same.time.
          The change in the regulations as a result of the Macondo blow-out was a knee-jerk reaction akin to the tightening of the firearms regulations in Connecticut following the Sandy Hook massacre. The public was alarmed at what had occurred and the government responded with over zealousness in order assuage those concerns.

          In either case, the new regulations won't prevent a repeat of what had occurred.

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          • #20
            Originally posted by Gorque View Post
            The change in the regulations as a result of the Macondo blow-out was a knee-jerk reaction akin to the tightening of the firearms regulations in Connecticut following the Sandy Hook massacre. The public was alarmed at what had occurred and the government responded with over zealousness in order assuage those concerns.

            In either case, the new regulations won't prevent a repeat of what had occurred.
            No, but the huge fines allowed under the new regs and the even bigger cleanup costs go a long way towards being an incentive for the rapacious oil companies.

            Shell is dropping out because they won't make "record profits".

            Unfortunately, Alaska is going to have to come to terms with reality - oil trumps caribou and tundra, sooner or later, unless they want to go back to using blubber oil the way their Inuit ancestors did.
            Quis Custodiet Ipsos Custodes? Who is watching the watchers?

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            • #21
              Originally posted by Gorque View Post
              The change in the regulations as a result of the Macondo blow-out was a knee-jerk reaction akin to the tightening of the firearms regulations in Connecticut following the Sandy Hook massacre. The public was alarmed at what had occurred and the government responded with over zealousness in order assuage those concerns.
              The problem hasn't been tighter regulations. The problem has bee dynamic (constantly changing) regulations.

              In a mature area like the Gulf of Mexico, operators have managed to sufficiently adapt to the dynamic regulatory environment and maintain operations.

              In a frontier area, like the Chukchi Sea, there is no way to adapt to a dynamic regulatory environment.


              Originally posted by Gorque
              In either case, the new regulations won't prevent a repeat of what had occurred.
              The accident itself is the primary deterrent to future accidents of such magnitude. Very few companies are large enough to survive such disasters.
              Watts Up With That? | The world's most viewed site on global warming and climate change.

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              • #22
                Originally posted by Mountain Man View Post
                ...this is just another attempt by the oil industry to win sympathy for their obscene profits...Much ado about absolutely nothing...
                I agree.

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                • #23
                  Originally posted by III Corps View Post
                  I agree.
                  Originally posted by The Doctor View Post
                  100% pure ignorance.
                  Watts Up With That? | The world's most viewed site on global warming and climate change.

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                  • #24
                    Originally posted by The Doctor View Post
                    The accident itself is the primary deterrent to future accidents of such magnitude.
                    BP, IMHO, consistently pushed the safety/maintenance limits, e.g. Prudhoe Bay pipeline, Texas City refinery and that the stricter regulations were emplaced with just such a company in mind. Unfortunately for the other companies involved in the industry and whose safety/maintenance procedures were better, they too got caught up in the new reality.
                    Very few companies are large enough to survive such disasters.
                    No insurance coverage for such unforeseen events to defray some of the loss?

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                    • #25
                      Originally posted by Gorque View Post
                      BP, IMHO, consistently pushed the safety/maintenance limits, e.g. Prudhoe Bay pipeline, Texas City refinery and that the stricter regulations were emplaced with just such a company in mind. Unfortunately for the other companies involved in the industry and whose safety/maintenance procedures were better, they too got caught up in the new reality.No insurance coverage for such unforeseen events to defray some of the loss?
                      Not enough...
                      Attached Files
                      Watts Up With That? | The world's most viewed site on global warming and climate change.

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                      • #26
                        Originally posted by Mountain Man View Post
                        No, but the huge fines allowed under the new regs and the even bigger cleanup costs go a long way towards being an incentive for the rapacious oil companies.

                        Shell is dropping out because they won't make "record profits".

                        Unfortunately, Alaska is going to have to come to terms with reality - oil trumps caribou and tundra, sooner or later, unless they want to go back to using blubber oil the way their Inuit ancestors did.
                        Record / Obscene profits?...

                        http://www.businessinsider.com/secto...-sp-500-2012-8





                        The energy sector hardly is the most profitable business to be in.

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                        • #27
                          Originally posted by T. A. Gardner View Post
                          Record / Obscene profits?...

                          http://www.businessinsider.com/secto...-sp-500-2012-8





                          The energy sector hardly is the most profitable business to be in.
                          Did you just do a "Doc"?

                          Not according to the announcements they make to their shareholders year after year after year, particularly ENRON.

                          This last year is the first time in a long time when they have felkt the pinch just a little.
                          Quis Custodiet Ipsos Custodes? Who is watching the watchers?

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                          • #28
                            Originally posted by Mountain Man View Post
                            Did you just do a "Doc"?

                            Not according to the announcements they make to their shareholders year after year after year, particularly ENRON.

                            This last year is the first time in a long time when they have felkt the pinch just a little.
                            Enron wasn't an oil company and it hasn't existed in about 12 years.
                            Watts Up With That? | The world's most viewed site on global warming and climate change.

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                            • #29
                              Hark! Far off in the distance, is that the sound of the Big Oil cheerleading squad, armed with charts and graphs on their pom-poms?



                              Quis Custodiet Ipsos Custodes? Who is watching the watchers?

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                              • #30
                                Originally posted by Mountain Man View Post
                                Did you just do a "Doc"?

                                Not according to the announcements they make to their shareholders year after year after year, particularly ENRON.

                                This last year is the first time in a long time when they have felkt the pinch just a little.
                                To do a "Doc" I'd have to put graphs in every post I make... That'll happen

                                ENRON wasn't a energy production company. It was a middleman provider that took advantage of electrical power deregulation and the way the electrical power market worked.

                                ENRON's greatest profit came from exploiting the stupidity of California's electrical deregulation scheme. What California's idiot government did was separate producers and suppliers. That is, a utility could either produce energy or distribute it, but not both. This was supposed to prevent monopolies.
                                What it overlooked was other regulatory burdens and how electrical power was produced and distributed.
                                So, what happened in California was during the summer months the state located electrical production companies "used up" all of their available production and pollution allowances (yes, the state regulated how much pollution an electrical plant could produce and fined it if it exceeded that amount) to supply electricity. So, many local plants started shutting down for extended maintenance and such to avoid exceeding pollution limits. They didn't give a hoot about whether there would be a shortage to individual retail customers, their customers were distribution companies. Getting enough electrical power was those guys problem, not theirs.
                                The distribution companies were limited to short term contracts and had onerous pricing restrictions on them supposedly to prevent price gouging and monopoly-like practices by forcing them to always get the "best" price for electrical power they provided.
                                So, the result was a shortage of deliverable power in California. The distribution companies turned to the "Spot market" to get more, the only place they could really go. ENRON was a big player on the spot market. They wanted many times the normal price for the electricity they had purchased to deliver it to California. The distributers in California had little choice but to pay those near extortionist rates. But, unlike most companies that turned to the spot market for power they didn't need just an hour or two of power to make up for a peak load, they needed lots of power continuously.
                                Without being able to adjust rates, the California distributers went broke in nothing flat. They used up all their credit too. That's when the rolling brown outs started.

                                Alcoa aluminum for example jumped into the spot market at the time (I know this because I was buying truck loads of aluminum regularly for the US Navy). They shut down their west coast plants and sent the workers home for a month or more with full pay.
                                They then sold all the electricity they had purchased on long term contract at elevated prices to the state of California making a killing in the spot market just like ENRON.

                                Californian Leftist Progressive Democrat idiots caused the problem, plain and simple, not ENRON.

                                ENRON's problem was it's management decided to do illegal things with that huge profit for their own gain rather than manage the company properly. That is wholly a separate issue from what they did as a company in the energy market.

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