Filed under: Politics | Tags: Chuchki Sea, Energy, Royal Dutch Shell, The Arctic
If you want to learn something about the energy business, take notice of the current environmental hissy-fit over news that the Obama Administration might allow a teeny bit of oil drilling in the Arctic.
The federal Bureau of Ocean Energy Management has finally issued conditional approval to Royal Dutch Shell to begin exploratory drilling in the Chukchi Sea off the coast of northwest Alaska. The Arctic Ocean is estimated to hold at least 30 billion barrels of oil, and a potential 30% of the world’s undiscovered natural gas. A fresh stream of Arctic oil would replenish the Trans-Alaska pipeline and continue the U,S. energy boom driven by the shale revolution.
The real story is how long Shell has had to wait and how tentative this approval still is. Shell was awarded its leases in 2008 and has spent six years and $6 billion waiting to be able to exploit the contracts. The conditional approval on Monday means Shell must still obtain seven federal and state permits before it can touch a drill bit. The decision also comes with a bevy of new rules and restrictions on Shell’s operations. All this to begin a handful of exploratory wells.
Shell wants to start this summer after the ice breaks, but environmental groups will certainly go to court to try for further delays. The WSJ adds that:
The Administration seems to have made an exception for Shell in part because it was running out of excuses for delay. Our sources add that the government would lose all credibility with industry and the public if it reneged on such a costly lease contract.
President Obama’s decision to honor Shell’s drilling leases also must be viewed against his push to close off most other exploration. In 2010 Mr. Obama shut down half of the National Petroleum Reserve-Alaska. Earlier this year he used executive authority to wall off most of the Arctic National Wildlife Reserve, and he’s put most of the Arctic Ocean off-limits.
The green Left is howling about “license to despoil our last pristine ocean” but things have not been going well for them. The price of gas has dropped significantly enough to be a boon to the average family. Demand for electric cars is way off, the huge investment in wind and solar has resulted in chopped up eagles and solar-fried birds by the thousands. And green-energy companies keep going bankrupt. Taxpayers are soaked for $150 billion for wind and solar alone.
The Federal Bureau of Ocean Energy Management must be a new invention of the Obama Administration in Obama’s ongoing efforts to grow the size of government. Russia has an aggressive program of Arctic exploration and Arctic dominance. They have rebuilt and reestablished their former Arctic bases and clearly are driving to dominate the region.
Americans need to remember that the American economy runs on energy, preferably cheap energy. It means more jobs, more prosperity, more innovation and more entrepreneurs. Leftist propaganda aside, that’s a good thing. If you are keeping tabs of the things that are a drag on the economy, consider over-regulation, and the cost of useless environmental lawsuits and wait times to get approval from a federal agency. Our government does not have to work so badly. Real efficiency may be asking too much, but there is always hope.
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