EPA Red Tape Forces Shell to Delay Arctic Drilling until 2012 at the Earliest


Shell Oil has canceled its plans to drill for oil in the Beaufort Sea north of Alaska in 2011 but will now set its sights on the summer of 2012. The company has run into repeated regulatory hurdles in its attempts to explore for oil in America’s slice of the Arctic Ocean. Most recently, in late December 2010, the Environmental Appeals Board (EAB) sent air quality permits granted by the Environmental Protection Agency (EPA) back to regulators for revision. Pete Slaiby, the VP of Shell Alaska, cited “tremendous uncertainty”—and frustration—during a press conference in Anchorage to announce the decision. The company has been seeking the required permits for the past five years.

Shell had been prepared to drill in 2010 in multiple sites off the northern coast of Alaska, but those projects were put on hold following the BP oil disaster in the Gulf of Mexico. The company’s plans for 2011 called for a small armada of support vessels to accompany the Noble Discoverer drillship to the Beaufort Sea’s Camden Bay, where it would drill in shallow water. No energy company is currently exploring for oil and gas offshore in the region, though exploration is going forward in waters controlled by other arctic nations.

This is what qualifies as en energy policy under the Obama Administration.  Obama’s EPA grants Shell clean air permits only to have another entity within the same agency, the Environmental Appeal’s Board, take them away. In the meantime, the Middle East is in turmoil and the Obama Administration is found to be in contempt of court for refusing to observe a judge’s order to lift their ill-conceived and, frankly, suicidal drilling ban in the Gulf of Mexico.  I understand that Obama has no experience in, well, anything at all, but you’d think that there would be at least one adult on his team who understands the potential ramifications of basing an energy policy on fantasy alone.

The uncertainty cited by Shell is nothing new with Obama, as his lack of understanding of, and hostility to, free markets has been the hallmark of his tenure.    Shell is well aware of Obama’s incompetence, and they warn that if his administration doesn’t get their act together, and soon, they may not be able to begin operations in 2012 either:

Shell says that quick action by regulators will be needed if drilling is to proceed in 2012. The company is the biggest leaseholder in the region, and considers offshore Alaska a “world-class energy resource,” according to Slaiby. Shell is also working in arctic waters in Norway, Greenland and Russia.

If I were Shell, I wouldn’t be holding my breath if what we’ve seen so far from the Obama Administration is any guide. Today Obama went to Pennsylvania to deliver another one of his rainbow and unicorn energy speeches while totally ignoring the enormous natural gas reserves right below his feet, as Jazz Shaw noted in a piece today at Hot Air:

If one wants to give a speech on energy and jobs, there is probably no more ironic location to select than Pennsylvania. In Oil and Gas Journal this week, API policy adviser Stephanie Meadows explains the not terribly funny humor in this.

Meadows said that API’s release of the latest fracing guidance document was timely since US President Barack Obama was scheduled to visit Pennsylvania on Feb. 3 to discuss economic recovery and job creation measures.

“While he’s there, he will be standing on top of the second-largest natural gas formation in the world, the Marcellus Shale, which potentially could supply significant amounts of gas, produce new revenue for states and communities, and provide a major number of new jobs,” she said. “We call on the president to lend the full weight of his office to development of this resource in New York, Pennsylvania, and West Virginia.”

Despite the huge energy reserves and potential for significant job growth and industry investment, residents of both New York and Pennsylvania have been dealing with a series of threatened drilling moratoriums, government red tape and lawsuits from environmental groups. Even where the moratoriums have failed or been lifted, endless delays continue and the EPA has dragged its feet in response to landowners’ efforts to begin production while Democrats in Congress work to terminate any discussion of it.

In addition to the man-made global warming hoax, Democrats tell us one of the reasons we can’t drill for oil and natural gas is because it won’t help us now, that it will take years to build the infrastructure to get it to market. True enough, but by what logical contortion is this an argument to delay or completely shelve the development of our domestic natural resources.   We heard the same argument back in the middle 1990s with ANWR.  Democrats claimed it wasn’t worthwhile since it would take 10 years for the oil to begin flowing.  Even if true, had we started then, it would have been flowing for the past five years.   That would have been nice, yes?

Now the Obama EPA is doing everything they can to delay any energy project that may actually produce energy and, at the same time, tell us that it will take too long for these projects to come to fruition.  It would be useful if Obama would deign to enlighten us as to why it makes sense to effective ignore huge “world class” domestic energy reserves such as the Beaufort Sea and the Marcellus Shale formation.  It shouldn’t be difficult for Obama to explain his policies to us serfs since he is, after all, the smartest president in the history of the Republic.  Or so we’re told.

Update: More on Shell’s decision to postpone energy development from the AP’s Dan Joling here.

(h/t C Bogue)

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