In a spectacular miscalculation, Obama administration allows Shell to drill for oil in the Arctic

May 12, 2015 • 11:08 am

Some “environmentally sensitive” administration! The Obama administration, curses be upon it, has just announced that it will grant permits to Shell to drill for oil in the Arctic, off the cost of Alaska. The decision, of course, is being universally applauded by petroleum companies and decried by environmentalists. I don’t know a single environmental organizations that’s in favor of this.

The dangers are clear: the seas are rough, the logistical problems are formidable, and there are animals who breed, feed, and migrate there. In case of an accident, help will be very far away. Do we really need the oil that badly, or is Big Oil simply leaning on the administration?

And let us be clear: the question is not whether there will be a spill that devastates the environment, but when. But of course when it happens, Obama will be long out of office, and there’s nothing we can do about it.

Everything that needs to be said about this stupid venture is in these paragraphs from today’s New York Times:

The Obama administration had initially granted Shell a permit to begin offshore Arctic drilling in the summer of 2012. However, the company’s first forays into exploring the new waters were plagued with numerous safety and operational problems. One of its oil rigs, the Kulluk, ran aground and had to be towed to safety. In 2013, the Interior Department said the company could not resume drilling until all safety issues were addressed.

The report was harshly critical of Shell management, which acknowledged that it was unprepared for the problems it encountered operating in the unforgiving Arctic environment.

But the administration said that since then, the Interior Department has significantly strengthened and updated drilling regulations. And outside experts said that while the challenges of Arctic drilling were steep, the new plan surmounted them to some extent by allowing drilling only in the summer months and in shallow waters.

Regulations may lessen the chance of an accident, but they don’t reduce it to zero. Given enough time, we’ll have one. May Ceiling Cat have mercy on our souls, and, more important, on the souls of the fish, polar bears, beluga whales, narwhals, and other animals who are about to get coated.

I feel betrayed.

64 thoughts on “In a spectacular miscalculation, Obama administration allows Shell to drill for oil in the Arctic

      1. He probably thinks that lots of carbon will build up the land to keep it above the rising sea.

  1. Based solely on TV coverage on this issue that I saw last night, it’s my understanding that these were leases given out by the GWB administration and were bought and paid for by Shell years ago. According to the NYT reporter being interviewed, her opinion was that the Obama administration had little choice, that if the the permits weren’t eventually issued then the government would be sued by Shell and almost certainly lose.

      1. I think it’s more a power abuse than a default mode of operation. To pick one example, here in the UK, according to The Establishment by Owen James, even conservative voters overwhelmingly support policies such as the nationalization of railways and other public services. Yet such views are practically absent and even marginalized in the major political parties in favour of more neoliberalist attitudes.

        I think most people are intelligent, moral, and think about the future, give or take whatever scope their particular culture gives. But in any case, the more power and opportunities for abuse you give them, the more they become stupid, selfish, and short-sighted, even in a democracy.

      2. I think most people are – or at least try to be – intelligent, moral, and thoughtful about the future. It’s when you give them strings to pull, crate-loads of money, and little in the way of dissent that they lose much of those qualities. It seems to me to be power abuse more than some universal default mode.

        1. Darn, the previous comment didn’t show up the first time, and I lost the words, so I posted a shorter alternative. I didn’t realize it was just a delay. Sorry!

        2. I wish that were the case and most of us could, in fact, act in a coordinated way, thoughtful of future consequences of our actions, looking at the problems in a holistic way, and had the capacity to give a damn about the host of problems that bedevil our societies.

          But unfortunately most of us are still busy ‘amusing ourselves to death’ with omnipresent entertainment!

  2. Hydrocarbons are ridiculously simple, chemically speaking. Audi is creating high cetane diesel fuel out of carbon dioxide and water using renewable energy sources. The product will sell for a competitive price and effectively closes the carbon cycle. The end of fossil fuels is nigh (though, perhaps, not hydrocarbons). We have the technology to never need to drill another well but somehow crashing ships and risking lives and ecosystems in the Arctic is a viable financial alternative. I guess if it’s all you know how to do, why bother changing?

    1. Audi is creating high cetane diesel fuel out of carbon dioxide and water using renewable energy sources. The product will sell for a competitive price and effectively closes the carbon cycle.

      It’s a very doable process, but also very energy intensive.

      For all of history, drilling oil has released more energy than it’s consumed. That makes petroleum fuels both an energy source and a very convenient energy transportation mechanism.

      But it takes a lot more energy to extract and refine oil today than it ever has before. It’s still a net producer of energy, but far less profitable — both energetically and financially.

      And the deeper we have to dig for poorer and poorer quality deposits, the worse it’s going to get.

      That’s really, really, really bad news for our civilization.

      Alternatives to petroleum use some other energy source and “reverse-burn” carbon dioxide in some fashion so it can be re-burned in an engine. From what I’ve seen, those sorts of things only become financially competitive with petroleum in the $200 / barrel range, and it’s not clear if our civilization can function as currently structured with energy prices that high.

      It’s also generally a rather inefficient way of going about things. It pales in comparison, for example, with rooftop solar charging the batteries of an electric vehicle.

      …but the problem is that agribusiness needs diesel to power farm equipment (batteries are a long way from being viable) and to get the crops to processing plants and markets (electric long-haul trucking is also a long ways away) and, especially, for fertilizer and pesticides (without which crop yields plummet to levels insufficient for our current population). And airliners need petroleum (no battery options foreseeable), oceangoing cargo ships need either petroleum or nuclear, lubricants and plastics are all made from petroleum…

      …which is why we may well be fucked no matter what.

      Could also be the answer to the Fermi Paradox….


      1. I just got rooftop solar in my house up north, but the energy required to place an electric vehicle up on the roof, to charge batteries, seems excessive.

      2. Much of the oil for agriculture, trains and trucks could easily be replaced by natural gas. Trains have already been tested to run on LNG. The major problem with LNG is lack of distribution centers and it’s a less dense energy source, which is not a big problem for ships and trains. Some ships have used modern automated sails, computer controlled to get the best possible fuel economy.

        I would also point out that many train tracks already have electric utilities running beside them, they could come up with tech to run trains off electricity, such as cable cars, or use hybrid trains which already exist, and use current electric power lines to charge the batteries as the train is moving.

        Most of these haven’t become widely used because energy costs haven’t risen high enough to make it worth while, because the systems are already very efficient.

        Currently natural gas is used for creating the majority of fertilizer via the Haber Bosch process.

        A large amount of natural gas is simply burned off into the atmosphere, there is such a large glut it’s not worth storing and transporting.

        The transportation and mechanization costs of modern agriculture is considered to be about 1 to 2 percent of the retail cost of food in the first world, even food that is transported across oceans. The transportation system is very fuel efficient, especially container shipping and trains.

        Oil costs could double, even triple and it would have little effect on the first world food costs, where labour is the major costs. The people who would be hit hardest is the third world where labour is cheap and energy and basic foodstuffs like grain is comparably a large percentage of cost of staple foods.
        The first world would be hit hardest by high gasoline prices, and those would be offset by higher efficiency for passenger vehicles, especially in the USA where efficiency has traditionally been poor, and gas has been cheap. Higher efficiency mandates in passenger vehicles has been shown to work, and hybrid and electric vehicle technology is still fairly young with plenty of room for improvement.

        When oil costs reach $150 and higher solar, wind, geo and hydro become clear competitors.

        I’ve heard some say oil will never again reach $100 dollars a barrel. Although I don’t believe this, there is competition among energy suppliers and it will likely offset the huge increases we will see from China, India and Africa.

        That is where we are really going to see problems, the increased demand will have significant impact on world prices. Those economies won’t be able to stand massive increases, so there may be a yo-yo effect on the economy, similar to what we saw as oil climbed to $150 every summer. Except much worse. After all, China, Africa and India have well over 10 times the population of North America, which is the largest user of petroleum products 30 percent of the US petroleum base is for industrial products including chemicals, fertilizers and plastics.

        Not only does the extraction need to keep up, but so does the storage facilities and refineries, which we have seen in recent years are close to capacity in North America. They will only be built in the west if there is the financial reward. They will be built in China since China has a longer outlook and doesn’t have to concern themselves as much with NIMBYism. China could come to dominate owning a good deal of natural resources and facilities to store them, although many Western banks went on shopping sprees for warehouses to hold refined natural resources so they could influence the markets.

        The biggest problem for the West will be changing the passenger transportation system. Luckily, there is at least one player who sees the necessity to create an electric vehicle infrastructure. If he can keep his company solvent and create a system, he will do very well for himself, and perhaps prevent a huge problem for North America. Or at least the North American’s who are willing to stop driving thirty year old pickup trucks.

        Otherwise it would be unlikely to see anyone else create a retail vehicle fueling infrastructure to replace gasoline over the time needed. We could wind up being hit with huge energy cost increases, with many people unable to afford gas to fuel their vehicles, and not enough money to buy a new fuel efficient or electric vehicle.

        On the other hand, driverless cars to make the problem moot. With a single driverless car able to serve some 20 to 40 people in a day, the costs of owning a highly fuel efficient vehicle costs could plummet to $2000 a person per 10 years, energy costs not included.

  3. ” . . . it will grant permits to Shell to drill for oil in the Arctic, off the cost of Alaska.”

    Jerry, I think you must mean “at the cost of Alaska.”

  4. Gee, I don’t know how that could end badly?

    When’s the last time there’s been an appreciable catastrophe involving oil?

    And I’m sure Exxon feels real bad about that silly little spill decades back, and they will eventually clean up the rest of it very soon.

  5. At current oil prices, I doubt it is economical to produce crude oil offshore in Alaska. Having said that, with those permits in place, Shell can book additional reserves and get their share price inflated. Let’s not panic over something that may never happen.

    1. There’s an unfortunate paradox facing civilization.

      You’re right; it might not be profitable or even affordable to start new drilling operations in Alaska or anywhere else at today’s prices.

      But it’s not clear, either, that people can afford to pay what it would cost to make drilling profitable, either.

      Which means that we could “run out” of oil in quite an hurry, even though there’s still roughly as much oil still in the ground as we’ve already extracted. The oil will still be there, but nobody can afford to dig it up.

      This isn’t the good news an environmentalist might think it is…without oil, we have no modern agriculture. Without modern agriculture, billions of people die of starvation and civilization as we know it ends in an horrific apocalypse.

      Prepare for interesting times….


      1. I don’t understand why diesel would be so integral to modern agriculture. Surely, so long as you got the power, it doesn’t matter where it comes from?

        Or is the emphasis on modern agriculture, implying an alternative method?

        1. All the equipment in the field and on the roads right now runs on diesel. Replacing all that equipment at any rate faster than normal decades-long fleet replacement cycles would be as economically catastrophic as anything else.

          Worse…we don’t actually have anything that could replace diesel, save for synthetic diesel made in energy-intensive processes. A big part of the problem we’re facing is shortages of energy…so switching to something that uses even more energy is quite a problem.

          Sure, if we were starting from scratch it wouldn’t be a problem. But not only are we not starting from scratch, it’s questionable whether or not we’ve got enough petroleum left to keep things going long enough to be able to transition to something else.


              1. No, none of it is new, it’s the same as it’s always been I’m pretty sure.

        2. There are also many other products we need petroleum (at present) for – the entire chemical industry from plastics to pharmaceuticals – to a first approximation, anyway.

          I would love to see more research in extracting carbon dioxide from the air so we can *make* stuff with it, not burn it again.

          1. Syngas from CO2 is pretty straightforward; you just need energy.

            I seem to recall that the Navy has a demonstration unit that can produce jet fuel from ambient CO2 dissolved in sea water using surplus energy from a ship’s nuclear power plant, and do so at prices competitive with what they currently pay for petroleum-based jet fuel. That’s a pretty big step in that direction.

            Also potentially promising are algae-based bioreactors that turn sunlight directly into refinable oils. Works great at laboratory scales…not so good at industrial scales in the wild. But a simple extrapolation suggest that it should be cheaper than Fischer-Tropsch.

            Of course, knowing how to do it is one thing…actually doing it on the same scale as we currently pump oil out of the ground is another matter entirely….


              1. In principle…but not in practice.

                It’s very easy to turn a pig into sausage, but very, very, very difficult to turn a sausage into a pig.

                The simpler the reaction, the easier it is to reverse.


  6. Betrayal it is. Pres Obama is paying no attention to “400, game over.” (not an exact quote). This timid man has no true north, no convictions, evidently.
    I voted for him once. With high hopes – dashed.

  7. Obama has completely abandoned the
    Democratic Party and is siding with the GOP. This is beyond senseless. And why is he flying around cheer-leading for fast-track and the TPP? We’re just supposed to trust him that this time the trade deal will be different. No one is allowed to read it, but don’t worry, it’s going to help the middle class. I feel betrayed as well; not only by Obama, but by the entire political process. I am beyond cynical now, and I’m really pissed that I am. I vividly remember when Obama was first elected, and I was filled with utter joy that things in this country would really change for the better. Wishful thinking. Obummer.

    At least I read today that the Senate did’t have the votes to pass fast-track authority. Do I dare have hope?

    1. I think the TPP is a good thing. I’m bemused by the frequent opposition of my fellow liberals to free trade deals.

      I wonder if it’s because the voice are opposing it are normally trustworthy ones like Elizabeth Warren, while those supporting it are the normally untrustworthy one like the GOP?

      To me, opposition to free trade is bad economics. However, those supporting it often have bad reasons for doing so too – they’re often still believers in trickle-down economics, which has, thankfully, been debunked.

      1. The main objection I heard about is that disputes get settled by an international board and therefore the US will be giving up some of its sovereignty. Not a lot of countries would be impartial.

        1. I’ve heard rumours like that and other stuff too. The problem is, no-one knows what’s in it, so it’s hard to judge.

          Several of the objections have been made here too. Our negotiators have not addressed them specifically, as they can’t legally, but they have said that there’s a lot of misinformation and outright lies about what’s in the deal.

          We have a lost of FTAs, and our negotiators haven’t let us down yet imo. Given that we’re a tiny country with no power, we should have a lot more to worry about than America. In the past, all the horror scenarios from those opposed to the deals have proved groundless fears.

          1. There has never been a trade agreement that meant more middle-class jobs in America (I don’t know about New Zealand). It opens the door for outsourcing, simple as that. If the TPP is any different, then allow the public and experts and Congress to read the damn thing. I’m not going to take Obama’s word for it (or any other foreign leader’s). If it’s so good, then show it off. And it’s also true that just about anything the GOP wants nowadays means good for the 1%, bad for everyone else. Also, as New England Bob stated, there are some serious sovereignty issues that have been leaked. If a foreign corporation operating in America finds that something in the US infringes on their profits (regulations for example) they can sue in a non-US tribunal: bye, bye EPA. As far as anyone knows, this is a huge corporate handout and nothing more. And I can’t state it enought, if the TPP is such a great “partnership”, then let us see it.

            1. FTAs have meant a lot more middle class jobs in NZ, and other positive things too. They’ve been very good for our economy.

              If FTAs are leading to a lot of outsourcing that’s a sign of a badly structured economy, although that comment is no help to the people who are losing jobs because of it of course.

              I’ve heard about the sovereignty thing, and I agree it’s a problem if it happens. I know our negotiators would be opposed to it, and I can’t imagine any government willingly letting that happen. So if someone is trying to do that, I’m not sure how successful they’d be. We’ve already got issues because the tobacco companies don’t like our anti-smoking laws and they’re trying to sue us using intellectual property laws. The a-holes are already trying it on with Australia.

              I understand that everyone wants to see it. I’d like to see it too. But as it’s also commercially sensitive and I can’t really see a way around that. I think we’re likely to get a better deal if we let the professional negotiators get on with it. I assume your country is similar to ours – it will have to be ratified by parliament (congress for you I suppose?) before it becomes law.

              1. Given the (very) little I know about NZ, my WAG is that there is some improvement in NZ the way there was a modest *in some sectors* (certainly not agriculture, for example) improvement in Mexico after NAFTA – at the expense of the US and Canada. (I am running on the imperfect analogy US:Canada/Mexico::Australia:NZ).

          2. The problem is, no-one knows what’s in it, so it’s hard to judge.

            No, it’s very easy to judge.

            Governments rule by the consent of the governed. If the people, even their elected representatives, must be kept out of a trade agreement, it cannot possibly be done with the consent of the governed.

            Doesn’t really matter what’s in it; the secrecy is enough to damn it all the way to Hell.


      2. If the TPP is going to be so great, why is it a secret? There appears to be a lot more to the TPP than free trade, but it’s hard to say because they won’t tell us anything about it.

        1. This in itself should be enough to regard it with utmost suspicion. I don’t understand how even “big picture” discussions of such things can be secret in countries that claim democracy. (That of course is the real point – the sham nature of our democracies.)

  8. I’m having trouble getting my head around why Obama would support drilling in the Arctic but is opposed to the Keystone pipeline. It seems that in these two cases, who pays the bills is making the decisions.

    However, we can’t stop drilling for oil. Ben Goren has made lots of good points about this. We can and should replace electricity with renewable sources, but that is not yet a viable option for many other things we use the oil for.

    If we stopped drilling, eventually billions would literally starve to death, though we’d probably see much more conflict (i.e. war) before it got to that stage. Already many countries cannot feed themselves, and much of Asia, especially those who rely on the Himalayas etc for their water, are running out of water too because of global warming. The US relies almost entirely on drought-stricken California for its fruit and veges.

    Governments need to invest more in R & D for for alternative energy sources. This is not a problem that can be solved by the market as parties like the GOP insist. In the meantime we unfortunately need to keep on drilling – our survival depends on it. Everything possible should be done to ameliorate the risks of course.

    Also, as Diana McPherson says, in the current environment, it would probably be far too expensive to actually drill in the Arctic seas anyway. By the time drilling there becomes essential, we should have even safer methods of extraction (these are constantly improving), or, with a bit of luck, we will have developed other energy sources.

    1. However, we can’t stop drilling for oil. Ben Goren has made lots of good points about this.

      Thanks…but the other half of the problem is that, though we can’t stop drilling, we will stop drilling for the simple fact that we’re fast reaching a point where nobody will be able to afford to drill the oil that’s left.

      Long gone are the days when you had to be careful in Texas with your pickaxe lest you set off a gusher…we’re now literally scraping the proverbial dregs: tar sands and shale oil. For the longest time they were a joke because it’s just too expensive to extract those “reserves,” and because you don’t get all that much to show for your effort. But today they’re where the action is at…and the only thing after that are the Arctic reserves which don’t even have all that much oil in them, period.

      So, we can’t stop drilling, but we will stop drilling. Not a recipe for happily-ever-after….


  9. I don’t see why we’re so eager to dig stuff out of the ground now in any event (although maybe this is a complaint more about the excessive influence of the minining lobby in Australia). The stuff will stay there for as long as long as we’re willing to wait.

  10. To what degree is the failure of Obama to live up to left-wing hopes a personal failure due to cowardice, incompetence and corruption? And to what extent is it due to the structural failure of the US political system making it impossible for anyone to succeed against the interests of the billionaires who own America? I suspect it’s more to do with the latter than the former, and until the system is fixed (if it can be) there will be little chance of the USA again being the middle class paradise that it was for about two decades in the 20th century.

      1. Yes…but the problem is that that’s pretty much a one-way function. It would take more money than the plutocrats themselves can muster to accomplish….

        Historically, the only way out of this sort of systemic corruption is some variation on the theme of revolution or collapse…and, even then, it’s a long time, if ever, before recovery for the common folk….


        1. Things got a lot more liberal during the late 60’s/early 70’s, due largely to the draft, IMO. People on campuses started really paying attention, and then raising a stink.

          We certainly had the military-industrial complex to contend with back then, but grassroots populism scored a lot of points and made a lot of progress despite it. IMO we would still have the power of numbers today, if only we could figure out how to mobilize them and show them how to understand just who is really on their side vs. who isn’t.

          1. The problem is that elections are no longer a battle of ideas and words, but of money. Liberalism won the battle of ideas the past couple Presidential elections; Obama’s speeches are everything you could ask for. But it was Big Money that actually won, as evidenced by what Obama has actually done.

            Worse, the security apparatus is now in a position where it can play Watergate-style games with elections whenever it wants…and their continued immunity to prosecution in the face of ever-increasingly-outlandish revelations of the most egregious actions pretty much confirms that they’re more than happy to keep in line anybody who steps too far out of line. By now, they don’t even have to actually spy on anybody; they can simply let slip that they’re ready to plant pictures of child pornography on the politician’s cell phone and that’s that.

            It’s very, very hard for a grassroots movement to do much of anything in the face of that much money and espionage abilities. Again, historically…conquest or implosion has been the endgame from where we’re at now, with more than one excursion into naked tyranny.


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