Tuesday, June 1, 2010

Deepwater drilling going ahead despite eco disaster

The desperate ongoing operation to contain the Gulf of Mexico oil disaster is not deterring the Canadian government from “soliciting bids” for offshore drilling, according to press reports.

Deepwater drilling going ahead despite eco disaster

The BP Deepwater Horizon spill is becoming a milestone ecological disaster: the US’s largest ever oil spill, now estimated to have been gushing between 12,000 and 25,000 barrels of oil into the Gulf each day since April 20. It has already polluted more than 99 miles (160 km) of Louisiana’s coastline (see pic, left, of a pelican attempting to clean oil from itself) and – according to latest estimates – there is a high chance that the chemicals used to disperse the spill will find their way into the food chain.

These dispersants, “a cocktail of organic solvents and detergents” that have never previously been used at the depth of BP's well, are linked to a six-mile (10-km) wide “oil cloud” reaching two miles (3 km) below the surface, that stretches 22 miles (35 kilometers) northeast of the well disaster.

BP’s CEO Tony Hayward has reportedly said the topkill procedure has so far been “partially successful,” apparently temporarily halting the oil leak – but the next challenge will be putting a cement plug in the well. According to a report, All-out effort to tame Gulf blowout вЂpartly successful,’ says BP boss, in the May 29 Vancouver Sun newspaper:

BP’s Hayward said he continued to put the chances of success at 60 to 70 per
cent and said it would be Sunday before officials could determine whether to
inject concrete into the pipes, the last step in the process of killing the

Yet despite US president Obama’s six-month freeze on offshore drilling, the Canadian government is “moving ahead with plans to grant new offshore oil-exploration licences in Canada's Arctic,” according to a separate Vancouver Sun report, Canada still inviting offshore drilling bids. It states:

Moreover, any company granted an exploration licence in Canada's portion of the
Beaufort Sea will be subjected to less environmental scrutiny than companies
wishing to explore on the U.S. side, critics say.

U.S. President Barack Obama announced this week that his administration has extended its moratorium on new offshore drilling. Canada is still soliciting bids for exploration licences in the Beaufort Sea and the Mackenzie River delta in the Northwest Territories. The locations up for grabs include a parcel of land roughly 200 kilometres offshore, to the west of existing leases owned by BP and Imperial Oil.

BP has begun seismic testing of the sea floor in the Canadian Beaufort, the article continues. Meanwhile, according to the Calgary Herald, Imperial Oil Ltd. (and its majority stakeholder, ExxonMobil Corp.) “were awarded exploration rights for a parcel in the Arctic region in 2007. The two paid $585 million for the Beaufort Sea acreage, and have yet to drill a well there.” Imperial CEO Bruce March said the company was “at least four or five years out from ever drilling a well” in the Beaufort Sea.

So why would the Canadian government be continuing to grant offshore oil-exploration licences in a pristine and fragile wilderness even as an environmental and ecological disaster unfolds in the Gulf of Mexico?

The short answer: peak oil. The easy-to-extract oil has been used, and we are at the end of the cheap oil. Industry needs oil, and governments need thriving economies and the revenue that extraction can bring.

In addition, there’s a geopolitical game going on in the Arctic sea area.

As Canadian Business reports, the government of Greenland is allowing a major push in its territory here, right alongside the Canadian border. The item, Greenland to Canada: don't worry, our offshore drilling rules best in world, states:

A Scottish oil company plans to drill four wells west of Greenland's Disko
Island and right next to Canadian waters and those are only the beginning.
Greenland has sold exploration leases down almost the entire maritime border.

The item goes on to state that that the “exploration wells the territory plans for this summer in the Davis Strait” will be drilled under far more stringent safety regulations than Canada’s. (They'd have to be, considering Canadian rules are even more lax than those in the US, where oil giants have been lobbying government hard for decades.)

According to the business pages, the next major push for oil is going to be in the Arctic sea. Deepwater exploration is not going to end, despite Obama’s much heralded moratorium and other statements from politicians. Put bluntly, the oil companies need to go where the oil is. And with the underperforming and expensive oil sands, the only place is offshore.

Surely, peak oil is here.

The Peak Oil Crisis: After the spillGulf spill won’t dampen U.S. appetite for oil

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