Should we be encouraging other countries to drill for oil while at the same time not allowing drilling in our own country?
Tuesday, 22 Mar 2011
Gulf Oil CEO Joe Petrowski says President Barack Obama’s weekend comments in Brazil that the United States looks forward to purchasing oil drilled for offshore by that nation “is rather puzzling,” and “hypocritical” as his administration has imposed a virtual moratorium on domestic drilling. The signal to purchase more foreign oil comes after the U.S. Export-Import Bank invested more than $2 billion with Brazil's state-owned oil company, Petrobras, to finance exploration.
“Any drilling, or any new production, especially production outside the Mideast – that is inherently unstable and probably is going to become more unstable as we move forward – is a positive,” Petrowski said Tuesday on Fox News.
“But why Brazil, when we could have the jobs and foreign exchange in this country, is rather puzzling – and I’d say somewhat humorous,” Petrowski told Fox News’ Neal Cavuto. “What is it about Brazil that they have that we don’t have?
“What concerns me – in addition to we are going to lose the jobs, and in addition to not having the foreign exchange – is one of the untold problems, I think, in the world oil markets, besides that we are getting too much of our oil from the Mideast, is 75 percent of our oil is being produced by government-run entities,” he continued.
“And I just have a theory that private companies are going to be more efficient in finding it, and getting it out at a more reasonable price, than state-owned companies,” Petrowski said.
Cavuto asked whether buying oil from Brazil is bad for the U.S. economy.
“It would be a lot better if we had the drilling here,” Petrowski said. “And it seems a double standard and it seems somewhat hypocritical [that] a country that desperately needs jobs, and we need them here, that we are encouraging other countries to create the jobs that we need.”
Shell Oil Company has announced it must scrap efforts to drill for oil this summer in the Arctic Ocean off the northern coast of Alaska. The decision comes following a ruling by the EPA’s Environmental Appeals Board to withhold critical air permits. The move has angered some in Congress and triggered a flurry of legislation aimed at stripping the EPA of its oil drilling oversight.
Shell has spent five years and nearly $4 billion dollars on plans to explore for oil in the Beaufort and Chukchi Seas. The leases alone cost $2.2 billion. Shell Vice President Pete Slaiby says obtaining similar air permits for a drilling operation in the Gulf of Mexico would take about 45 days. He’s especially frustrated over the appeal board’s suggestion that the Arctic drill would somehow be hazardous for the people who live in the area. “We think the issues were really not major,” Slaiby said, “and clearly not impactful for the communities we work in.”
The closest village to where Shell proposed to drill is Kaktovik, Alaska. It is one of the most remote places in the United States. According to the latest census, the population is 245 and nearly all of the residents are Alaska natives. The village, which is 1 square mile, sits right along the shores of the Beaufort Sea, 70 miles away from the proposed off-shore drill site.
The EPA’s appeals board ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project. Environmental groups were thrilled by the ruling.
“What the modeling showed was in communities like Kaktovik, Shell’s drilling would increase air pollution levels close to air quality standards,” said Eric Grafe, Earthjustice’s lead attorney on the case. Earthjustice was joined by Center for Biological Diversity and the Alaska Wilderness League in challenging the air permits.
At stake is an estimated 27 billion barrels of oil. That’s how much the U. S. Geological Survey believes is in the U.S. portion of the Arctic Ocean. For perspective, that represents two and a half times more oil than has flowed down the Trans Alaska pipeline throughout its 30-year history. That pipeline is getting dangerously low on oil. At 660,000 barrels a day, it’s carrying only one-third its capacity.
Production on the North Slope of Alaska is declining at a rate of about 7 percent a year. If the volume gets much lower, pipeline officials say they will have to shut it down. Alaska officials are blasting the Environmental Protection Agency.
“It’s driving investment and production overseas,” said Alaska’s DNR Commissioner Dan Sullivan. “That doesn’t help the United States in any way, shape or form.”
The EPA did not return repeated calls and e-mails. The Environmental Appeals Board has four members: Edward Reich, Charles Sheehan, Kathie Stein and Anna Wolgast. All are registered Democrats and Kathie Stein was an activist attorney for the Environmental Defense Fund. Members are appointed by the EPA administrator. Alaska’s Republican senator thinks it’s time to make some changes.
“EPA has demonstrated that they’re not competent to handle the process,” said Sen. Lisa Murkowski. “So if they’re not competent to handle it, they need to get out of the way.”
Murkowski supported budget amendments that would have stripped the EPA of its oversight role in Arctic offshore drilling. The Interior Department issues air permits to oil companies working in the Gulf of Mexico.