Over the weekend an Argentine judge ordered the seizure of $156 million and other assets from British and US oil companies exploring for oil in waters off the Falkland Islands. The Falkland Islands have been a disputed territory since colonization by Europeans, and the islands have had French, British, Spanish, and Argentine settlements. The UK has asserted control since 1883, and the islands were the scene of a fairly brief but deadly war between the UK and Argentina in 1982. Recently, the rhetoric from Argentina has heated up with the discovery of significant oil reserves. This judicial ruling is the most recent in a series by the government to stop exploration and potential development by other countries. Although there is little Argentina can do to enforce these orders, they do create uncertainty and cast a pall over any attempted development in this frontier region.
In the “Say it isn’t so” department, on June 11th the city of Los Angeles announced that it has dropped plans to buy electricity from the Soda Mountain Solar Project proposed for the Mojave Desert, just south of Baker, CA. City officials said that the project would be too damaging to bighorn sheep, desert tortoises and other wildlife near the site. This decision has left developers scrambling to find other customers and has put the project at risk. At a time when the State of California has reached an impressive milestone of 25% of its power needs from renewable sources, including 5% from solar power (over 10 times the national average), maintaining momentum in the quest to convert from fossil fuels to renewable power is critical. One would expect that environmental groups that have lobbied for so long and hard such a change would be embracing projects such as Soda Mountain. Particularly when the Bureau of Land Management (BLM) has issued its final Environmental Impact Statement (EIS) which includes a modified proposal that responds to concerns raised by the public and various agencies about the project’s potential impacts to bighorn sheep movement, groundwater and scenic vistas. The alternate proposal includes a smaller project footprint that reduces potential interference with future efforts to re-establish bighorn sheep movement across Interstate 15 as well as other changes to address concerns. But instead of celebrating success, the Sierra Club, the National Resources Defense Council, and other environmental activists groups have lauded the city’s decision. Continue reading Soda Mountain Solar Project in Jeopardy→
The Royal Dutch Shell drilling rig Polar Pioneer that has been the focus of environmentalists while it was docked in Seattle left port on Monday for Alaska as the first step of a summer 2015 drilling campaign in the Arctic. Dozens of activists in kayaks dubbed “kayaktivists” tried to stop it, but the Coast Guard enforced the marine safety zone around the vessel and prevented any disruption. Around two dozen people were temporarily detained and fined $500 each for violations. Although final permits are still pending, Shell cleared major hurdles when a federal appeals court struck down a challenge to its oil spill response plans and after President Barack Obama upheld the 2008 Arctic lease sale. The U.S. Geological Survey estimates Arctic offshore reserves at 26 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas. Shell says developing these reserves could increase domestic oil supplies by more than 1 million barrels a day.
Chevron Corporation has announced that the Big Foot tension-leg platform (TLP) will be moved to sheltered waters from its location in the deepwater U.S. Gulf of Mexico following damage to its tendons during attempted installation of the platform late in May. Tendons are the long, ultra-strong steel pipes that connect the platform to the seabed and are typically buoyant. The tendons were pre-installed to the seafloor with the top end floating below the water surface in preparation for connection to the TLP. It appears that nine of the 16 tendons lost buoyancy and fell to the seafloor. No injuries or environmental damage have been reported with the incident, and the TLP itself was not affected.
The problem is quite serious and Chevron will need to rebuild at least some of the tendons. This will result in a significant delay in start-up of the platform and will likely increase project cost beyond its current $5.1 billion estimate. Big Foot will ultimately be installed in approximately 5,200 ft of water, which is the deepwater depth for a TLP. It will also be the largest TLP in the Gulf of Mexico.
On Tuesday an onshore pipeline ruptured along the scenic coast north of Santa Barbara, California, spilling an initial estimate of 21,000 gallons of oil into the ocean and onto beaches before the flow could be controlled. Later reports increased this estimate to 105,000 gallons. What caused the spill is still under investigation, and clean-up activities are ongoing. The incident brought back memories of the 1969 Santa Barbara Channel oil spill that effectively shut down oil development offshore California for almost 10 years.
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