
Shell stops Arctic activity after 'disappointing' tests - ComputerGuru
http://www.bbc.co.uk/news/business-34377434
======
thephyber
I think it's a combination of net cost, net energy, speed of development,
infrastructure required to transport it efficiently to refineries, and the
prohibitive cost of drilling safely. PR is a concern, but not much more than
PR in any other spill. The largest problem is spill damages will cost an order
of magnitude more to prevent/stop/clean because the arctic is so remote and
all effort there is less efficient.

PR is not the only cost of the Deepwater Horizon. BP also paid a significant
fraction of their market cap to clean up the wide-reaching effects of the
spill.

There are behavioral costs. Everyone knows _which_ major oil company was to
blame for letting a drunk ship captain navigate the Valdez oil tanker. I was
in grade school at the time and I still remember the images of birds, fish,
and other wildlife caked in oil slowly dying and the name of the oil company
was forever etched into my mind next to those images.

The Arctic is some of the most inhospitable weather in the world. Everything
costs more to develop, transport, and maintain there. The seasonal weather
prevents ships from making the trip there without an ice breaker escort (or
more than one if the ice breaker is stranded on ice). The energy required to
perform much of the work (keeping machines above freezing temperatures,
keeping oil/gas warm to transport in pipelines) isn't insignificant. Oil
platforms may need to be re-engineered to withstand the weather and floating
ice sheets.

The costs associated with drilling are high until the drillers find the
largest pockets.

It's also worth noting that Royal Dutch Shell is among the only major oil
companies that actively and openly admits that climate change is an issue,
that people are at least partly to blame, and that the oil/energy companies
have a responsibility to both factor in the risk factors as well as work on
mitigating the contributions of oil/gas to climate change.[1]

[1] [http://www.shell.com/global/environment-
society/environment/...](http://www.shell.com/global/environment-
society/environment/climate-change.html)

~~~
afarrell
Chevron (US) seems to agree that Climate change is man-made, though they
aren't nearly so direct about it and certainly don't express support for a
carbon tax.
[http://www.chevron.com/globalissues/climatechange/](http://www.chevron.com/globalissues/climatechange/)

Exxon (US) seems to take it as a given that human-emitted greenhouse gasses
cause climate change and emphasizes the need to avoid needless cost in
solutions. They explicitly support a carbon tax, offset by lowering other
taxes: [http://corporate.exxonmobil.com/en/current-issues/climate-
po...](http://corporate.exxonmobil.com/en/current-issues/climate-
policy/climate-policy-principles/overview)

BP states that human GHG emissions cause climate change and supports putting a
price on carbon, but one that is equal across sources.
[http://www.bp.com/en/global/corporate/sustainability/the-
ene...](http://www.bp.com/en/global/corporate/sustainability/the-energy-
future/climate-change.html)

Total (France) touts some of initiatives for addressing carbon emissions but
[http://www.total.com/en/society-
environment/environment/comb...](http://www.total.com/en/society-
environment/environment/combating-climate-change) They also talk here about
the role of methane flaring in greenhouse gas emissions
[http://www.total.com/en/media/news/press-releases/total-
comm...](http://www.total.com/en/media/news/press-releases/total-commits-
three-major-international-initiatives-combat-climate-change) I don't read
French, so cant summarize their main page.

ConocoPhillips also recognizes human-emitted GHCs as the cause of climate
change. [http://www.conocophillips.com/sustainable-development/our-
ap...](http://www.conocophillips.com/sustainable-development/our-
approach/living-by-our-principles/positions/Pages/climate-change.aspx)

I've got to run, can someone else do Statoil, Rosneft, Petrobras, etc?

~~~
sea2summit
It should be noted, from the dates of these policy papers, that they are only
a year old.

------
Animats
There are many cheaper sources of oil right now. Drillers will be back in
future decades, but right now, it's not worth it.

Saudi thinking on the future of oil is interesting. They're worried about
solar, wind, natural gas, electric cars, and US oil reducing demand for their
product. And at some point, they'll run out. When a middle-east oil autocracy
runs out of oil, Government leaders are usually killed. Egypt and Syria peaked
in the mid-1990s, and look what happened. Saudi Arabia claims to be a long way
from that point, but it's hard to tell.

------
guelo
> Mrs Clinton's tweet revealed that political risks were still substantial

I love that major policy signaling is accomplished via tweets nowadays.

Also interesting how several Republican candidates responded directly to the
tweet,

[https://twitter.com/hillaryclinton/status/633629814713397249](https://twitter.com/hillaryclinton/status/633629814713397249)

Though Twitter's reply threading is the worst implementation I've ever seen it
does do a good job surfacing Jeb and Christie's responses.

~~~
thrownaway2424
Twitter is the perfect fit for the Republican intellect. What does Jeb's reply
even mean? "More anti-energy than Obama" is totally meaningless, unless his
point is that a +50% increase in crude oil production was achieved in spite of
Obama's anti-energy policies, whatever they are.

------
ComputerGuru
I submitted this because I'm very curious what HN thinks. Clearly USGS thinks
there's a heck of a lot of oil in the Arctic. I'm personally glad we're not
drilling for oil because that's not an environment we can screw up and fix and
there's no need to do so except for profit - but why would Shell's tests come
back "disappointing" or is that really then owning up to not being able to
drill without mishaps (and damage to their PR) in the region?

~~~
jchrisa
The key thing to remember is that if we burn all the oil we've already found,
we'll exceed safe levels of atmospheric carbon. So there is no point exploring
for more oil or opening new reserves.

~~~
simoncion
> ...if we burn all the oil we've already found...

Plastics and inorganic fertilizers are two of the things we can make with oil.
Both of these things are pretty damn important.

I suspect that -one day- burning so much of our oil supply just to produce
electricity and locomotion will be regarded as a rather poor decision.

~~~
hugh4
Oil is just big long gooey hydrocarbons that we can make by other means, if we
have energy. I'm not too worried about it.

If you're desperate you can always squeeze a peanut or scrape a duck.

~~~
simoncion
> If you're desperate you can always squeeze a peanut or scrape a duck.

That sounds _terribly_ expensive. A 1,000% increase in the cost of plastics
and lubricants won't be fun for anyone.

> ...we can make by other means, if we have energy.

Hopefully we gather together the political will and launch the anti-
misinformation campaigns required to get _some_ form of very-high-capacity
non-fossil-fuel-based electricity generation system long before we need to
seriously consider "scraping ducks" to get the hydrocarbons we require.

------
Timone
The really big news is shell think the entire basin is low yield which means
others are unlikely to want to go there in future.

------
mcv
They stopped because of disappointing tests? Greenpeace told me it was because
of me. (Not sure what I did, though.)

~~~
crpatino
You must be a heck of a disappointment!

------
205guy
I don't believe Shell. I believe this is a PR tactic to throw off their
opponents. I've seen other companies do so. They'll find some way to keep
exploring and doing whatever they can get away with.

~~~
saryant
Not really. Hiding activity in the Arctic isn't exactly easy and if Exxon
wants to know what they're up to, they can just check Shell's filings with the
EPA and State of Alaska.

------
stephengillie
The "disappointing" part is likely the recent drop in oil prices. Higher
revenues from a commodity like that can finance all kinds of risk.

