The dust has barely settled on Shell’s pullout from the Arctic offshore drilling project, and another petroleum company is trying to make inroads in the region. Royal Dutch Shell (NYSE:RDSA) had met with widespread opposition when they attempted to set up wells as part of an exploratory project, close to Alaska in the Chukchi Sea.
Hilcorp Energy Subsidiary Makes a Bid
Now, Texas energy company Hilcorp Energy’s subsidiary in the region, Hilcorp Alaska LLC is vying for a share of the highly controversial offshore oil. In their proposal name the ‘Liberty Project’, the Houston headquartered company says that they wish to construct a platform where at least five extraction wells can be set up to draw oil from the offshore regions of the Beaufort Sea. This platform, designed as a gravel island will be located about 6 miles offshore. The proposal is currently under review by The U.S. Bureau of Ocean Energy Management which needs to weigh off commercial benefits with environmental impact.
Environmental downside draws opposition
Legal representatives of the Center for Biological Development went on record to say that the region is already under pressure, with climate change putting habitats of ice seals, polar bears, and walruses at risk. The creation of an offshore oil well will bring with it the added risk of oil spills that could be devastating. Locals are also concerned about how the presence of such islands will impact the migration of the bowhead whales that are needed for subsistence by hunters in the area. A formal environmental review is underway but will take until 2017 to be completed.
Shell had drawn the ire of Greenpeace, whose activists took on the multinational oil corporation in its various locations, protesting at various locations in America and even on a drill rig in the Pacific Ocean. After a first exploratory well was dug, Shell made an announcement of their withdrawal from the Arctic project attributing it to regulatory uncertainty and less than stellar results from the exploration. Whether a similar fate awaits Hilcorp remains to be seen. But for now, the project is moving quietly but surely ahead.
Moving forward...slowly but surely
With Alaska Gov. Bill Walker and drilling advocates on their side, their determination seems steely. If things go to plan, Hilcorp estimates say that the site could see production soaring to 70,000 barrels of crude every day as early as two years from when production actually begins. The location has the potential to produce as much as 150 million barrels in a span of about 15 or 20 years.