Years later, after overcoming barriers of lawsuits, regulatory authorities & other environmental issues, Shell has finally got the go for setting up first of its exploratory wells in Alaska’s outer-continental shelf , which also makes it the first new offshore drilling project approved by the Government since the 2010. This project will greatly add on to the oil reserves of U.S.A which currently stands at 22 billion barrels, further helping in maintaining the proportion of present oil reserves to the rising demand of oil throughout the world.
Permissions for offshore drilling in water on hold due to the Macondo blowout or BP disaster in the Gulf of Mexico which continued for 3 months continuously and was regarded the largest accidental marine oil spill. America’s largest offshore oil discovery in a generation has been commenced successfully after a lot of financial expenditures which already include $2.2 billion for drilling rights back in 2005 and 2008. It is believed that the task to go through the economic, geographical & political aspects for control of the Arctic oil control was not easy as this entire process would require high-tech technology like nuclear-powered icebreakers. The only worry behind this project is that this activity could endanger the whale hunting, which is an Eskimo’s centralized aspect with regards to their culture, therefore it important to ensure safety of Marine & Wildlife habitats too. The environmentalists were strong on their view to avoid offshore drilling in Alaska considering dangerous incidents like the Deepwater Horizon which could occur in the near future. Though, oil companies have not been affected much by this incident and have positively gone ahead to research more into oil reserves in various parts of the world, specially the Arctic region.
This project could be a major deciding factor in the Company’s revenue & Nation’s economy, moreover since U.S.A is an oil-addict nation. Experts do believe that this project could change the supply exchange between all the oil drive economies of the world. The present consumption of oil stands at 89million barrels a day which meets the demand on a very tight scenario basis. Eskimo, a subcontractor who wants to be a part of the functioning of Shell’s project is keen to make sure that no accidents occur in the ocean ecosystem which is one of the least polluted ecosystems in the world.
The short demand of oil has been noticed with direct effects to the price of gasoline which is currently $3.75, from a low of $1.87 in 2008. Apart from the rise, this has also risen as a major political issue, where Obama’s supporters have appealed to him as they want to open up more public land to drilling as they were not pleased with the production growth occurring on privately owned lands. Oil production is at a 8 year high & this effort by Shell is believed to reduce prices, though the question lies if they can make this project in Alaska a successful one. Further, the ability to take safety precautions taken by oil companies in domestic drilling is of big concern, especially after the death of 11 crewmen and spilling of 5 million barrels in the Gulf. The quench of oil in the Arctic will be explored over the years as it is believed that 22% of the world’s oil reserves which are undiscovered lie here.
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