Department of Interior approves ANWR O&G leasing plan

[SAJ-99]

https://apnews.com/57de322833f2843ac53d17e043be35a0

So despite oil prices at $42 and OG exploration companies saying they are even pulling back on looking for new deposits this lease-sale is going forward. Not a fan of drilling for oil on ANWR in general, but as an American citizen I feel like selling the lease in this environment is a bad idea.

 

[RoughCountry]

I say let them drill. ANWR is a huge place. Liberal Environmentalist will cry the world is going to come to an end just like they did with the pipeline. The drilling industry is under enormous regulations and scrutiny they can’t just drill and leave. Or, pay our enemies for their oil at their price some time down the line. Keep America strong...Drill !

 

[Deleted member 28227]

I say let them drill. ANWR is a huge place. Liberal Environmentalist will cry the world is going to come to an end just like they did with the pipeline. The drilling industry is under enormous regulations and scrutiny they can’t just drill and leave. Or, pay our enemies for their oil at their price some time down the line. Keep America strong...Drill !

Disagree...

1. The industry is not under enormous scrutiny.
2. Oil prices are ridiculously low to the point that many companies have shut in wells and or laid down rigs. In 2017, Oklahoma had 120 rigs running in the Anadarko, now there are 10. Permian has lost ~300.
O&G Bankruptcies

Your premise is just completely wrong, we have plenty of capacity to produce oil in the lower 48. Production levels are where they are because you can't economically drill and get O&G to market below current levels.

The US will always import some oil due to production mixes, ie we produce a lot of light sweet crude and need more heavy oil for current refinery configurations. (Alaskan oil is in the middle API gravity 32)

No new capacity is needed, in fact right now we need to reduce production as an industry.

Call me a green liberal environmentalist all you want.


I think you should let my company continue to drill here, we have decades of great inventory that we can produce profitably.




and let this area alone




I fully recognize that Alaskan's need jobs as well, but I don't think that's a good enough reason to prop up a floundering extractive industry.

North Slope oil should not be given an unfair advantage over Texas, Oklahoma, Colorado, ND, ect that causes jobs in those states to be lost.

 

[Irrelevant]

I say let them drill. ANWR is a huge place. Liberal Environmentalist will cry the world is going to come to an end just like they did with the pipeline. The drilling industry is under enormous regulations and scrutiny they can’t just drill and leave. Or, pay our enemies for their oil at their price some time down the line. Keep America strong...Drill !

It's estimated to cost between 12-24 billion to clean up the estimated 500k abandoned oil/gas wells we already have. Another great example of privatizing the profits and socializing the costs.

"The research by a team of energy experts concluded a federal economic stimulus program focused on plugging 500,000 abandoned and orphaned wells across the country could generate upward of 120,000 jobs for unemployed oil and gas workers... For one, the program could range from roughly $12 billion to $24 billion, due to the incredible variability in restoration costs from well to well."

Oil well cleanup program may spur jobs

CASPER — The COVID-19 pandemic and corresponding collapse in energy markets have wreaked havoc in the oil and gas sector. An estimated 76,000 direct oil and gas jobs were slashed

www.gillettenewsrecord.com

"Earlier this year, GAO reported that 84% of bonds for federal oil and gas development were likely insufficient to cover cleanup costs."

OIL AND GAS: Thousands of 'orphan wells' spark safety, cleanup fears

Across the West, thousands of oil and gas wells sit idle on federal lands. They pose environmental and safety hazards, but critics say the Bureau of Land Management doesn't have a good way of tracking them, and there's not nearly enough money set aside to plug them.

www.eenews.net

“It’s starting to become out of control, and we want to rein this in,” Bruce Hicks, Assistant Director of the North Dakota Oil and Gas Division, said last year about companies abandoning oil and gas wells. The state recently decided to use $66 million in federal funds designated for coronavirus relief to begin cleaning up wells the oil industry has abandoned — costs that the industry should be covering, according to the law, but that are now shifted to the public. "

The Bakken Boom Goes Bust With No Money to Clean up the Mess

More than a decade ago, fracking took off in the Bakken shale of North Dakota and Montana, but the oil rush that followed has resulted in major environmental damage, risky oil transportation without regulation, pipeline permitting issues, and failure to produce profits. Now, after all of that...

www.desmogblog.com

What reality are you living in?

 

[Deleted member 28227]

Alaska breakeven prices $10 to $20/b above shale

"Crude oil output in Alaska has fallen from about 2.01 million b/d in 1988, when it was tied with Texas as the top US oil producing state, to a projected 475,000 b/d this year, according to the US Energy Information Administration. Alaska is currently in sixth place in oil production, behind: Texas, North Dakota, New Mexico, Oklahoma, and Colorado, according to the EIA.

This is largely due to Alaska's remoteness and severe weather conditions causing high breakeven prices, currently at about $55/b Brent equivalent for onshore and $65/b Brent equivalent for offshore, according to S&P Global Platts Analytics. US shale, by comparison, has breakeven prices of about $45/b Brent equivalent, according to Platts Analytics."

 

[1100RemingtonMan]

I was on the North Slope last year Caribou hunting. Let them drill responsibly is my vote.

 

[Hunting Wife]

If they can’t drill profitably nor clean up after themselves down here with all the infrastructure already available, what in the world makes people think they can do either of those up there? Its nonsensical.

 

[RoughCountry]

Sounds like Ol Joe Biden himself on hunt talk......Drill baby Drill !!!! keep the money in America and not in the hands in our enemies some day down the road. When they drill there it will be just like the Alaska pipeline...nothing but money for all and it never hurt a thing. That place is so big it won’t hurt the animals or the tundra or the mountains. Let’s drill it and then build another pipeline. That will keep America as the top oil producing country for many years to come.

 

[Irrelevant]

Sounds like Ol Joe Biden himself on hunt talk......Drill baby Drill !!!! keep the money in America and not in the hands in our enemies some day down the road. When they drill there it will be just like the Alaska pipeline...nothing but money for all and it never hurt a thing. That place is so big it won’t hurt the animals or the tundra or the mountains. Let’s drill it and then build another pipeline. That will keep America as the top oil producing country for many years to come.

So facts are irrelevant? You literally have a O&G employee telling you it doesn't make economic sense, trust me, he's just getting started, he's got more facts/stats/graphs. You were provided three different sources explicitly pointing out how we, the US Tax Payer, are actually hurting from it. O&G executives make millions and we pick up the reclamation costs. And all you can counter with is "Drill baby Drill"?

 

[RoughCountry]

Ok, you win. I won’t listen to the Dept of Interior I will listen to a oil Co bean counter on a hunting forum. Good luck to you and AOC in November Joe.

 

[Deleted member 28227]

So facts are irrelevant? You literally have a O&G employee telling you it doesn't make economic sense, trust me, he's just getting started, he's got more facts/stats/graphs. You provided three different sources explicitly pointing out how we, the US Tax Payer, are actually hurting from it. O&G executives make millions and we pick up the reclamation costs. And all you can counter with is "Drill baby Drill"?

"BP today announced that it has agreed to sell its entire business in Alaska to Hilcorp" -Aug 2019

This move, which occurred before Covid when Brent was ~$60 and WTI was at ~$55. BP saw the writing on the wall.

Shale is way more profitable than Alaska and why risk another gulf spill (again pre-covid, this has only become more true). 10 years out and BP is paying 1.4 Billion a year on cleanup.



Something to think about is the fact that a company like BP has the capital and scale to absorb that kind of hit (gulf spill) and continue to maintain a viable company.

Hillcorp purchased the BP assets and was barely able to secure financing when covid struck and their borrowing base evaporated.

Companies like Hillcorp are how abandoned wells happen. Wildcatter/shoe strip company trying to make it on the margins takes a big risk buys an asset like this, then fails due to the market, drilling issues, environmental issues etc. Hillcorp goes under and I guess you hope BP had enough bonds in place to clean up the asset.

Drill baby drill
We did that...
Now there is too much production, US companies took on too much debt to get there and the market has said we need to practice restraint.



Exxon was running 60 rigs in the permian by EOY will be 10-15
Chevron 20 now 4
Saudi Aramco, the largest producer in the world just cut capex by 50%.

Put any environmental arguments aside, give me any reason why it makes economic sense to open new areas of the North Slope to leasing at $42 oil.

 

[noharleyyet]

@wllm1313

...'splain it in beans. Carry on, Imma hang up and listen.

 

[JLS]

Sounds like Ol Joe Biden himself on hunt talk......Drill baby Drill !!!! keep the money in America and not in the hands in our enemies some day down the road. When they drill there it will be just like the Alaska pipeline...nothing but money for all and it never hurt a thing. That place is so big it won’t hurt the animals or the tundra or the mountains. Let’s drill it and then build another pipeline. That will keep America as the top oil producing country for many years to come.

There is some higher level discourse right there. Carry on.....

 

[Irrelevant]

@JLS It's interesting, and not all surprising, that people bash the info shared on this hunting forum that is completely unrelated to hunting. I would be suspect myself if I didn't know better. But damn if I haven't found this place to be full of reasonable people with more knowledge about more things than I would have ever expected. The collective HT community is a helluva lot better source than most places I go to. Not any one person, but the collective knowledge that's consistently shared. Maybe I give it too much credit, but my census is that the general population is getting dumber and dumber and even worse, more tribal.

 

[Gerald Martin]

@wllm1313 is a green decoy planted by Bill Gates to bankrupt the OG industry so we have to depend on the UN for our forced Covid vaccinations. Fact.

Will Coggins sent it to me via a personal Messenger text but theFacebook censors won’t let me share it.

I say let them caribous find a tundra without oil under it. It’s a big place up there and I watched a Drury Bro video last night.

 

[BWALKER77]

So facts are irrelevant? You literally have a O&G employee telling you it doesn't make economic sense, trust me, he's just getting started, he's got more facts/stats/graphs. You were provided three different sources explicitly pointing out how we, the US Tax Payer, are actually hurting from it. O&G executives make millions and we pick up the reclamation costs. And all you can counter with is "Drill baby Drill"?

Not economical right now, but at some time it will be.

 

[BWALKER77]

"BP today announced that it has agreed to sell its entire business in Alaska to Hilcorp" -Aug 2019

This move, which occurred before Covid when Brent was ~$60 and WTI was at ~$55. BP saw the writing on the wall.

Shale is way more profitable than Alaska and why risk another gulf spill (again pre-covid, this has only become more true). 10 years out and BP is paying 1.4 Billion a year on cleanup.
View attachment 150726


Something to think about is the fact that a company like BP has the capital and scale to absorb that kind of hit (gulf spill) and continue to maintain a viable company.

Hillcorp purchased the BP assets and was barely able to secure financing when covid struck and their borrowing base evaporated.

Companies like Hillcorp are how abandoned wells happen. Wildcatter/shoe strip company trying to make it on the margins takes a big risk buys an asset like this, then fails due to the market, drilling issues, environmental issues etc. Hillcorp goes under and I guess you hope BP had enough bonds in place to clean up the asset.

Drill baby drill
We did that...
Now there is too much production, US companies took on too much debt to get their and the market has said we need to practice restraint.
View attachment 150727


Exxon was running 60 rigs in the permian by EOY will be 10-15
Chevron 20 now 4
Saudi Aramco, the largest producer in the world just cut capex by 50%.

Put any environmental arguments aside, give me any reason why it makes economic sense to open new areas of the North Slope to leasing at $42 oil.

Because prices change and sometimes rather quickly. If it's not profitable the oil companies won't bother with it.

 

[Deleted member 28227]

Because prices change and sometimes rather quickly. If it's not profitable the oil companies won't bother with it.

That’s a fair point... I think unlikely but it’s possible WTI could go to $80.

To your second point... I mean you’d hope right

Chaparral Energy Files for Bankruptcy, Again

Chaparral will hand control to bondholders in a $300 million debt-for-equity swap in its second trip through bankruptcy in less than four years.

www.google.com

I think you are correct though, in the current environment it’s unlikely anyone will drill these leases near term.

 

[SAJ-99]

Because prices change and sometimes rather quickly. If it's not profitable the oil companies won't bother with it.

But the lease is being sold at a time when OG can’t pay for the stuff they already have. My original question, Why? It seems like politics. Sell lease to OG on the cheap and they become much harder for the next admin to kill or alter. Especially so when you write language in the lease that prohibits changes even with a change in executive branch.
we have a Strategic Oil Reserve where the government buys oil and puts it back in the ground for emergencies. Why not just think of this as an extension of the SOR? Oh I know! Because extracting it from the ground benefits OG execs. Some day RoughCountry will realized he paid for it with his payroll taxes like every working stiff has since the invention of the payroll tax. “Drill baby drill, I’ll Pay for it.”

 

[Deleted member 28227]

But the lease is being sold at a time when OG can’t pay for the stuff they already have. My original question, Why? It seems like politics. Sell lease to OG on the cheap and they become much harder for the next admin to kill or alter. Especially so when you write language in the lease that prohibits changes even with a change in executive branch.
we have a Strategic Oil Reserve where the government buys oil and puts it back in the ground for emergencies. Why not just think of this as an extension of the SOR? Oh I know! Because extracting it from the ground benefits OG execs. Some day RoughCountry will realized he paid for it with his payroll taxes like every working stiff has since the invention of the payroll tax. “Drill baby drill, I’ll Pay for it.”

Or Alaska’s economy is mostly based on extractive industry, and those industries have been in dramatic decline in AK.
Lost jobs, declining tax revenue for public services, etc.

Im not surprised they are grasping at straws between this and pebble mine.

I also don’t have a good solution.