A Japanese ship that wrecked off the coast of Mauritius in July and sparked one of the worst environmental disasters in the country's history may have run aground because of birthday celebrations on board at the time.
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EcoWatch Daily Newsletter
By Ashutosh Pandey
In 1973, a handful of oil-rich countries, led by Saudi Arabia, Iran and Iraq, brought the mighty U.S. economy to its knees by slapping an oil embargo on Washington and its allies. The suspension of oil shipments from the Middle East to the U.S. and steep production cuts in retaliation for the Americans' support of Israel during the Yom Kippur War wreaked havoc on the U.S. economy, leading to fuel shortages and causing oil prices to go through the roof.
Peak Oil Debate Heats Up Amid COVID-19 Crisis<p>The bloc's waning influence has coincided with oil's fall from grace. The fossil fuel has seen its share in the global energy mix diminish to about 33% from a peak of 50% in 1973, according to estimates by BP, as governments and companies shift to cleaner energy sources to combat climate change. By contrast, renewables, mostly from solar and wind, have seen their share rise, accounting for over 40% of global energy growth last year, according to BP's data.</p><p>"Oil isn't as significant or visible as it used to be. For example, do you know who the head of Exxon is? Probably not. Do you know who the head of Tesla is? Yes, Elon Musk," said Philippe Benoit, from consultancy Global Infrastructure Advisory Services 2050. </p><p>The COVID-19 pandemic has further dimmed oil's prospects. Global lockdowns brought cars, planes and trains to a screeching halt, causing oil consumption to drop by a quarter and <a href="https://www.dw.com/en/oil-prices-collapse-with-biggest-drop-since-1991-gulf-war/a-52687503" target="_blank">oil prices to crash to multiyear lows,</a> even trading below $0 a barrel in the US at one point. Transportation accounts for close to a third of the global oil demand. </p><p>Experts don't see the automobile and aviation sectors returning to their pre-pandemic levels for the next 3-5 years at least. The airline industry was touted to be the biggest growth engine for oil, riding on demand from people getting richer, but that now looks unlikely, especially over the next few years. </p><p>Oil industry leaders, including BP's chief executive, Bernard Looney, and Royal Dutch Shell's boss Ben van Beurden, have said the current crisis may cause the <a href="https://www.dw.com/en/when-will-peak-oil-hit-global-energy-markets/a-51367939" target="_blank">oil demand to peak sooner than expected.</a></p><p>"The backdrop of declining demand means that the Kingdom [of Saudi Arabia] and its Gulf allies would find it increasingly difficult to manipulate supply and boost prices for any length of time," Jason Tuvey, of Capital Economics, wrote in a note to clients. "If prices are kept artificially high for an extended period, oil demand will end up declining at an even faster pace and the nimbleness of U.S. shale production means that non-OPEC supply will expand." </p>
'OPEC Is a Saudi Mouthpiece'<p>OPEC was founded in Baghdad in September 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The bloc, which has expanded and contracted over the years, has been plagued by squabbles over strategy and regional power struggles, which have occasionally turned into full-blown conflicts like the Iran-Iraq war and Iraq's invasion of Kuwait in 1990. </p><p>Saudi Arabia, which produces a third of OPEC's oil, has remained the de facto leader of the bloc since the 1990s, when conflicts, corruption and poor management wrecked production in other member countries, including regional rivals Iran and Iraq. </p><p>Riyadh has oscillated between propping up crude oil prices and shielding its market share, often unilaterally. "OPEC is a Saudi mouthpiece," Colgan said. In March, when OPEC+ negotiations to cut output in response to the pandemic collapsed, Saudi Arabia launched a price war against Russia — much to the dismay of <a href="https://www.dw.com/en/oil-price-war-saudi-arabia-russia-us-nigeria-angola/a-52718595" target="_blank" rel="noopener noreferrer">weaker OPEC members such as Nigeria and Angola,</a> already bleeding due to low oil prices caused by Riyadh's 2015-16 misadventure. </p><p>Despite all its sway, Saudi Arabia has struggled to rein in the <a href="https://www.dw.com/en/will-coronavirus-oil-shock-rein-in-opec-cheaters/a-53277101" target="_blank">bloc's so-called cheaters, including Nigeria and Iraq,</a> which have been notorious for failing to comply with pledged output cuts aimed at propping up oil prices. Riyadh, which is more vulnerable to low oil prices than other major oil producers with its break-even oil price exceeding $80 a barrel, has ended up doing much of the heavy lifting to ensure overall compliance.</p><p>Tuvey of Capital Economics says in the medium-term Saudi Arabia will scale back its efforts to prop up oil prices and revert to the strategy of shielding its market share at any cost to avoid leaving substantial quantities of oil stranded amid falling demand. </p><p><span></span>"Such a shift in policy, particularly if it were sudden and unexpected, would put some downward pressure on oil prices. But this is unlikely to be too troubling for the kingdom, and the government has proven its willingness to impose harsh fiscal austerity," Tuvey said. "Saudi policymakers won't have much sympathy for other producers that fail to adjust their economies to low oil prices."</p>
Bigger Role for OPEC?<p>Yet it may be too early to write an obituary for the bloc, <a href="https://www.dw.com/en/saudi-arabia-considering-breaking-up-opec-report/a-46226353" target="_blank">which has survived many crises in the past 60 years,</a> eliciting comparisons to the proverbial cat with nine lives. Oil is likely to remain the world's most important commodity for years to come.</p><p>"Paradoxically, OPEC as an aggregator, a point of meeting for many producing nations, could potentially play a bigger role in managing the tensions of a contracting market among those oil producers," Benoit said. </p>
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By Jo Harper
Only 10% of global energy utility companies are expanding their renewable energy capacity at a faster rate than their gas or coal-fired capacity. That is the main finding of a study by Galina Alova from the Smith School of Enterprise and the Environment at the University of Oxford.
The Matter of Gas<p>The report found that 10% of utilities favored growth in gas-fired power plants, dominated by the US utilities exploiting the country's shale gas reserves, followed by Russia and Germany.</p><p>"Renewables and natural gas often go hand in hand," Alova said, adding that companies often choose both in parallel. "So, it might be just in media reports we are getting this image of investing in renewables, but less coverage on continued investment in gas." </p><p>It might also be the case that gas is viewed as a transition fuel, relatively less carbon emitting and providing load-balancing services to intermittent renewables generation, Alova said.</p><p>Dave Jones, senior electricity analyst for independent climate think tank Ember, agrees with Alova that utilities have hindered the transition by "misunderstanding the future of gas." Utilities have a mindset to build big centralized power plants, replacing a coal power plant with a gas power plant, he said. "Fortunately, most of the gas hype across the world is now dying down, as wind and <a href="https://www.dw.com/en/cheap-solar-energy-prices-explained/a-53590607" target="_blank">solar now provide cheaper options</a> for generating electricity," Jones said.</p>
Green Movement Taking Place<p>Over a fifth of Europe's energy was generated by solar panels and wind turbines in the first half of 2020, according to a report by Ember. Denmark came out on top, generating 64% of its energy from these renewable sources, followed by Ireland (49%) and <a href="https://www.dw.com/en/renewables-make-up-over-half-of-germanys-power-mix/a-52986924" target="_blank">Germany</a> (42%).</p><p>In Ember's half-year review released in July, renewables exceeded fossil fuel generation for the first time ever, producing 40% of the EU's power, with fossil fuels contributing 34%. However, globally only a tenth of all energy was generated by these sources during the first half of 2020. </p><p>Last year saw the use of coal to generate electricity around the world fall by a record 3%. In part due to COVID-19, coal generation in the first half of 2020 again broke records with a drop of 8.3%. In the EU, the drop was higher, as coal energy generation fell by nearly a third.</p>
Slowly Getting There?<p>Utilities have been slow to understand how quickly wind and solar would drop in price, and also how quickly governments would want to move away from coal. "Many utilities have been caught off guard by the speed of the transition, and have suffered financially ever since," said Jones.</p><p>The world this year has generated one-tenth of its electricity from wind and solar, double from the 5% in 2015, and that increase has led to a fall in market share of coal generation, Jones added. </p><p>Valentina Kretzschmar from consultancy Wood Mackenzie says BP's recently announced strategy has created a new industry benchmark. BP plans to increase investment in its low-emission businesses, including renewable energy, by tenfold in the next decade to $5 billion (€4.5 billion) a year, while cutting back oil and gas production by 40%.</p><p>In July, Royal Dutch Shell won a deal to build a wind farm off the coast of the Netherlands, while France's Total has agreed to make several large investments in solar power in Spain and a wind farm off Scotland. Total also bought an electric and natural gas utility in Spain. Shell has said it will <a href="https://www.dw.com/en/mexico-sells-rights-to-19-offshore-oil-fields-for-over-500-million/a-42393559" target="_blank">delay offshore oil fields in the Gulf of Mexico</a> and in the North Sea.</p><p>US giants like Exxon Mobil and Chevron, however, have been slower than their European counterparts to commit to climate goals.</p><p>"I have seen a substantial shift between companies in the fossil fuel clusters toward renewables," Alova said. "This signals that the companies that have been growing fossil fuel portfolios in the earlier time periods might be switching to renewables more recently."</p>
By Kenny Stancil
The city of Hoboken on Wednesday filed a lawsuit against multiple Big Oil players—including ExxonMobil, incorporated in New Jersey—joining an increasing number of state and local governments using litigation in efforts to hold the fossil fuel industry accountable for defrauding the public about foreseen climate crisis damages and to make companies "pay their fair share" of the costs of mitigating greenhouse gas emissions and adapting to a warming planet.
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By Seerat Chabba
Mauritius has asked Japan to pay close to 3.6 billion yen (€28.5 billion, $34 million) in order to support local fishermen whose livelihoods were adversely impacted by an oil leak last month, according to a Mauritian government document accessed by Japanese news agency Kyodo News.
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President Donald Trump’s Climate Change Record Has Been a Boon for Oil Companies, and a Threat to the Planet
By Vernon Loeb, Marianne Lavelle and Stacy Feldman
In the middle of his 44th month in office, two weeks before the start of the Republican convention in late August, President Trump rolled back Barack Obama's last major environmental regulation, restricting methane leaks.
Trump's Long Focus on 'American Energy Dominance'<p>When Trump delivered his <a href="https://insideclimatenews.org/news/27052016/donald-trump-republican-party-election-fossil-fuels-coal-oil-gas-fracking-climate-change-paris" target="_blank">first major energy speech in the fracking fields of North Dakota</a> as a candidate in May 2016, he called for American domination of global energy supplies.</p><p>"We are going to turn everything around," Trump declared. "And quickly, very quickly."</p><p>Once in office, Trump pursued a policy of unfettered support for fossil fuel development. He immediately signed memorandums to <a href="https://insideclimatenews.org/news/24012017/keystone-xl-dakota-pipeline-donald-trump-executive-order" target="_blank">revive the Keystone XL and Dakota Access pipelines</a>, projects blocked by Obama. </p><p>In early March 2017, his administration ordered the Environmental Protection Agency to <a href="https://insideclimatenews.org/news/03032017/scott-pruitt-environmental-protection-agency-methane-greenhouse-gas-climate-change" target="_blank" rel="noopener noreferrer">stop gathering data from oil and gas companies</a> needed to rein in leaks of methane, a potent short-lived climate pollutant. Fossil fuel infrastructure adds to greenhouse gas emissions, in part by leaking methane into the atmosphere. </p><p>He followed up, at the end of March, by issuing <a href="https://insideclimatenews.org/news/28032017/trump-executive-order-climate-change-paris-climate-agreement-clean-power-plan-pruitt" target="_blank" rel="noopener noreferrer">a sweeping executive order</a> directing all federal agencies to target for elimination any rules that restrict U.S. production of energy. He set guidance to make it more difficult to put future regulations on fossil fuel industries and he moved to discard the use of a rigorous "social cost of carbon," a regulatory measurement that puts a price on the future damage society will pay for every ton of carbon dioxide emitted. </p><p>As his first year in office came to a close, Trump and Alaska's Republican senators inserted a provision into his signature tax cut legislation that called for opening the coastal plain of the Arctic National Wildlife Refuge for drilling.</p><p>In 2018, domestic oil production hit a record high. The result of this, among other things, was the <a href="https://rhg.com/research/preliminary-us-emissions-estimates-for-2018/" target="_blank" rel="noopener noreferrer">reversal of three consecutive years of declining U.S. carbon emissions</a>.</p><p>Many of Trump's regulations have also been tailored to favor the coal industry, often at the expense of cheaper, cleaner energy. <a href="https://insideclimatenews.org/news/11102017/climate-denial-coal-industry-global-warming-robert-murray-energy" target="_blank" rel="noopener noreferrer">Robert Murray</a>, founder of the <a href="https://insideclimatenews.org/news/29102019/coal-bankruptcy-bob-murray-energy-chapter-11-trump-regulations-rollback" target="_blank" rel="noopener noreferrer">now-bankrupt coal company Murray Energy</a> and one of Trump's closest industry allies, gave the president a "wish list" early on that became a virtual template for the administration's rollback of regulations. </p><p>The administration swiftly lifted an Obama moratorium on new coal leases on federal lands, to no real benefit. The decline of coal continued unabated, but Trump remained an unapologetic champion of the dirtiest fossil fuel. </p>
Trump's War on Science<p>When U.S. government scientists released their latest volume of the <a href="https://science2017.globalchange.gov/" target="_blank" rel="noopener noreferrer">National Climate Assessment in November 2018, </a>it revealed much about the robust, sobering scientific consensus on climate change.</p><p>It also revealed the striking disconnect between Trump and essentially every authoritative institution on the threat of global warming.</p><p>The president rejected the assessment's central findings—based on thousands of climate studies and involving 13 federal agencies—that emissions of carbon dioxide are caused by human activities, are already causing lasting economic damage and have to be brought rapidly to zero.</p><p>"I don't believe it. No, no, I don't believe it," Trump told a reporter after the assessment's release. </p><p>In almost every agency overseeing energy, the environment and health, people with little scientific background, or strong ties to industries they would be regulating, were appointed to scientific leadership positions. </p><p>One of the administration's first actions was to order scientists and other employees at EPA and other agencies to halt public communications. Several federal scientists working on climate change have said they were silenced, sidelined or demoted. The words "climate change" have been purged from government reports and other reports have been buried. </p><p>The administration's mistrust of scientists and its tendency toward science denialism would also become a prominent feature of its response to the coronavirus pandemic, when the president <a href="https://www.cnn.com/2020/05/20/politics/coronavirus-travel-alert-cdc-white-house-tensions-invs/index.html" target="_blank" rel="noopener noreferrer">muzzled scientists at the Centers for Disease Control </a>and chafed at the dire predictions of many epidemiological models for Covid-19 deaths. </p><p>With the nation in a state of emergency over the pandemic, Andrew Wheeler, a former coal industry lobbyist who serves as Trump's administrator of the Environmental Protection Agency, <a href="https://insideclimatenews.org/news/23032020/trump-epa-health-secret-science-coronavirus" target="_blank" rel="noopener noreferrer">moved in late March</a> to fast-track the "Strengthening Transparency in Regulatory Science" rule. Wheeler replaced Scott Pruitt, an Oklahoma Republican who served as Trump's first EPA administrator before resigning in 2018 amid an ethics scandal. </p><p>Critics call Wheeler's transparency proposal Orwellian and say it would actually <a href="https://insideclimatenews.org/news/07042020/epa-secret-science-coronavirus-covid" target="_blank" rel="noopener noreferrer">limit the use of human health science</a> in environmental decision-making, by eliminating studies that rely on patients' anonymous medical data.</p><p>While Trump and his conservative allies contend that the reliance on such studies amounts to "secret science," scientists and leading medical authorities respond that it is standard practice to honor patient confidentiality in peer-reviewed studies. </p><p>Numerous studies, including one based on health data from 60 million Medicare recipients, have shown that one of the signature pollutants from the burning of fossil fuels, microscopic particles less than 2.5 microns in width—known as PM 2.5—kill as many as 52,100 Americans prematurely each year.</p><p>Less than a month later, as much of the nation remained locked down to halt the spread of Covid-19, a respiratory disease, the Trump administration rejected a recommendation from government scientists to strengthen the national air quality standard for particulate matter. Trump chose instead to maintain the current PM 2.5 standard, handing the fossil fuel industry a major victory.</p>
A 'Concerted Attack' on Alaska, Public Lands<p>The Trump administration knew no bounds for its fossil fuel agenda, pursuing drilling from the outset on pristine public lands in Alaska and the lower 48 states, where oil companies have long sought access. </p><p>Less than four months after taking office, Trump moved <a href="https://insideclimatenews.org/news/28042017/doanld-trump-arctic-offshore-drilling-ban-obama-executive-order" target="_blank" rel="noopener noreferrer">to lift Obama's offshore Arctic drilling ban</a> and, then, in July 2017, gave Italian oil company Eni a quick green light to drill exploratory wells. </p><p>In March 2018, the Trump administration proposed a resumption of leasing in Alaska's Beaufort Sea. President Obama, shortly before leaving office, had "permanently" withdrawn from drilling there. </p><p>By then, Trump had also carved 2 million acres of land from the Grand Staircase-Escalante and Bears Ears national monuments in southern Utah in what amounted to the most sweeping reductions in protections for public land in U.S. history. </p><p>In September 2018, the Interior Department finalized a <a href="https://www.blm.gov/sites/blm.gov/files/Final%20Rule%20-1004-AE53%20-%20%20Ready%20for%20OFR%209.18.18_508%20%281%29.pdf" target="_blank" rel="noopener noreferrer">rule</a> that loosens methane requirements for oil and gas operations on federal lands. A month later, the administration proposed a regulation to streamline and expedite oil and gas permits on national forest lands. </p><p>The following summer, the administration proposed weakening protections under the Endangered Species Act for threatened species and critical habitat. Shortly thereafter, the Interior Department commenced the public comment period on its plan for oil drilling in the Arctic National Wildlife Refuge that had been included in the 2017 tax bill. </p><p>In early August 2020, the president signed the Great American Outdoors Act appropriating $900 million a year to the Land and Water Conservation Fund and $9.5 billion over five years to reduce maintenance backlogs in the national parks. </p><p>The bipartisan legislation was sponsored by a House Democrat, but Trump extolled its passage as the most significant act in support of parklands since Teddy Roosevelt.</p><p>Still, the administration was preparing, on the eve of the Republican convention, to start selling leases in the Arctic National Wildlife Refuge. The sale was <a href="https://insideclimatenews.org/news/26082020/trump-administration-alaska-oil-drilling-mining-projects" target="_blank" rel="noopener noreferrer">one of six pending projects</a> in which Trump was pursuing more drilling, logging and mining in Alaska.</p><p>One environmentalist called it the most "concerted attack" in 30 years on Alaska's natural resources. </p><p>All six of the Trump initiatives could still be blocked or rolled back in the courts, or undone by a new Biden administration working with a Democratic Congress. But for now, they are proceeding, with enormous consequences for Alaska's environment, and global climate change.</p>
One by One, Obama's Main Climate Accomplishments Fell<p>The same could be said for President Obama's environment and climate legacy: Trump's relentless attacks could be wholly or partially undone by a new administration and Congress. But for now, Trump has accomplished his mission: a near total elimination of his predecessor's most significant measures.</p><p>After countless piecemeal rollbacks during Trump's first two and a half years in office, the administration in June 2019 launched its long-awaited attack on Obama's signature plan to tackle climate change. Designed to cut emissions from coal-fired power plants, Obama called it the Clean Power Plan.</p><p>While the plan was challenged by industry and 27 states and blocked by the U.S. Supreme Court before Obama even left office, it encouraged many states to begin a process of planning for a transition away from coal-fired electricity at a time when cheaper natural gas and renewable energy already were forcing coal plants to shut down. </p><p>Next came Trump's rollback of Obama's 2012 automobile fuel efficiency standards, the single largest step any nation had taken to address global warming by cutting carbon emissions from cars and trucks. The weakened Trump plan will allow automakers to deploy fleets that average just 40 miles per gallon by 2025, instead of 54 mpg.</p><p>If Trump's standard ultimately survives legal challenges, cars and trucks in the United States would emit nearly a billion tons more carbon dioxide during their lifetimes than they would have under the Obama standards. </p><p>Finally, in mid-August, Trump <a href="https://insideclimatenews.org/news/13082020/trump-epa-methane-emission-rollbacks" target="_blank">proposed the rollback</a> of the methane rules, the last major Obama environmental regulation still standing. Methane, a super-pollutant, is 86 times more potent in warming the planet than carbon dioxide over a 20-year period.</p><p>The Obama rule required oil and gas companies to monitor methane leaks and fix them. The Trump replacement weakens those requirements, allowing companies<a href="https://insideclimatenews.org/news/13082020/trump-epa-methane-emission-rollbacks" target="_blank" rel="noopener noreferrer"> to release 4.5 million metric tons more pollution each year. </a></p><p>In the climate realm, Obama is best known, of course, as the driving force behind the 2015 Paris climate accord. </p><p>Trump first announced in a Rose Garden speech in June 2017 that the U.S. would withdraw from the accord in three years, as soon as the treaty allowed. </p><p>So, right on cue, two years later, on Nov. 4, 2019, Secretary of State Mike Pompeo notified the United Nations of the formal exit of the United States, activating the final one-year waiting period. </p><p>The actual U.S. withdrawal is set for Nov. 4, 2020, one day after the presidential election.</p>
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Trump Admin Proposes 'Vicious' Plan for Fossil Fuel Lease Sales in California Amid Historic Wildfires
By Andrea Germanos
Especially given the climate-fueled wildfires ravaging the region, conservationists sounded alarm Thursday in response to a Trump administration proposal for an oil and gas lease sale in California, which would be the state's first such federal auction in eight years.
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The full extent of the damage wrought by the storm formerly known as Hurricane Laura will only continue to grow as the weakened storm continues inland and pollution from petrochemical plants and other industrial sites is discovered.
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Environmental regulators across the country granted more than 3,000 requests from polluting oil and gas operations, government facilities, chemical plants, and other facilities to stop pollution monitoring and other procedures intended to protect human health and the environment, an expansive two-month AP investigation revealed.
By Scott L. Montgomery
The Trump administration has announced that it is opening up the Arctic National Wildlife Refuge to oil and gas development – the latest twist in a decades-long battle over the fate of this remote area. Its timing is truly terrible.
Years of Debate<p>ANWR is inarguably an ecological treasure. With 45 species of mammals and over 200 species of birds from six continents, the refuge <a href="https://www.amnh.org/explore/science-bulletins/earth/documentaries/reading-the-rocks-the-search-for-oil-in-anwr/essay-northern-alaska-rich-in-wildlife-and-oil/" target="_blank">is more biodiverse</a> than almost any area in the Arctic.</p><p>This is especially true of the 1002 <a href="https://www.fws.gov/refuge/arctic/wildlife_habitat.html" target="_blank">coastal plain portion</a>, which has the largest number of polar bear dens in Alaska. It also supports <a href="https://theconversation.com/scientist-at-work-tracking-muskoxen-in-a-warming-arctic-70378" target="_blank">muskoxen</a>, Arctic wolves, foxes, hares, migrating waterfowl and Porcupine caribou, which calve there. Most of ANWR is designated as wilderness, which puts it off-limits for development. But this <a href="https://fas.org/sgp/crs/misc/RL33872.pdf" target="_blank">does not include the 1002 Area</a>, which was recognized as a promising area for energy development when the refuge was created in 1980 and left that way after a 1987 study confirmed its potential.</p><p>Climate change is causing <a href="https://theconversation.com/100-degrees-in-siberia-5-ways-the-extreme-arctic-heat-wave-follows-a-disturbing-pattern-141442" target="_blank">especially rapid warming in the Arctic</a>, with probable negative effects for many of these species. Environmental advocates argue that fossil fuel production in ANWR will <a href="https://www.nrdc.org/protect-arctic-national-wildlife-refuge" target="_blank">add to this process</a>, damaging habitat and impacting the <a href="https://www.alaskapublic.org/2019/07/02/in-arctic-village-gwichin-leaders-say-the-fight-to-stop-drilling-in-the-arctic-refuge-isnt-over/" target="_blank">Indigenous people who rely on the wildlife</a> for subsistence. But the situation is complex: There are also <a href="https://www.ktoo.org/2019/07/02/in-the-alaska-village-where-anwr-is-the-backyard-many-see-drilling-as-an-opportunity/" target="_blank">Indigenous groups who support ANWR development</a> for the jobs and income it would bring.</p><p>Energy companies' interest in ANWR, meanwhile, has risen and fallen over time. The discovery of oil at <a href="https://en.wikipedia.org/wiki/Prudhoe_Bay_Oil_Field" target="_blank">Prudhoe Bay</a> in 1968, followed by <a href="https://www.cfr.org/timeline/oil-dependence-and-us-foreign-policy" target="_blank">two oil shocks in the 1970s</a>, sparked support for exploration and production in the region. But this enthusiasm faded in the late 1980s and '90s in the face of fierce political and legal opposition and years of low oil prices.</p>
A majority of Americas of all political leanings believe the U.S. should develop alternative energy sources rather than expanding production of oil, coal and natural gas. Pew Research Center, CC BY-ND
Is ANWR Oil Worth It?<p>Today the oil industry is facing its greatest set of challenges in modern history. They include:</p><ul><li>A collapse in oil demand and prices due to the global pandemic, with a sluggish and <a href="https://www.iea.org/reports/oil-market-report-august-2020" target="_blank">uncertain recovery</a></li><li>Companies canceling and reducing activity worldwide, with bankruptcies in the U.S. shale industry and <a href="https://energynow.com/2020/08/u-s-oil-gas-rig-count-falls-to-record-low-for-14th-week-baker-hughes/" target="_blank">drilling rig counts</a> falling back to 1940 levels</li><li>New uncertainty about future global oil demand as climate concerns push public interest and government policy toward electric vehicles, and automakers respond with new EV designs</li><li>The growing possibility of Democratic victories in the November 2020 elections, which would likely lead to policies reducing fossil fuel use</li><li>Increasing <a href="https://www.reuters.com/article/us-climate-change-barclays/barclays-pressured-by-shareholders-to-cut-fossil-fuel-financing-idUSKBN1Z700F" target="_blank">investor pressure</a> on banks and investment firms to reduce or eliminate support for fossil fuel projects.</li></ul><p>All of these factors compound the challenges of leasing and drilling in ANWR. Well costs there would be among the highest anywhere onshore in the U.S. Only one well has ever been drilled in the area, so new drilling would be purely exploratory and have a lower chance of success than in better-studied areas. Under these conditions, it would make more sense for companies that are active on Alaska's North Slope to pursue sites they currently have under lease, which pose much lower risk.</p>
Alaska's North Slope outside of ANWR remains rich in oil, according to the latest U.S. Geological Survey assessment. USGS<p>What's more, as I have <a href="https://theconversation.com/large-scale-fracking-comes-to-the-arctic-in-a-new-alaska-oil-boom-75683#comment_1264055" target="_blank">argued previously</a>, it's not clear that there's a need to drill in ANWR. Energy companies have made new discoveries elsewhere south and west of Prudhoe Bay – most recently, the <a href="https://www.rigzone.com/news/pantheon_resources_makes_alaska_north_slope_discovery-13-apr-2020-161730-article/" target="_blank">Talitha Field</a>, which could yield 500 million barrels or more.</p><p>Companies that pursue leases in ANWR also will have to weigh the prospects of litigation, investor anger and a tarnished brand – especially large firms with public name recognition. Shell's experience in 2015, when it <a href="https://www.washingtonpost.com/news/morning-mix/wp/2015/09/28/shell-backtracks-on-controversial-arctic-drilling-plan/" target="_blank">abandoned plans to drill offshore in the Arctic</a> under heavy pressure, indicate what other companies can expect.</p><p>If Trump is voted out of office, I expect that a Biden administration would quickly move to <a href="https://yaleclimateconnections.org/2020/06/most-trump-environmental-rollbacks-will-take-years-to-be-reversed/" target="_blank">reverse</a> the directive for leasing in ANWR. In my view, this contested area will have far more meaning and value as a wildlife refuge in a warming world that is starting to seriously move away from hydrocarbon energy.</p>
By Ray Levy-Uyeda
A farmer for most of his life, Sam Stewart bought farmland in Montana about 35 years ago. Since then, he's planted and harvested his wheat and other crops around 16 open oil wells on this land, which he estimates were dug in the 1920s.
Abandoned Wells<p>The first oil wells in Montana were drilled at the turn of the century, and the industry <a href="https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=6881&context=etd" target="_blank">experienced its first boom</a> in the 1920s. <a href="https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=6881&context=etd" target="_blank">Energy demands of World War II</a> spurred a second boom; between 1942 and 1945, <a href="https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=6881&context=etd" target="_blank">oil production in the Elk Basin region</a> increased from 16,000 to 940,000 barrels annually. When those wells no longer produced oil, companies could just leave. The Oil and Gas Conservation Commission of Montana, tasked with identifying and plugging abandoned wells, wasn't created until 1954, and by that time an untold number of wells had already been drilled, produced, and abandoned. </p><p>As more companies moved into Montana, oil and gas production grew into an increasingly important part of local and state economies; by 2015, it<a href="https://montanapetroleum.org/about-us/economic-impact/" target="_blank"> made up 5.6%</a> of the state's general fund. But the industry that once was a cornerstone of Montana's economy is now in a nosedive: a yearslong decline in global oil production and demand compounded by the <a href="https://www.eenews.net/stories/1063049965" target="_blank">pandemic-induced economic slowdown</a> has produced some of the worst oil <a href="https://www.bloomberg.com/news/articles/2020-04-07/oil-companies-warn-kansas-city-fed-of-widespread-insolvencies" target="_blank">production conditions in recent years</a>.</p><p>In 2016, the most recent year for which he was able to provide data, 4,713 oil and gas wells were in operation in the state and 204 had been abandoned, according to Allen Olson, executive director of the Montana Petroleum Association, a trade organization that works on behalf of the businesses. But that's a <a href="https://montanapetroleum.org/wp-content/uploads/2017/03/MPA-Booklet.pdf" target="_blank">fraction of the tens of thousands</a> that have been drilled in Montana in the past century. </p><p>Data on abandoned wells remain incomplete, which further complicates cleanup efforts. Plus, state legislatures have drastically different policies on how to address abandoned wells. One thing remains certain: The issue is enormous and far-reaching. A 2018 report from the <a href="https://www.epa.gov/sites/production/files/2017-06/documents/6.22.17_ghgi_stakeholder_workshop_2018_ghgi_revision_-_abandoned_wells.pdf" target="_blank">Environmental Protection Agency </a>estimated that the country has 3.2 million abandoned oil and gas wells. </p><p>Abandoned wells in Montana—left by companies that filed for bankruptcy, for example, default to the state. Theoretically, a state-run fund pays for well adoption and closure, but even under state control, the wells often lay unplugged, because plugging abandoned wells and restoring the surface land is expensive. Olson believes that the "state regulatory agency here is doing an excellent job staying on top" of plugging wells. But the <a href="http://www.mtrules.org/gateway/ruleno.asp?RN=36%2E22%2E1308" target="_blank">state's plugging plan</a> doesn't explicitly address the issue of abandoned oil wells, and also neglects to lay out a time-bound plan for plugging wells. </p><p>It's not just that states like Montana don't have a legislative apparatus to hold corporations accountable, says Mitch Jones, the climate and energy program director at Food & Water Watch, a nonprofit that pushes for corporate and government accountability. He says that the lack of governmental action is by design. When wells are abandoned, Jones says, "the costs of doing business are passed on to the public instead of being paid by the shareholders in the industry."</p>
A Boost or a Burden?<p>Kirk Panasuk, a lifelong Montanan, farmer, and member of the Northern Plains Resource Council's Oil and Gas Task Force, remembers growing up with oil wells on his grandparents' farm. Panasuk says "once you've leased the land you've lost control." An oil company would lease the mineral rights—not the surface land but the profitable oil below. That lease might expire, the company would leave, and another company would come in to start the process again.</p><p>Agriculture is a difficult industry, and Panasuk says what seems like "free money" at the outset can lead to problems down the road. Water systems are connected, which means that an oil leak in Montana has the potential to leach chemicals into bodies of water such as the Yellowstone River that flows into other states through the Missouri River, a <a href="https://www.nwd-mr.usace.army.mil/" target="_blank">river crucial</a> to municipal, industrial, and agricultural function. </p><p>Panasuk now volunteers with the NPRC to lobby state legislators on practices that would hold resource extraction companies accountable by mandating water testing and treatment. He admits that he's made money off of these companies by leasing mineral rights to oil producers who then sell the oil at market. Despite the environmental fallout, Panasuk believes that oil companies' leasing of land actually "saved a lot of small farms from failure [and] bankruptcy."</p><p>Olson of the Montana Petroleum Association says that in 2019, when oil was $60 per barrel, a company might produce 100 barrels per day and pay a royalty fee of 12.5%, which could garner a farmer $750 per day for leasing their land. Today, with prices and production down, the payoffs look different. In April, oil prices went into the <a href="https://billingsgazette.com/news/local/oil-price-collapse-hits-billings-area-businesses-hard/article_df10e954-3e0c-5b6c-9641-135208d4ad2c.html" target="_blank">negative</a>, and in August, they're <a href="https://www.oilmonster.com/crude-oil-prices/central-montana-price/159/228" target="_blank">hovering around $30 per barrel</a>. </p><p>While an oil lease might benefit a farmer initially, Jones says that oil companies are well-versed in this practice. "The oil and gas industry takes advantage of the inequities in our agriculture system to prey upon farmers and get them to sign leases for drilling on their land," Jones says, which can "undermine agricultural activity that's taking place."</p><p>In other farming communities around the country, where oil and gas companies produce natural gas through <a href="https://www.scientificamerican.com/article/poor-communities-bear-greatest-burden-from-fracking/" target="_blank">hydraulic fracturing</a>, farmers and members of the local community often bear the brunt of water pollution. Not to mention that farming is dependent on a predictable and healthy climate, which is being threatened by resource extraction. </p>
A Foundation Is Formed<p>In early 2019, Curtis Shuck was in the northern town of Shelby, about 15 miles south of the Canadian border, meeting with farmers about agricultural transportation. More than three decades in the oil and gas industry hadn't prepared him for what he saw—abandoned, methane-leaking, unplugged oil wells.</p><p>He walked the area with the farmers and learned how they worked around the wells, most of which had stopped producing oil decades earlier. What was left were remnant pipes strewn across the fields and a sulfuric stench like rotten eggs. </p><p>On his journey home to Bozeman, Shuck couldn't stop thinking about what he had seen, knowing that each open well was responsible for tons of emissions. On that drive, the idea for the Well Done Foundation was born. </p><p>Just over a year after that first trip north, the Well Done Foundation plugged its first three wells and expanded beyond the Montana pilot program into dozens of other states. Shuck says that he hopes the foundation can also gather the concrete data that the government lacks, such as the number of orphaned wells and their emissions, which makes it difficult to develop solutions.</p><p>Shuck says he can acknowledge the state's shortcomings in their cleanup efforts while building relationships with those who make regulatory decisions. The "state fund is grossly underfunded," Shuck says, but "why should the public bear the burden of this orphaned well issue?"</p><p>The Well Done team identifies abandoned oil wells around the state, and then posts a financial bond to the state's Oil & Gas Conservation Commission, a way for the state to track and partially fund the plugging. In doing so, the state is holding up its end of the bargain, but without this push from Well Done, it might take the state years to accomplish what the Foundation does in months. </p><p>The foundation researches individual well emissions for about nine months as well as studying the construction of a well, how deep it goes, and the materials that are required to plug it. Shuck says it's important that the foundation does its due diligence to identify wells that have collapsed in on themselves or have an obstruction that needs to be addressed before plugging. </p><p>Then the foundation works with county commissions, private entities, and those who own the surface land to develop and execute a "plugging plan," which so far has been funded by private or anonymous donors. The actual plugging of the well takes only a few days, and then the Foundation works to restore the surface land to its "pre-drilling condition," which allows a farmer to seed the land and grow crops. </p>
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