Jason Barton

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Archive for the ‘Offshore Drilling’ tag

UK Forcing Oil Companies to Internalize their Externalities

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It looks like the UK will force energy companies wishing to drill for oil off its coasts to be responsible for potential indirect costs of their operations. Such a strategy, which economists would call internalizing their external costs, is what I and many others consider the most efficient way to preserve both economic and environmental health.

I think this is great news.

  • JANUARY 6, 2011, 5:33 A.M. ET

UPDATE: UK Lawmakers Question Deep Water Drilling Safety

   By James Herron

LONDON (Dow Jones)–U.K. lawmakers Thursday raised serious doubts about whether the oil industry is prepared to tackle an oil spill similar to the Deepwater Horizon blowout should it occur in the North Sea, but they stopped short of recommending a moratorium on drilling similar to that imposed in the U.S.

Instead, the U.K. Parliament’s Energy and Climate Change Committee called on the government and regulators to compel companies to improve their spill response plans, install extra failsafe equipment on rigs, and increase financial provisions for spill costs.

Major changes to drilling regulations could have a significant impact on the U.K. because its main deep water area, west of the Shetland Islands, is thought to be home to the bulk of the country’s undeveloped oil and gas resources. For this reason, “a moratorium on deep water drilling off the west coast of Shetland would undermine the U.K.’s energy security and isn’t necessary,” said Tim Yeo, the Conservative member of Parliament who is chair of the committee.

Read the entire article here.

The Offshore Paradox

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The article below contradicts the point I made yesterday, where I contended that the oil spill in the Gulf would not likely cause much change to future oil drilling. I did say that regulations would likely increase to ensure greater safety, but that in this tenuous economy Congress would be unlikely to make significant changes that could greatly hinder securing domestic energy resources.

The article below, as well as a comment received on my post yesterday, argue the contrary, pointing out how Three Mile Island largely derailed the growth of the nuclear industry in the U.S.

While I do not feel the panicked rush that many exhibit towards overhauling our current energy matrix, I do believe it is important to continue laying the groundwork towards more renewable sources of energy. We should continue implementing technologies for bioenergy, solar, wind, and geothermal provided they are competitively cost effective and energetically efficient. Most important and cost effective, of course, is energy efficiency.

No one should rejoice in an oil spill or any other disaster as positive. To do so would be grossly inappropriate and exploitative. That said, if the current mess in the Gulf can motivate us towards a cleaner, more responsible energy matrix, it is making something positive out of what is otherwise entirely negative.

June 04, 2010

Ken Silverstein, EnergyBiz Insider

Just as offshore natural gas drilling got its legs, the rug has been pulled out from underneath it. The mammoth oil spill in the Gulf of Mexico is to blame.

The question of whether to allow more production in light of the BP oil disaster is one that is likely to haunt the oil and gas sectors for a long time. It’s tantamount to how the accident at Three Mile Island has derailed nuclear development for three decades. For now, the Obama administration has pulled back on its earlier commitment to allow more offshore drilling and instead has decided to “study” the issue.

Read the entire article here.

Offshore Drilling Revenue Sharing Takes Hold in Senate Climate Bill

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Published: March 19, 2010

Coastal states that agree to oil and gas drilling off their shores would be offered one-quarter of the revenue, under the latest draft of the new climate and energy bill, sources on and off the Hill say.

Another 10 percent would go to the Land and Water Conservation Fund, with the remaining 65 percent going to the Treasury for deficit reduction, under the draft authored by Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.), according to a Senate aide close to the process and people who have seen the draft.

Read the entire article here.

Written by Jason

March 20th, 2010 at 7:21 pm