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Shell abandons Arctic oil drilling: indications not sufficient to warrant further exploration

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Shell announced today that it was abandoning further work on the controversial Burger J exploration well, located in Alaska’s Chukchi Sea.  The Burger J well is approximately 150 miles from Barrow, Alaska, in about 150 feet of water.

Shell drilled the well to a total depth of 6,800 feet this summer. They found indications of oil and gas in the Burger J well, but these are “not sufficient to warrant further exploration in the Burger prospect”.  The well will be sealed and abandoned in accordance with U.S. regulations.

“The Shell Alaska team has operated safely and exceptionally well in every aspect of this year’s exploration program,” said Marvin Odum, Director, Shell Upstream Americas.  “Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US. However, this is a clearly disappointing exploration outcome for this part of the basin.”

Shell will now cease further exploration activity in offshore Alaska for the foreseeable future. This decision reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.

The company expects to take financial charges as a result of this announcement. The balance sheet carrying value of Shell’s Alaska position is approximately $3.0 billion, with approximately a further $1.1 billion of future contractual commitments. An update will be provided with the third quarter 2015 results.

Shell holds a 100% working interest in 275 Outer Continental Shelf blocks in the Chukchi Sea. Shell says operations will continue to safely de-mobilize people and equipment from the Chukchi Sea.

Carbon Tracker CEO Anthony Hobley said: “Shell’s decision to halt exploration in the Arctic is a win for common sense and capital discipline, but why did it take $7bn of shareholders’ money to come to this view? Analysis by Carbon Tracker and others clearly showed that Arctic oil needs much higher prices to give investors a decent return. Yet the decision appears a reluctant pause as Shell suggests it would have continued to drill if it had found more oil and gas and it has only halted exploration ‘for the foreseeable future’.

“Shell still does not fully grasp either the need for real capital discipline or that the energy sector is undergoing fundamental technological transformation and it risks wasting billions more of shareholder money.

“Today for example Shell will announce the launch of a new Energy Transitions Commission which dangerously ignores the pace of change being demanded by Governments to keep the world within UN’s 2⁰C climate change target. Plans that would see half our power still generated by fossil fuels in 2050 risk putting us on a path to 4⁰C of warming.

“We question the credibility and independence of an Energy Transitions Commission funded by fossil fuel incumbents and Shell’s track record on climate change does not inspire us with confidence.”

Also commenting on Royal Dutch Shell’s announcement that it will cease oil exploration in offshore Alaska for the foreseeable future, Rod Downie, WWF Polar Programme Manager said: “Today the Arctic has seen a reprieve from Shell’s irresponsible drilling. Their reckless $7 billion pursuit of oil in this fragile icy habitat puts local people and wildlife, such as polar bears, at risk.

“Shell should now set out to concerned shareholders and the public how it intends to transition its business model to one which is compatible with tackling climate change.”

Commenting on news that Shell has stopped Arctic oil and gas exploration off the coast of Alaska after “disappointing” results, Friends of the Earth’s CEO Craig Bennett said: “This is wonderful news for the people and wildlife of the Arctic region, but it must become a turning point in the fight to prevent catastrophic climate change.

“Just think what the $7bn Shell spent in the Arctic could have done for our climate and energy system if it had been invested in solar, wind and tidal power, rather than being wasted on looking for yet more oil that we cannot burn?

“The UK Government must see the writing on the wall, and switch its support from fracking and oil to the renewable energy industry – or risk being stuck with outdated, redundant, unusable technologies.”

Greenpeace International Executive Director Kumi Naidoo said: “This is a defining day for the Arctic. It’s a huge victory for the millions of people who stood up against Shell and a disaster for other oil companies with interests in the region. Shell has gambled big and lost big, both in terms of financial cost and its public reputation. This has become the most controversial oil project in the world, and despite its bluster Shell has been forced to walk away with nothing.

“It’s time to make the Arctic ocean off limits to all oil companies. This may be the best chance we get to create permanent protection for the Arctic and make the switch to renewable energy instead. If we are serious about dealing with climate change we will need to completely change our current way of thinking. Drilling in the melting Arctic is not compatible with this shift.

“Greenpeace’s campaign to save the Arctic will continue with passion and increased strength. We are campaigning for a protected sanctuary in international waters around the North Pole, and we hope that vision is one step closer after today.”

Reacting to news that Shell is ending its Arctic drilling programme, Greenpeace UK executive director John Sauven said: “Big oil has sustained an unmitigated defeat. They had a budget of billions, we had a movement of millions. The ‘unpredictable regulatory environment’ that forced Shell out of the Arctic is otherwise known as massive pressure from more than 7 million people. For three years we faced them down, and the people won.

“The Save the Arctic movement has exacted a huge reputational price from Shell for its Arctic drilling programme. And as the company went another year without striking oil, that price finally became too high. They’re pulling out.

“Now President Obama should use his remaining months in office to say that no other oil company will be licenced to drill in the American Arctic.

“Soon the nations of the world will gather in Paris to negotiate a deal on climate change. Shell’s defeat shows which way the wind is blowing. If a movement of seven million people can beat one of world’s biggest energy companies, think what we can do when we come together in our tens and hundreds of millions. This is a moment to appreciate that when we assert our power, we can win extraordinary victories in the fight against climate change.”

 

Energy

Is Wood Burning Sustainable For Your Home?

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sustainable wood burning ideas

Wood is a classic heat source, whether we think about people gathered around a campfire or wood stoves in old cabins, but is it a sustainable source of heat in modern society? The answer is an ambivalent one. In certain settings, wood heat is an ideal solution, but for the majority of homes, it isn’t especially suitable. So what’s the tipping point?

Wood heat is ideal for small homes on large properties, for individuals who can gather their own wood, and who have modern wood burning ovens. A green approach to wood heat is one of biofuel on the smallest of scales.

Is Biofuel Green?

One of the reasons that wood heat is a source of so much divide in the eco-friendly community is that it’s a renewable resource and renewable has become synonymous with green. What wood heat isn’t, though, is clean or healthy. It lets off a significant amount of carbon and particulates, and trees certainly don’t grow as quickly as it’s consumed for heat.

Of course, wood is a much less harmful source of heat than coal, but for scientists interested in developing green energy sources, it makes more sense to focus on solar and wind power. Why, then, would they invest in improved wood burning technology?

Homegrown Technology

Solar and wind technology are good large-scale energy solutions, but when it comes to small-space heating, wood has its own advantages. First, wood heat is in keeping with the DIY spirit of homesteaders and tiny house enthusiasts. These individuals are more likely to be driven to gather their own wood and live in small spaces that can be effectively heated as such.

Wood heat is also very effective on an individual scale because it requires very little infrastructure. Modern wood stoves made of steel rather than cast iron are built to EPA specifications, and the only additional necessary tools include a quality axe, somewhere to store the wood, and an appropriate covering to keep it dry. And all the wood can come from your own land.

Wood heat is also ideal for people living off the grid or in cold areas prone to frequent power outages, as it’s constantly reliable. Even if the power goes out, you know that you’ll be able to turn up the heat. That’s important if you live somewhere like Maine where the winters can get exceedingly cold. People have even successfully heated a 40’x34’ home with a single stove.

Benefits Of Biomass

The ultimate question regarding wood heat is whether any energy source that’s dangerous on the large scale is acceptable on a smaller one. For now, the best answer is that with a growing population and limited progress towards “pure” green energy, wood should remain a viable option, specifically because it’s used on a limited scale. Biomass heat is even included in the UK’s Renewable Heat Initiative and minor modifications can make it even more sustainable.

Wood stoves, when embraced in conjunction with pellet stoves, geothermal heating, and masonry heaters, all more efficient forms of sustainable heat, should be part of a modern energy strategy. Ultimately, we’re headed in the direction of diversified energy – all of it cleaner – and wood has a place in the big picture, serving small homes and off-the-grid structures, while solar, wind, and other large-scale initiatives fuel our cities.

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Energy

7 Benefits You Should Consider Giving Your Energy Employees

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As an energy startup, you’re always looking to offer the most competitive packages to entice top-tier talent. This can be tough, especially when trying to put something together that’s both affordable but also has perks that employees are after.

After all, this is an incredibly competitive field and one that’s constantly doing what it can to stay ahead. However, that’s why I’m bringing you a few helpful benefits that could be what bolsters you ahead of your competition. Check them out below:

Financial Advising

One benefit commonly overlooked by companies is offering your employees financial advising services, which could help them tremendously in planning for their long-term goals with your firm. This includes anything from budgeting and savings plans to recommendations for credit repair services and investments. Try to take a look at if your energy company could bring on an extra person or two specifically for this role, as it will pay off tremendously regarding retention and employee happiness.

Life Insurance

While often included in a lot of health benefits packages, offering your employees life insurance could be an excellent addition to your current perks. Although seldom used, life insurance is a small sign that shows you care about the life of their family beyond just office hours. Additionally, at such a low cost, this is a pretty simple aspect to add to your packages. Try contacting some brokers or insurance agents to see if you can find a policy that’s right for your firm.

Dedicated Time To Enjoy Their Hobbies

Although something seen more often in startups in Silicon Valley, having dedicated office time for employees to enjoy their passions is something that has shown great results. Whether it be learning the piano or taking on building a video game, having your team spend some time on the things they truly enjoy can translate to increased productivity. Why? Because giving them the ability to better themselves, they’ll in turn bring that to their work as well.

The Ability To Work Remotely

It’s no secret that a lot of employers despise the idea of letting their employees work remotely. However, it’s actually proven to hold some amazing benefits. According to Global Workplace Analytics, 95% of employers that allow their employees to telework reported an increased rate of retention, saving on both turnover and sick days. Depending on the needs of each individual role, this can be a strategy to implement either whenever your team wants or on assigned days. Either way, this is one perk almost everyone will love.

Health Insurance

Even though it’s mandated for companies with over 50 employees, offering health insurance regardless is arguably a benefit well received across the board. In fact, as noted in research compiled by KFF, 28.6% of employers with less than 50 people still offered health care. Why is that the case? Because it shows you care about their well-being, and know that a healthy employee is one that doesn’t have to worry about astronomical medical bills.

Unlimited Time Off

This is a perk that almost no employer offers but should be regarded as something to consider. According to The Washington Post, only 1-2% of companies offer unlimited vacation, which it’s easy to see why. A true “unlimited vacation” program could be a firm’s worse nightmare, with employees skipping out every other week to enjoy themselves. However, with the right model in place that rewards hard work with days off, your employees will absolutely adore this policy.

A Full Pantry

Finally, having a pantry full of food can be one perk that’s not only relatively inexpensive but also adds to the value of the workplace. As noted by USA Today, when surveying employees who had snacks versus those who didn’t, 67% of those who did reported they were “very happy” with their work life. You’d be surprised at how much of a difference this could make, especially when considering the price point. Consider adding a kitchen to your office if you haven’t already, and always keep the snacks and drinks everyone wants fully stocked. Doing so will increase morale tremendously.

Final Thoughts

Compiling a great package for your energy company is going to take some time in looking at what you can afford versus what’s the most you can offer. While it might mean cutting back in other areas, having a workforce that feels like you genuinely want to take care of them can take you far. And with so many different benefits to include in your energy company’s package, which one is your favorite? Comment with your answers below!

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