...Offshore Drilling – To Drill or Not to Drill The Effects of Drilling on the Environment and Business Lydia M. Wityk Strayer University Abstract This paper will explore the business of oil companies drilling off the coast line of the United States. It will explore the benefits from the business of oil companies to the detrimental effects of the oil spills from the offshore drilling. Should we continue to drill for oil off the coast with the possibility of additional spillage into the oceans. We know that oil spills damage the environment, and the social and economic welfare of the residents in the area. At the same time the oil companies can positively affect the economy and the United State’s welfare. In comparing both sides of the argument I will look at the past and current oil companies to determine if they acted morally in their everyday business practice. At this post-BP disaster era, the United States is questioning whether we should continue to drill and expand our drilling. I will utilize the consequentialist theory to determine what would be the best next step for the U.S. to take. Using the current information gathered on BP’s business practice and the effects of the oil spill, I will weigh the ratio of good to bad to determine my opinion on whether to drill or not to drill. Off Shore Drilling – To Drill or Not to Drill The Effects of Drilling on the Environment and Business The United States has been offshore drilling for oil since...
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...A CRITICAL ANALYSIS OF THE BP OIL SPILL RESPONSE AND PREPAREDNESS PLAN FOR THE DEEP HORIZON – WHY DID IT FAIL? Toni Josina Elfrieda Beukes* May 2012† ABSTRACT: Based on events that unfolded in the U.S. in the weeks and subsequently months of the Macondo well blow-out, it is clear that neither industry nor government was equipped to deal with a spill the scale and complexity of the Deepwater Horizon disaster. As one of its key recommendations to President Obama for addressing the causes and consequences of the spill, the National Commission on the BP Deepwater Horizon Oil Spill in its final report, stated the need for “strengthening oil spill response, planning and capacity”. Industry best practice dictates that quickness and accuracy are key requirements for effective oil spill response and preparedness planning (OSRPP); yet it took nearly three months to seal the Macondo well. This paper is accordingly concerned with the reasons for the apparent failure of the BP oil spill response plan. This failure will be considered in light of current international environmental regulations on OSRPP and applicable United States legislation, whilst assessing the BP oil spill response plan’s compliance therewith. The study will also consider some theory in the development of OSRPP by looking specifically at risk assessment tools and applying key criteria to the BP oil spill response plan to determine its adequacy and appropriateness for its operations in the GOM. What...
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...Oil Drilling Jasmine A. Richardson Freshman Seminar Friday 10:20-11:20 Throughout the years the government has spent millions of dollars on oil drilling. But what is the actual purpose of oil drilling? Is it necessary? Are we spending too much money on this one project or is it useful in the end? These questions have been debated so much over and over again. But the question is am I for or against oil drilling? Oil drilling takes up too much time and money for one simple purpose. It takes time and a workload to even begin this process. In order to perform a normal oil drilling process you have to find a land that has to be cleared and leveled, water must be nearby, if there is no water the crews have to dig water well, and lastly the crews have to reserve a pit. All of this is very expensive and damaging to the land. In an article in Bloomberg Business week it was recorded that marathon oil spent 10 million on oil drilling and that was just for one time. If oil drilling is really purposeful for the country why make it so expensive? There aren’t any other resources to finding oil? And the main objective is if we’re spending so much money on oil drilling then why are we even fighting in the war anymore? The damages to the land are excruciating and the government always ends up paying for the damages so that’s double to money they’re spending. One expensive tool they use to capture the oil is the oil rig. They use it to drill into the ground so that they can confiscate...
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...Current ethical issues on Oil Spill Today, with the continual and rapidly growing need of energy demand by big nations like United States and China continuing to furnish their domestic consumptions of oil have led to increased prices of gasoline whereby alternative forms of energy production are sought. With this in mind, offshore drilling can be a viable option for satiating the need of oil and also to boost the economy of the nation. In this report, I am going to discuss how the current Deepwater Horizon rig explosion has led to disastrous oil spill into the Gulf of Mexico causing environmental problems and also discuss how the oil spill if resolved and with safe and secure drilling techniques, the economic impact of offshore drilling can outweigh the environmental issues. Concerning the Deepwater Horizon rig explosion on April 20, 2010, which escalated into a massive amount of oil spillage from the well reservoir as the oilrig sunk killing eleven crewmembers on board. The key players related to the rig explosion are British Petroleum (BP), Transocean, rig owner, and Halliburton. BP is one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items. (“BP at a glance,” 2010) Transocean, the world’s largest offshore drilling contractor and the owner of Deepwater Horizon rig, provides the most versatile fleet of mobile offshore drilling units to help clients...
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...Should the U.S. drill for oil in Alaska’s environment? I believe the U.S. should not drill for oil in Alaska, because firstly, a letter in document D states... “The Inupiat Eskimo people are the Indigenous people of the Arctic Environment. Nevertheless, they still rely on the land and resources of the North Coastal Plain for food, shelter, culture, and economic well-being.” Secondly, in document D it states “The ANWR is determined to prevent development in even the smallest corner of the Arctic Coastal Plain. The only way we would want drilling to be done on only the private lands and island outside of the ANWR.” So consequently, this could potentially destroy the Alaskan Coastal Plain. The U.S. should not drill for oil in Alaska. Why? Firstly, charts have shown that the U.S. uses way too much oil than we need. So, oil consumption rates could be lowered without damaging Alaska’s environment by...
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...Offshore Drilling: A Bad Idea Crude oil is one of the three kinds of fossil fuel (coal, crude oil, and natural gas) that are widely used by humanity. It plays a very important role in our world, as it is one of our primary energy sources. According to the U.S. Energy Information Administration (EIA), the United States is the biggest oil consumption country in the world, which consumes 19.5 million barrels of oil per day (EIA, “Country Energy Profiles: Oil Consumption”). Crude oil can not only be found on the continent, but also in the ocean. The activity that people discover and extract oil from the ocean is called offshore drilling. Offshore drilling has a long history in the United States. The first offshore well was drilled in 1896, in California (“History of Offshore Oil” 163). Oil soon became the primary energy source of the United States by 1910, as the internal combustion engine, which requires gasoline to power, was invented (“History of Offshore Oil” 163). In the next few decades, offshore drilling industry in the U.S. was going up quickly (“History of Offshore Oil” 163-64). Along with the development of the industry, the government regulation came up. To pursue offshore drilling in the U.S. OCS (Outer Continental Shelf) lands, oil companies need to acquire the lease from the U.S. federal government (“History of Offshore Oil” 164). The Outer Continental Shelf Lands Act (OCSLA) passed in 1953 ensured federal government’s control of the OCS (“History of Offshore Oil” 164)...
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...In the mid-2000s, oil prices began to surge due to an increase in global oil consumption. Since oil production in conventional fields could not meet demand, oil prices continued to rise. With oil prices increasing, energy companies saw it profitable to begin obtaining oil from shale formations that were traditionally hard to drill using techniques such as hydraulic fracturing. Such techniques led to a boom in unconventional oil production. Due to these techniques, the United States alone has added 4 million barrels of oil per day to the global market since 2008 (Figure 1). However, such an increase in supply was initially masked by political conflicts in key oil regions (Figure 2). As oil companies in the U.S. continued to see productivity growth, the global market began to drastically change. Oil demand flatlined as economies weakened and cars became more fuel-efficient; this ultimately led to a surplus of oil (Figure 3) that caused oil prices to drop. While companies have utilized hydraulic fracturing (“fracking”) to increase oil production in the U.S., they now are starting to feel monetary constraints due to increased marginal costs. Fracking a well is extremely sensitive to the law of diminishing returns, with output falling about 65% after the first year, causing new wells to be constantly drilled in order to maintain production (Plumer, 2015). However, the decreasing marginal product does allow companies to quickly adjust to falling oil prices by scaling back on...
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...sources to develop adequate energy. It is my position we should continue to drill wherever oil is available. There is a Congressional ban on drilling offshore in regions along the North Atlantic coast, most of the Pacific coast, parts of the Alaskan coast, and most of the eastern Gulf of Mexico (When a science fiction nightmare becomes a reality). The areas under the ban are estimated to hold over 18 billion barrels of oil but after recent estimates have increased the previous estimates of untapped oil in Gulf of Mexico from 9 billion to 45 billion barrels, there could be much more oil under the sea than previously thought. Environmentalists have argued against all types of drilling. They do not approve offshore drilling because of danger to marine life. They do not also approve onshore drilling because of the pollution risks involved to the extent of opposing oil pipelines. The recent oil spill in the Gulf has strengthened their argument further but they do not bring to the table adequate answers to American energy needs. Whereas the oil spill in the Gulf was a serious matter, it was just an accident and accidents happen all the time. The perception that oil pollution is a result of drilling is wrong. Equipment failure and human error are the causes. We do not stop flying just because there has been a plane crash somewhere. We identify the problems and fix them. The advantages of drilling far outweigh the disadvantages. We can still drill in a way that protects the world’s oceans...
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...Overview The oil industry is an integral part of the U.S economy and with new legal revisions in place; Royal Dutch Shell will be better able to develop technologies to continue advancing this industry. Also know as Shell, they are headquartered in the Netherlands and are the second largest energy company in the world. “Shell has operations in over 90 countries, produces around 3.1 million barrels of oil equivalent per day and has 44,000 service stations worldwide (Shell, 2011).” Shell Oil Company, its subsidiary in the United States, is one of Royal Dutch Shell’s largest businesses. It has integrated itself into every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading. It also has in its holdings major renewable energy activities, including bio-fuels, hydrogen, solar and wind power. Shell takes pride in being a leading innovator in the oil industry. Political Analysis At $1.8 trillion dollars a year, oil is the most traded commodity and the demand over the past year is rising. As discussion to extended drilling on U.S soil has intensified, President Obama has recently enacted a plan to place a hold on the 1,700 mile Keystone Pipeline Project after hearing concerns from environmental groups such as the BlueGreen Alliance. This comes after “the State Department subjected the Keystone Project to three years of review” (Krauthammer, 2011) and construction was set to...
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...Off Shore Drilling Jessica Couture HUM/111 CRITICAL AND CREATIVE THINKING 1/29/2012 Tracie Comer Off shore drilling Our country has been getting foreign oil from other countries for as long as I can remember. The U.S relies so much upon Canada, Saudi Arabia, Nigeria, Venezuela and Mexico for our sources of Net Crude Oil and Petroleum Product Imports. My personal belief is that we should not continue off shore drilling. I think it’s time the U.S doesn’t rely on other countries for our oil. Off shore drilling is a bad idea because it’s the worst impacts of global warming; we need to switch from fossil fuels to renewable energy within the next 10 years. The billions of dollars that would be spent on offshore oil drilling just postpone the inevitable transition from fossil fuels to renewable energy. Renewable energy is available now, so it’s time to walk away from fossil fuels and toward a clean energy future. We burn 25% of the world's oil here in the U.S., but we have only 3% of the world's oil reserves. So even if all offshore oil magically came to market today, the vast majority of our oil would continue to be imported, and we wouldn't see price relief at the pump. The reason why I think the way I do about the situation is because offshore drilling poses serious threats to wildlife and natural habitats. I have always been an animal lover and I adore the ocean sea life. For example in the Gulf of Mexico, an explosion on an oil rig operated by the petroleum company...
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...for crude oil. I will try to discuss how Marathon could keep the price at the pump the same without losing any profits – even if global crude production has decreased by 10%. Finally, I will discuss President Obama’s June 2010 deep-water drilling moratorium. It was originally for six months; I will try to determine the impact of a continued moratorium on deep-water drilling for retail gas prices in the U.S. WHICH OF MARATHON’S PROCESSES CAN BE IMPROVED THE MOST? A business needs to be at least as efficient as its main competitors, in order to be able to compete and survive in the long-term. A more efficient business will produce goods at a lower cost than competitors can supply. A more efficient business can generate more profit, possibly at lower prices. (Tutu2u.net) In analyzing Marathon’s product processes, there are areas that are open to a large number of efficiency improvements. Particularly, the world will run out of oil sometime in the distant or near future. Both Marathon as a company (and the United States in general) has to explore and find oil more efficiently so that the use of oil as a resource can be optimized. Therefore, that is the area of the oil production process that could be improved the most. A new source or field can change the whole game in terms of the other processes down the line (that is, as far as transporting, refining, and other processes). The well-drilling process can be improved in the following ways: * “Slimhole oil production”:...
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...Handbook: The Oil Services Industry By Investopedia Staff A A A There is no doubt that the oil/energy industry is extremely large. According to the Department of Energy (DOE), fossil fuels (including coal, oil and natural gas) makes up more than 85% of the energy consumed in the U.S. as of 2008. Oil supplies 40% of U.S. energy needs. (Visit the U.S. Department of Energy's Energy Sources information page for more insight.) Before petroleum can be used, it is sent to a refinery where it is physically, thermally and chemically separated into fractions and then converted into finished products. About 90% of these products are fuels such as gasoline, aviation fuels, distillate and residual oil, liquefied petroleum gas (LPG), coke (not the refreshment) and kerosene. Refineries also produce non-fuel products, including petrochemicals, asphalt, road oil, lubricants, solvents and wax. Petrochemicals (ethylene, propylene, benzene and others) are shipped to chemical plants, where they are used to manufacture chemicals and plastics. (For more insight, read Oil And Gas Industry Primer.) There are two major sectors within the oil industry, upstream and downstream. For the purposes of this tutorial we will focus on upstream, which is the process of extracting the oil and refining it. Downstream is the commercial side of the business, such as gas stations or the delivery of oil for heat. Oil Drilling and Services Oil drilling and services is broken into two major areas: drilling and oilfield...
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...Deepwater Horizon drilling rig exploded fifty miles from the coast of Louisiana, killing eleven men and setting off the largest oil disaster in U.S. history. Its impact would reverberate well beyond the Deepwater Horizon and the families of the eleven men who died, and even beyond the people and places of the Gulf of Mexico. Known as the BP spill, this tragedy seemingly was not an isolated incident. According to Juhasz (2011), “BP was not a lone actor; rather, this tragedy was the predictable outcome of an industry that has pushed well beyond its own technological capacity and beyond the government’s ability to regulate it” (p. 2). This oil well disaster has had important ramifications for the future of our country. In order to tackle the nation’s energy crisis, there must be an establishment of an orderly transition from crude oil to an affordable, sustainable energy future. The purpose of this paper is to explore ways of converting crude oil to consumer fuels. The paper will examine Marathon Oil’s product process and give a determination as to which phase shows a need for the greatest efficiency improvements. In addition, the paper will address the retail price of gasoline and its relation to the world’s demand for crude oil, as well as what Marathon can do to keep the gas prices the same without losing profits even if global crude production is decreased by 10%. Finally, the impact of a continuation of a deep-water drilling moratorium on U.S. gas prices will be...
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...refuge in north-eastern Alaska, States. The reason why it is being preserved is because Robert Marshall in 1938 was able to understand how we would change the habitats of animals and destroys them to get the things we need like oil. So he proposed a ‘permeant American Frontier’ that would preserve a big chunk of Arctic Alaska wilderness. In the 1950’2, people who were worried about habitat loss and pollution proposed to Congress for that same frontier. In 1960, Congress created the refuge. When did they discover oil in Alaska and how much is estimated to be there? They discovered the oil i9n Alaska in 19870 at Prudhoe Bay it supplied two million barrels of oil a day. However as time has gone on the amount of oil that is in the Bay has decreased and is getting lower and lower each year, this has then lead to the U.S government having to find new oil supplies and one of these is in the ANWR. Geologists examined this area and it has an estimated amount of oil of 10.4 billion barrels of oil. The rest of the oil that is in the U.S is estimated at 120 billion barrels. Give at least two reasons for drilling in the ANWR: 1. The United States has Oil but not enough to meet its own demands. 2. Buying the oil in form the other countries cost the U.S hundreds of billions of dollars a...
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...Gulf Oil Spill Grand Canyon University: Economics for Public Administrators ADM-614 September 10, 2014 Gulf Oil Spill The National Oceanic and Atmospheric Administration (NOAA) estimated that 4.9 million barrels of oil spilled into the Gulf of Mexico over a span of 87 days. This catastrophic environmental disaster is known as the Gulf Oil Spill occurred on April 20, 2010 about 50 miles off the coast of Louisiana. An oil drilling rig (Deepwater Horizon) leased by British Petroleum (BP) ignited and exploded spewing 42,000 gallons of oil a day into the Gulf. Two days later the rig sank increasing the spill rate to 210,000 gallons of oil a day. Analysis – Government intervention The U.S. Government named BP as the responsible party in the incident; BP was found negligent in communication and safety practices, the company was held accountable for all cleanup costs resulting from the oil spill. Individuals and businesses that incurred damages as a result of the oil spill were able to submit claims for cleanup cost, property damages, loss of earnings or profits, and for physical injuries or death. The private industry and public sector both sectors failed in many aspects: inspection measures were not properly in place, safety updates and recommendations were not followed and sufficient resources were not provided to enforce safety guidelines and inspection requirements. Randall Holcombe’s book Public Sector affirms that government has a role to play in the market economy;...
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