There goes the neighborhood. America’s second-largest U.S. oil refiner, ConocoPhillips, is moving onto a beautiful 23,650-acre lot in the National Petroleum Reserve in Alaska (NPRA) – a pristine area once described as “the largest tract of undisturbed public land in the United States.” It will soon be “undisturbed” no more. Conoco’s move represents the first time the NPRA – home to wolves, grizzly bears, wolverines, migratory birds and half a million caribou – will be subjected to commercial oil production, and all that comes with it.
From a Dec. 20 Wall Street Journal report:
The U.S. Army Corps of Engineers issued a permit on Monday to ConocoPhillips that would allow the energy company to develop the first commercial oil well in the National Petroleum Reserve in Alaska. …
Though the reserve has been open to drilling since 1998, no company has commercially produced oil there; the arctic conditions, lack of existing infrastructure and environmental restrictions mean that drilling in the reserve is a costly endeavor.
Environmental concerns surrounding the new venture are running high, and rightly so. At the same time Conoco is preparing to break new ground in Alaska, company officials are scrambling to get a handle on the fallout from not one but two recent oil spills in China. Combined, the incidents released 126,000 gallons of oil and “oil-based mud product,” polluting more than 330 square miles of Bohai Bay in northeast China. Conoco has been widely condemned for egregious safety lapses leading up to the spills in June. From a Nov. 11 Associated Press report:
Chinese authorities said Friday that negligence by a ConocoPhillips subsidiary caused recent oil spills in Bohai Bay that have drawn intense criticism from marine authorities and environmentalists.
The State Oceanic Administration said in a statement on its website that an investigation found there were shortcomings in ConocoPhillips China’s systems and management and that the company failed to take necessary preventive measures after signs of a problem emerged. The oil spills began in June in Penglai 19-3, China’s largest oil field.
These factors led “to a major oceanic oil spill pollution accident occurring due to negligence,” the statement said.
Reassured about Conoco’s commitment to safety and environmental protection? Me neither.
So, according to Chinese officials, Conoco’s negligence led to this “pollution accident.” But did the company redeem itself with a swift and effective response to the spills? Uh, not exactly. Consider this Sept. 5 Business Week coverage:
ConocoPhillips said it acted promptly to seal leaks at China’s biggest offshore oilfield, rejecting accusations of negligence by state media after a three-month battle to contain the spill off the northeast coast.
The U.S. company was ordered to halt output after “delays, negligence, cover-ups and cheating,” the People’s Daily, a newspaper controlled by the Communist Party, said yesterday. ConocoPhillips’s local unit is “facing the wrath of the Chinese public,” the Xinhua News Agency reported on Sept. 4.
The Xinhua report said the oil spills had spread to beaches in the provinces of Hebei and Liaoning and were being blamed for a slowdown in local tourism and for economic damage to aquatic farming industries.
Although Conoco claims to have acted appropriately, there appears to be plenty of evidence to the contrary. More from Business Week:
Chinese authorities ordered ConocoPhillips to halt production at Penglai on Sept. 2 after finding it hadn’t fully plugged the leaks. That undercut a report from the company to the regulator on Aug. 31 saying it had sealed off all sources of the spill.
Does that sound like the kind of corporate behavior our government should be rewarding with the highly lucrative rights to develop the first commercial well in the heart of America’s last frontier? Well, that’s exactly what’s happening folks. And as the Houston-based “supermajor” prepares to break ground over the coming months, ask yourself a question: Would you want the ConocoPhillips “family” moving in next door?
Read the full WSJ report here: http://online.wsj.com/article/SB10001424052970204791104577109000913271854.html?mod=WSJ_hp_LEFTWhatsNewsCollection
Read the AP report on Conoco’s negligence here: http://www.cbsnews.com/8301-505245_162-57322938/china-conocophillips-oil-spills-due-to-negligence/
Here’s the Business Week report: http://www.businessweek.com/news/2011-09-05/conoco-defends-china-spill-response-in-face-of-public-wrath.html
© Smith Stag, LLC 2011 – All Rights Reserved