What is the financial impact of the oil spill from All American in the energy industry?
For the oil industry, it’s never a good time for an oil spill. An oil spill now, however, is really asking for it.
After years of haggling, Shell Oil— a subsidiary of Royal Dutch Shell— finally received conditional approval from President Barack Obama earlier this month to drill in the Arctic sea. Ideally, its movement from approval to drilling should have happened amid peace and calm, not the alarm raised by a significant oil spill. Unfortunately for them, this is what has happened.
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California has suffered a significant oil spill. This one took place along the coast of Santa Barbara, where a more than 9-mile long stretch of beach was contaminated with as many as 105,000 gallons— 2,500 barrels— of crude oil, according to Plains All American, the company responsible for the ruptured pipeline.
Plains All American Pipeline (NYSE: PAA) is a Houston, Texas based pipeline operator. As of yet, their stock price has not suffered in any significant way because of the spill, dropping only 3.09 percent. Business Review USA has valued its oil loss at roughly $160,525, based on Brent prices on the day of the spill.
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The impact of this latest spill on Shell’s efforts to explore is yet to be seen. Shell is already facing citizen resistance in Seattle. Activists have been protesting Shell's use of the Port of Seattle as a base of operations for exploration activity in the Alaskan Arctic, surrounding Shell’s drilling rig with kayaks and blocking roads to the Port of Seattle’s Terminal 5.
With public sentiment over drilling in the Arctic already starting to sour, especially with oil production on-land so quickly skyrocketing in recent years, this spill could become the straw that broke the camel’s back.
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In the meantime, according to KSBY.com the oil company Venoco has informed the City of Goleta, in Santa Barbara County, that it was shutting down some of its operations because of the oil spill at Refugio State Beach.
“Venoco said it had shut down Line 96 and Platform Holly as a safety precaution because of their connections to the Plains All American Pipeline,” reports KSBY.
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.