Watch to see if they keep the drilling licenses or sell them off to another play with more cash like ExxonMobil.
That being said, it's worth noting that Shell's exploration was offshore, in the Arctic Ocean, though the majority of current Alaskan production is onshore (or barely offshore) in Prudhoe Bay and the vicinity, mostly by BP with some collaboration with Exxon and Chevron. Onshore production is, all else equal, much less expensive because it's a lot easier. This is even more true in the Arctic where seasonal sea ice might make it impossible to set up a multiyear drilling platform like in the Gulf of Mexico, and drilling might have to be from ships instead of big floating rigs.
As far as I know, this won't impact North Slope (e.g. Prudhoe Bay or ANWR) production.
But you are right, oil is good for other things besides energy. Uranium and Thorium ain't really.
Plastics and inorganic fertilizers are two of the things we can make with oil. Both of these things are pretty damn important.
I suspect that -one day- burning so much of our oil supply just to produce electricity and locomotion will be regarded as a rather poor decision.
If you're desperate you can always squeeze a peanut or scrape a duck.
That sounds terribly expensive. A 1,000% increase in the cost of plastics and lubricants won't be fun for anyone.
> ...we can make by other means, if we have energy.
Hopefully we gather together the political will and launch the anti-misinformation campaigns required to get some form of very-high-capacity non-fossil-fuel-based electricity generation system long before we need to seriously consider "scraping ducks" to get the hydrocarbons we require.
(Running out of mineable phosphates is a separate "peak" issue)
http://www.forbes.com/sites/timworstall/2012/04/07/were-not-...
> ...natural gas is used to power the process and as an intermediate in ammonia production, but it's not intrinsic to the process.
Maybe I'm misreading the Forbes [0] article, but it says:
> We take methane (the majority part of natural gas) and use the CH4 to fix the nitrogen (N) from the air to make ammonia (NH3) which is then the precursor for the various fertilisers themselves like ammonium nitrate (NH4NO3) say.
That sounds to me like natural gas is -currently- a vital part of the production process, as well as a power generation fuel. That's -naturally- not to say that a different methane source couldn't be used.
[0] Unrelated: Forbes links are always fun. The first time I load an article, I am taken to a "welcome" page whose URL is not the article I intended to load. My back stack is also destroyed, so the back button doesn't work. If I visit the intended URL a second time, I get to read what it was that I wanted to read in the first place. Yaay.
http://www.rollingstone.com/politics/news/global-warmings-te...
If you want to know more about how realistic implementing substantive technological changes will be before we hit 500 ppm CO2 or some other benchmark, I submitted a link to a talk by Vaclav Smil, who is one of the world's experts on energy and society: https://news.ycombinator.com/item?id=10291516
At a given tax, the consumer and producer want the lowest production cost.
At fixed price to the consumer, the government wants the lowest production cost, so that the tax can be higher.
Fossil fuel producers may still compete with each other on cost but we shouldn't fool ourselves into thinking they're somehow benefiting society by doing that.
36 years isn't very long to develop the new energy technology, test it sufficiently, and build the infrastructure. Oil is the hardest to replace of all of our energy sources because it has the highest energy density and is therefore integral to transportation. Replacing coal with solar + nuclear would be a better option because both are based on stationary power plants instead of car engines and jet turbines. But in reality, if oil gets expensive now, we'll just start burning more coal because the pieces are already in place.
Like it or not (I definitely do not like it), we are a society very reliant upon fossil fuels, and if fossil fuel accessibility is restricted substantially (i.e. by completely stopping oil exploration) there will be considerable destabilization of society, which will do two particularly nasty things: 1) Harm the poor disproportionately, by making it difficult or impossible for the poor in developed nations to heat their houses and drive to work and school, and raising the cost of food substantially; and by completely stopping if not reversing the economic development of the rest of the world, keeping billions in poverty. 2) Wreak tremendous havoc on the environment, as the forests are cut down to provide wood for heating and cooking, and the fisheries and wild animal stock is razed due to high food prices.
There are no great solutions to the problem, but there are some that are much better than the current status quo of doing nothing, or the opposite end-member solution of enforcing an otherwise unlikely peak oil catastrophe by stopping exploration. Taxing carbon and using the proceeds to fund new energy technology as well as ramping up current alternative energy production both domestically and in India and Africa, and implementing more efficient transportation, heating and electricity generation could go a long way.
[1] 2012 levels, from Energy Revolution by Mara Prentiss [2] Energy Myths and Realities: Bringing Science to the Energy Policy Debate by Vaclav Smil [3] https://en.wikipedia.org/wiki/Oil_reserves [4] http://www.eia.gov/forecasts/steo/report/global_oil.cfm
From a purely economic perspective, it's a good move on their part.
"After mid-2014, the lion’s share of the decline in oil prices has been caused by negative oil-specific demand shocks and, to a lesser extent, by negative aggregate demand shocks. In contrast, the role of the oil supply (understood as the current physical availability of crude oil) has been small."
https://research.stlouisfed.org/publications/es/article/1034...