Shell Digs Deep To Tap Into Lucrative Oil, Gas Reserves

Royal Dutch Shell is pushing ahead with plans for the world's deepest offshore oil and gas production facility. It will be nearly two miles beneath the surface of the Gulf of Mexico, off the coast of Louisiana. It is testing the bounds of the oil and gas industry's capability to drill ever deeper.

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One reason the world is not yet running out of oil and gas is that energy companies keep finding ways to extract those resources from more and more difficult places, including far under the ocean. Royal Dutch Shell announced plans, yesterday, for the world's deepest offshore floating oil and gas facility.

NPR's Debbie Elliott reports.

DEBBIE ELLIOTT, BYLINE: Shell calls its ultra-deepwater project a milestone. It will be nearly two miles beneath the surface of the Gulf of Mexico, off Louisiana, testing the bounds of the oil and gas industry's capability to drill ever deeper.

Lauren Payne is an analyst with the energy research firm Wood Mackenzie.

LAUREN PAYNE: This decision represents the industry's history of moving the technological frontier forward.

ELLIOTT: The Shell facility will be further offshore, and about twice as deep as BP's disastrous well that blew three years ago. It took months to quell that undersea gusher, in part because of the inherent difficulties and risks associated with drilling for oil so deep under the sea.

Still, deepwater exploration has picked up since the Obama administration lifted a moratorium imposed in the wake of the BP disaster.

Payne says there are about three dozen deepwater rigs operating in the Gulf right now, and she expects even more.

PAYNE: You see continued investment in these parts of the Gulf of Mexico because there is an understanding that there is a lot of potential in that area.

ELLIOTT: Shell's announcement comes as industry leaders are in Houston for the Offshore Technology Conference - a showcase that includes drilling safety innovations.

Debbie Elliott, NPR News.

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