Obama cancels Arctic drilling leases

The decision comes from the US Department of the Interior, which said new lease sales that had been scheduled for the next two years will be canceled. The company sunk $7 billion into its Arctic quest and effectively came up dry – a sum that other firms would be unlikely to tolerate as the time on their leases tick down and amid a 16-month slump in oil prices.

In May, the Obama administration, citing “rigorous safety standards” and a long review process, had granted conditional approval to energy giant Shell to begin its drilling in the Arctic waters off the coast of Alaska.

The Obama administration in January proposed its offshore plan for 2017-2022, curbing exploration in the Beaufort and Chukchi seas while opening part of the Atlantic region to drilling.

“President Obama now has the opportunity to end oil and gas drilling in the Arctic Ocean permanently and invest in a cleaner energy future”.

“We congratulate the Interior Department on taking these two important steps toward protection of the Arctic Ocean from the threats of drilling in this fragile ecosystem which is experiencing the effects of climate change at a faster rate than anywhere else on earth”, said Erik Grafe, an attorney with Earthjustice, which had been sparring with the administration and will Shell over Arctic drilling. They say industrial activity will harm marine mammals already hurt by a loss of sea ice, and global warming would be accelerated by burning oil found in the Arctic Ocean.

“The government’s actions are consistent with the law, good public policy and economic realities”, he said.

Walker said Friday the decision from Interior Secretary Sally Jewell “pretty much shut down offshore” drilling, leaving onshore drilling as the only option in Alaska.

Shell was the only company of seven with Arctic drilling rights to take a shot at pulling oil from the Chukchi Sea. Today’s announcement moves us away from old arguments about companies’ unwise investments and toward better choices for the Arctic Ocean. Norway’s Statoil had also requested an extension of a lease expiring in 2017 in the nearby Beaufort Sea, which was also rejected.

And Shell and Statoil’s plans didn’t rise to what the Interior Department thought was needed to suspend their leases, the agency told both companies in letters Friday.

In a hastily organized news conference at the Alaska Federation of Natives convention in Anchorage, Gov. Bill Walker and the three members of the state’s all-Republican congressional delegation took turns criticizing the cancellation and the Obama administration.

On 28 September, Shell announced that the results of its exploration well at the Burger J site in the Chukchi Sea did not warrant further exploration in the Burger prospect and that it would abandon its exploration plans.

Sen. Lisa Murkowski, R-Alaska, has advanced legislation that would empower the Interior secretary to extend the initial term of federal leases in the Chukchi and Beaufort seas to 20 years – effectively creating a longer-term alternative to the temporary suspensions of operation and production allowed in limited circumstances today.