US cancels Arctic offshore lease sale after Shell drops interest

Last month, following months of exploratory drilling Shell in the Arctic’s Chukchi Sea for much of the summer, the company said it was abandoning its efforts in the Arctic “for the foreseeable future” due to challenging economic conditions, including consistently low oil prices, and disappointing results from drilling.

Alaska projects oil to account for about 75 percent of the revenue generated in the state for fiscal 2015 – down from 88 percent the previous year – and state politicians immediately criticized the decision to cancel the lease sales.

The Department of the Interior canceled two auctions for drilling leases in the Chukchi and Beaufort seas. At least nine companies already hold more than 500 active leases in USA portions of the Arctic Ocean.

Not only will the Interior Department be canceling new lease sales, they also will not be extending Shell’s lease for exploration in the region, which was set to expire in 2020.

In a statement, Sally Jewel said that in light of Shell’s announcement regarding amount of acreage under lease and poor market conditions, it does not makes sense for making lease sales in future.

The United States government has declared new reins on gas and oil exploration off Alaska’s northern shore. “Let’s get rid of the poorly planned and justified decisions to sell leases in the 2000s, and the unwise investments made by companies”.

“Any action that limits our ability to explore for more oil – to increase much-needed oil production through the Trans-Alaska Oil Pipeline – creates unnecessary uncertainty and burden on our economy”, he said in a statement. “This is a huge win for Arctic wildlife and our climate”, said Miyoko Sakashita from the Center for Biological Diversity.

All of the Republican candidates in 2016’s presidential campaign were in favor of Arctic drilling.

He defended the move ahead of his trip to Alaska, saying he shared people’s concerns about offshore drilling but that his administration, in the wake of the BP spill in the Gulf of Mexico, had worked to make sure that oil exploration was done at the “highest standards possible”. Walker said the Interior Department’s decision left him with a “loss of hope, in a few respects” about accomplishing that. It can’t stop here though: “It’s time to take the next step and pledge to keep this oil in the ground and transition quickly to energy sources that are safer, smarter and better for all of us”.

But Democratic Sen. Jeff Merkley of Oregon said the decision was a victory for the millions of Americans who raised their voices against Arctic offshore drilling.