DOI Dials Back Arctic Drilling Due To Low Industry Interest

The company’s exploratory well found oil and gas but not in quantities that justified the huge expense of Arctic drilling, where Shell backed up its rigs with a flotilla of support and safety vessels and made regular helicopter flights from a staging area 150 miles away in Barrow, the country’s northernmost community.

In light of current market conditions and low industry interest, the U.S. Department of the Interior announced Friday that it will cancel the two potential Arctic offshore lease sales scheduled under the current five-year offshore oil and gas leasing program for 2012-2017.

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”.

Just about all the leases in the Beaufort Sea are set to expire in 2017, while leases in the Chukchi Sea are set to expire in 2020.

Shell is also concerned with the decision, in particular the impact it will have on their ability to make new explorations in Arctic waters, should they choose to do so.

Moving on may be what at least a few of those companies choose to do.

Shell spokesman Curtis Smith said the company disagrees with the agency’s decision not to extend current leases.

The move represented a second major setback to Arctic oil drilling plans that as recently as two months ago seemed to be moving forward smoothly.

“When it comes to frontier exploration in Alaska, one size does not fit all”, Smith said by email.

Interior, which also decided against extending existing Arctic lease terms on properties controlled by Shell and Norway’s Statoil, said the decision was an economic one.

ASRC is an investor in Shell’s project, and Patkotak said the decision has a direct impact on the regional corporation.

“This is great for the Arctic and its polar bears”, said Miyoko Sakashita of the Center for Biological Diversity to AP.

Shell’s Arctic fleet became a lightning rod for activism in Seattle this summer, launched by flotillas of “Kayaktivists” and others opposed to drilling. To avoid climate catastrophe, Arctic oil and gas are unburnable and must remain in the ground.

Sullivan says these oil jobs are real and significant “opportunities that could benefit thousands if not tens of thousands of Alaskans”.

The longest-serving Republican in the U.S. House is suggesting Alaska officials take a more aggressive stance with drilling. It said it could finish quest off Alaska “for the near future”. “They’ll do anything to stop it. I don’t think they have a legal leg to stand on”.