Shell scraps controversial oil exploration in Alaska

Yet that long-term play is suddenly over – or at least on prolonged pause – after Shell announced Monday that several factors led it to abandon the project “for the foreseeable future“.

Many local environmental groups are celebrating the surprise news that Shell is cancelling its search for oil in the Arctic.

Finally, Martin Odum, Shell’s executive for the Alaska operations, said today (Sept. 28) that the company found indications of oil, but that it was insufficient to counterbalance a combination of the high costs and stiff usa regulation.

And Alaska Gov. Bill Walker, an Independent, said Royal Dutch Shell’s decision shows the state needs to drive its own destiny through oil and gas development.

Shell has said that it will stop drilling in the Arctic, causing celebration among environmental activists who had sought to stop the company from exploring for oil in the polar north through various protest actions. “Just think what the seven billion dollars Shell spent in the Arctic could have done for our climate and energy system if it had been invested in solar, wind and tidal power, rather than being wasted on looking for yet more oil”, he said.

A few drilling opponents are still concerned about the possibility of another company returning to pick up where Shell left off, especially as Arctic sea ice continues to recede. “They had a budget of billions, we had a movement of millions”.

But Shell said the well, in Alaska’s Chukchi Sea, was likely “to remain of strategic importance”. “For three years we faced them down, and the people won”, John Sauven, executive director at Greenpeace United Kingdom, told Reuters.

The probability that Canadian Beaufort resources will one day be exploited was already looking dicey.

“Typically when you bring a rig and spend that much money, you’ll drill multiple wells, and to be able to drill just the one, that was unfortunate”, Walker says. “If the oil price rises again and the well becomes economic, then it can try again”. “These large fossil fuel companies, such as Shell, are finding it financially and politically hard to expand their fossil fuel infrastructure”. Over the summer, protesters in kayaks unsuccessfully tried to block Arctic-bound Shell vessels in Seattle and Portland, Oregon.

Noting the President’s trip, Susan Murray of the green group Oceana observed: “Shell’s announcement today allows the government to take a step back and apply careful planning, precaution and science to forge a sustainable future for the Arctic”.

Shell’s shares were down 3 percent Monday in afternoon trading, in line with a broad market decline, to $45.89. The company’s retreat could bolster the White House to yank the sales included in its draft 2017-2022 leasing plan for area, Senner says. Shell officials had called the Chukchi basin “a potential game-changer”, a vast untapped reservoir that could add to America’s energy supply for 50 years.

Regions like the Arctic “are one of the areas that, if we’re going to be able to do this, we need to examine”, he said.

“This amount of wasted capital is something that Ceres and its investors have been warning Shell about for years now”, Shanna Cleveland, senior manager of the carbon assets risk initiative at the Boston-based sustainability group Ceres.