Shell to cease further exploration in Alaska

Oil and gas companies from around the world were closely watching Shell’s pioneering efforts to see whether drilling would succeed in the remote and harsh environment off the northern coast of Alaska.

The oil company also said that the Chukchi Sea, where it holds rights to many oil exploration areas, “remains substantially under-explored” and has the potential to be “of strategic importance to Alaska and the U.S”.

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.

Shell announced today that it is retreating from its failed Arctic drilling programme.

U.S. Sen. Lisa Murkowski, a Republican from Alaska, placed the blame for Shell’s failure at the feet of the president.

Shell said it expects it will take financial charges related to the decision.

Environmental groups oppose Arctic offshore drilling and say industrial activity and more greenhouse gases will harm polar bears, walrus and ice seals. Vox predicts that this could lead to zero drilling off Alaska, period-at least for now-especially since Shell competitors have also backed out.

Fried said the “perception” that Shell’s departure will have a big impact on the state may have consequences down the road that are hard to calculate now. Jeff Merkley countered that Shell’s Arctic pullout is tremendous news, and a credit to the people who made clear that Arctic drilling in unacceptable. Shell’s share price has fallen by around a third over the past year as oil prices have fallen by half, to about $45 a barrel. They contend the risk of a major spill is too great to allow Arctic offshore drilling.

Shell is ceasing further exploration offshore Alaska after the company went bust on its Burger J prospect that will result in a multi billion dollar write-down. “On the other hand, in a $50 oil-price environment it’s not so bad to abandon that search because it’s expensive”.

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

“Today’s announcement marks a pivotal moment for the people and wildlife of the Arctic, and our climate”, said Friends of the Earth Climate Campaigner Marissa Knodel. “I imagine investors will be OK with a $1 billion hit versus tens of billions in the future”.

Reacting to the news, Greenpeace United Kingdom executive director John Sauven said: “Big oil has sustained an unmitigated defeat”. The company now has to move its drill rigs, support vessels, and more-some of which are being staged near Kotzebue-out of the Arctic.

But that collides head-on with the idea of a global carbon budget: to keep the planet’s warming below 3.6 degrees Fahrenheit – and a new study published Monday finds the world is on course for a 6-degree rise – just a fixed amount of fossil fuels can be burned.