U.S. Backs Away From Offshore Arctic Drilling

The Shell announcement Jewell is talking about is the oil giant’s decision last month to halt its Arctic drilling after accidents, delays, and $7 billion with nothing to show for it, the Times reports.

On Friday, the Interior Department referred to Shell’s efforts and said it was making its decision “in light of current market conditions and 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.

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 also rejected requests from Shell, and Statoil, a Norwegian oil and gas company, to extend their leases by five years. A few have already suspended operations in the Arctic due to harsh winter conditions and expensive drilling.

Former Maryland Governor Martin O’Malley claimed the plan to be great news.

“As we struggle with funding on education and costs of energy, I can’t tell you how disappointed I am in this decision”, he said. The agency said it received no industry interest in a Chukchi Sea lease sale scheduled for next year and one response to its call for nominations for a Beaufort Sea lease sale that was to be held in 2017.

Young says the state should just start drilling in offshore waters it controls and within 200 yards of the Arctic National Wildlife Refuge. Among other things, the companies did not demonstrate a reasonable schedule of work for exploration and development under the leases, a regulatory requirement necessary for BSEE to grant a suspension.

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”.

While environmentalists hailed the decision, many Alaskans were angry. Michael LeVine, of Oceana, said given the challenges of working safely in the Arctic and the lack of exploration happening now, “There is no reason to extend existing leases, and no reason to sell new leases”. Those same groups applauded Friday’s move, with the Natural Resources Defense Council calling it “an essential reprieve” for Arctic Waters.