Shell to abandon Arctic drilling efforts

Royal Dutch Shell announced Monday that it will abandon its plan to drill for oil and natural gas in the Arctic Ocean off the coast of Alaska.

The company had been exploring the Burger prospect of the Chukchi Sea for oil and natural gas. Its deadline for ending that effort for the season was Monday, and though the company said it found some reserves of oil, there isn’t enough there to undertake further expeditions. 

{mosads}”Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the U.S.,” Shell Upstream Americas Director Marvin Odum said in a statement. “However, this is a clearly disappointing exploration outcome for this part of the basin.”

Shell said its Alaska drilling campaign is worth about $3 billion. The company still holds leases for other drilling sites in the Chukchi, but it said it will “cease further exploration activity in offshore Alaska for the foreseeable future,” citing the limited amount of oil found in its exploration well, the high costs associated with drilling there and an unclear future for federal regulations. 

Sen. Lisa Murkowski (R-Alaska), the chairwoman of the Senate Energy and Natural Resources Committee, said she was “extremely disappointed” by Shell’s decision. She blamed tight federal regulations. 

“It is clear that the federal regulatory environment — uncertain, ever-changing, and continuing to deteriorate — was a significant factor in Shell’s decision,” she said in a statement.

Shell’s decision to drill in the Arctic — and the Obama administration’s approval of the project — was highly controversial, with green groups warning about the risks of an oil spill in the area’s fragile ecosystem calling for less fossil fuel development.

The groups cheered Shell’s decision to pull out of the region on Monday. 

“While this is a victory for everyone who hoped to avoid a catastrophic spill — or catastrophic climate change — from Shell’s plans, it’s also proof positive that drilling in the Arctic is too costly to be effective and a bad bet for other energy companies,” said Annie Leonard, the executive director of Greenpeace USA, which had led protests against Shell this summer. 

“Shell’s abandonment of drilling and cancellation of all exploratory activity in the Arctic is joyous news for our climate, communities along the Arctic Ocean, and the hundreds of thousands of people who have joined in public protests saying ‘Shell No’ to Arctic drilling,” Sierra Club Executive Director Michael Brune said. 

Many environmentalists had warned that the decision to open up the region for drilling — both Shell’s excursion there this year and in the government’s formal long-term plan for the region — would hurt President Obama’s environmental legacy. On Monday, they repeated their call for Obama to block future lease sales in the Arctic.

“Today, President Obama can also make history by canceling any future drilling and declaring the U.S. Arctic Ocean off limits to oil companies,” Leonard said. “There is no better time to keep fossil fuels like Arctic oil in the ground, bringing us one step closer to an energy revolution and sustainable future.”

Updated at 3:07 p.m.