Shell Suspends Drilling in Arctic

After spending upwards of $7 billion on oil exploration in the Arctic, Royal Dutch Shell will cease further exploration activity offshore in Alaska for the foreseeable future, the company announced Sept. 27.

Marvin Odum, director of Shell Upstream Americas, said while Shell found indications of oil and gas in the Burger J well, drilled to a total depth of 6,800 feet this summer, that this was not sufficient to warrant further exploration into the Burger prospect, so the well will be sealed and abandoned.

Odum said Shell still sees important exploration potential in the basin, but for now will cease further exploration activity in offshore Alaska for the foreseeable future.

This decision, Shell said in a statement, “reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.

Alaska Senators Lisa Murkowski, and Dan Sullivan, both Republicans, were among those expressing disappointment with the decision. “What we have here is a case in which a company’s commercial efforts could not overcome a burdensome and often contradictory regulatory environment,” Murkowski said.

Arctic Slope Regional Corp. an Alaska Native regional firm at Barrow, also expressed concern, as the company had been a partner in the offshore development.

Alaska Gov. Bill Walker called the decision a huge disappointment, and that he had been very optimistic about what Shell was going to find.

Walker planned to meet with Interior Secretary Sally Jewell on working with the Obama administration to see that Shell’s leases are extended.

Environmental entities, who had opposed the offshore drilling out of concerns that there would be no way to clean up potential oil spills, said they were happy with Shell’s decision.

“It means for the foreseeable future there won’t be a threat of major spills affecting the marine environment’s sensitive coastal areas and the Arctic residents who rely on the ocean for subsistence, said Lois Epstein, Arctic program director for the Wilderness Society.

Oceana also applauded the decision.

“As President Obama saw first-hand, there are many challenges in the Arctic region, and we can use this opportunity to address changing climate and the need to protect and conserve important ocean resources,” said Susan Murray, Oceana’s deputy vice president. “Shell’s announcement allows the government to take a step back to apply careful planning, precaution and science to forge a sustainable future for the Arctic.”

Shell’s decision to drill offshore in the Arctic sparked a number of protests earlier this year, in Alaska, Washington and Oregon.