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Shell Abandons Arctic Drilling Following 'Disappointing' Results

Energy

After finding little oil and natural gas, Royal Dutch Shell announced today it would end its controversial Arctic drilling operations in the Chukchi Sea off Alaska's coast "for the foreseeable future." Shell said the amount of oil and gas found in the Burger J well is "not sufficient to warrant further exploration."

The well will be sealed and abandoned in accordance with U.S. regulations, the company said. The oil giant is also making efforts to safely demobilize people and equipment from the Chukchi Sea.

"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.," said Marvin Odum, the director of Shell Upstream Americas. "However, this is a clearly disappointing exploration outcome for this part of the basin."

Shell said its decision to cease drilling was also based on the "high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska."

According to the Associated Press, Shell spent more than $7 billion on Arctic offshore exploration. The company said it expects to lose approximately $4.1 billion as a result of ceasing operations.

There are a number of reasons why the search for Arctic oil is not worth the risk. Oil prices have been sinking around the globe at less than $50 a barrel. Even former BP boss Lord Browne said Arctic drilling was not a supporter due to cost, safety and environmental risks.

Of course, there are many planetary reasons why we must never drill our pristine and treasured Arctic, including its strain on wildlife, carbon pollution, spills, rising sea levels and much more. Shell's decision to stop explorations in the Arctic was hailed by environmental organizations, including Greenpeace, who has actively protested the risky operations.

“This is a victory for everyone who has stood up for the Arctic," said Greenpeace USA Executive Director Annie Leonard. "Whether they took to kayaks or canoes, rappelled from bridges, or spread the news in their own communities, millions of people around the world have taken action against Arctic drilling. Today they have made history."

Leonard also called on President Obama to cease any future drilling and declaring the U.S. Arctic Ocean off limits to oil companies.

"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," she noted. "It’s time to start making the shift to renewable energy instead of pursuing extreme fossil fuels."

Greenpeace International Executive Director Kumi Naidoo echoed similar sentiments.

“It’s time to make the Arctic ocean off limits to all oil companies," Naidoo said. "This may be the best chance we get to create permanent protection for the Arctic and make the switch to renewable energy instead. If we are serious about dealing with climate change we will need to completely change our current way of thinking. Drilling in the melting Arctic is not compatible with this shift."

“Greenpeace’s campaign to save the Arctic will continue with passion and increased strength. We are campaigning for a protected sanctuary in international waters around the North Pole, and we hope that vision is one step closer after today,” Naidoo said.

Other environmentalists have also spoken out. “Those working to protect the communities and wildlife throughout America's Arctic can rest a bit easier tonight knowing that the immediate threat of disastrous offshore oil spills has diminished," Brad Ack, the senior vice president for oceans at the World Wildlife Fund said. "The Arctic Ocean once again proved to be the challenging and unpredictable environment we know it to be."

“We must stop expending resources and time seeking to exploit fossil fuels from the most hostile and remote places on the planet and risking irreversible environmental damage," he added. "We need to redirect that energy to accelerate our nation’s transition to a future powered by clean, renewable energy.”

"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. "As one of the largest corporations to pursue Arctic oil and gas, Shell’s retreat from a $7 billion gamble sends an important message: Arctic drilling is too dangerous and too expensive and should be stopped altogether.

"Arctic oil and gas is unburnable in our carbon-constrained world and must be kept in the ground. With this announcement, President Obama’s climate legacy has been given a reprieve. He should seize this opportunity to revoke Shell’s drilling permit and cancel all future leases in the Arctic Ocean."

Miyoko Sakashita, oceans program director for the Center for Biological Diversity, told the Associated Press, "Polar bears, Alaska's Arctic and our climate just caught a huge break. Here's hoping Shell leaves the Arctic forever."

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