Published February 3, 2011
Shell today dropped its plans to drill exploratory oil wells off the coast of Alaska this year, but said it may ask the U.S. Interior Department to extend its leases in the Alaskan Arctic beyond 2015.
Royal Dutch Shell, Europe's largest oil company, was granted 10-year leases in 2005 to drill offshore in the Beaufort and Chukchi seas, but the oil giant was forced to forgo exploratory drilling this year after its federal clean-air permits for drilling rigs and support ships were revoked.
Federal Ruling Halts Plans for Offshore Oil Drilling in Arctic
Attorneys for Alaska natives and conservation groups in January successfully challenged the clean-air permits the Environmental Protection Agency had granted Shell for exploratory drilling off the coast of Alaska. The federal Environmental Appeals Board ruled that the EPA's analysis of the effect on native communities of nitrogen dioxide emissions from the ships used in offshore drilling was too limited. The board ordered the EPA to redo its evaluation.
“Shell’s announcement will protect the Arctic National Wildlife Refuge shoreline from potential damage,” Chuck Clusen, director of Alaska projects at the Natural Resources Defense Council, said in a statement today. “Now the government can proceed with full environmental impact statements on the company’s permit to drill.”
Shell's Long Path Toward Offshore Drilling in Arctic
Shell has been trying for five years to begin drilling offshore wells in the Alaskan Arctic, ever since it first won its leases in 2005. Regulatory issues have caused repeated delays, and the BP oil spill last April increased government scrutiny of all offshore drilling plans and permits. Drilling in Arctic waters poses not only the usual environmental and worker safety hazards of any offshore operation, but also the added risks and logistical challenges associated with the harsh climate, heavy seas and remote location.
“The bottom line is that there is no known way to clean up an oil spill in the Arctic’s conditions and too little is known about the Arctic’s marine environment,” said Cindy Shogan, executive director of the Alaska Wilderness League. “If there’s one lesson we’ve learned from the gulf spill, it’s that we can no longer rely on the oil industry’s shallow assurances. When it comes to the Arctic, there is too much at stake."
Arctic Offshore Drilling Delay is Temporary
Shell's decision to suspend its plans to drill offshore in the Alaskan Arctic is only a temporary reprieve for the region, however, because the company fully intends to push for new permits and to launch its offshore drilling operation in 2012—unless some new obstacle emerges.
Members of the Alaska congressional delegation weren't happy with the ruling, citing the 800 jobs Shell's operation was expected to bring to the region, but environmentalists were very pleased.
"Shell Oil's decision to abandon its proposal to drill in Alaska's Arctic seas this year is a victory for worker safety and the environment, said Athan Manuel, Sierra Club Lands Protection Program Director, in a statement. "The BP disaster in the Gulf of Mexico -- the largest oil spill in our nation's history -- is a stark reminder of the dangers that come with the risky business of drilling. In the uncharted and largely unknown conditions of the Arctic and with limited capacity to respond to spills in harsh conditions, the Arctic should not be an option for corporate polluters who are already reaping in massive profits. The cold truth is there is no way to clean up an Arctic spill.
"But the only real way to ensure we don't see another drilling disaster is to start reducing our dependence on oil now. We already have efficiency technology and clean energy solutions that will help move our nation beyond oil and make offshore drilling unnecessary."