Skip to main content

Shell Drops Drilling Plans in Beaufort and Chukchi Seas This Year

  • Author:
  • Updated:

Alaska Natives and conservation groups succeeded in their mission to prevent Shell Oil from drilling an exploratory well in the Alaskan Arctic waters of the Beaufort and Chukchi seas this year, reported the Los Angeles Times.

Many of the region's nearby villagers disputed the clean-air permits granted by the Environmental Protection Agency, which lead the agency to revoke the petroleum company's application.

On Thursday, Shell officially announced that it will forgo its planned exploratory drilling in 2011. Shell Alaska Vice President Pete Slaiby blamed the decision on "continuous regulatory delays," not mentioning parties who petitioned to the EPA against approval of its clean-air permit, reported the Times.

The Wall Street Journal states that while Shell canceled plans to pursue offshore drilling in Alaska this year, it is already looking to 2012. The oil giant expects, despite delays, it will obtain the permits to proceed, a company executive said Thursday, reported the Journal.

Among a number of protests, Alaska Native groups emphasize that oil companies have yet to demonstrate capability of cleaning up a spill in ice-laden waters, reported BusinessWeek. Native villagers also question how the oil company would protect wildlife and habitat and clean up a massive spill given the remote location of drilling sites, the area's extreme weather and the lack of infrastructure, BusinessWeek reported.

In total, Shell has invested about $3.5 billion in drilling the Arctic outer continental shelf--of that amount, Alaska Natives and environmental groups have challenged $2.2 billion in leases, reported BusinessWeek.

Following Shell's announcement, Congressman Don Young (R-Alaska) released a statement complaining that continual regulatory delays are impeding economic development.

“Shell has spent more than $3 billion and been ready to put Alaskans to work for the last few years but because of an inefficient bureaucracy and an overabundance of unnecessary regulations, they STILL have not been able to drill a single hole," Young states, according to a government press release. "We are making it near impossible for companies to do business in the US; where’s the incentive? It is absurd and foolish and completely indicative of an Administration that has no interest in responsible resource development or a thriving economy."

Young had previously advocated removing barriers and federal regulations such as the Endangered Species Act that prevented tribal energy development. Young objected to the long Interior approval process, which he says deters potential business investment. Apparently, he puts development advancement and job creation at the forefront, whether it pertains to Alaska Native interests or oil conglomerates.

"All we hear about from the Obama Administration is ‘jobs jobs jobs’ but all we’re getting is lip service. Considering how any attempt at project development is shut down by the EPA, they sure aren’t interested in jobs for Alaskans! The way this country is being crippled is infuriating. They won’t be happy until we’ve run all business out of the country and we’re back to traveling on dirt roads in covered wagons,” Rep. Young stated.