Shell Forced To Abandon Arctic Drilling Until 2013


Anglo-Dutch oil giant Royal Dutch Shell Plc has called off attempts to drill for oil in the Alaskan Arctic for this year at least, said the New York Times on Monday, after a spill containment dome was damaged during a recent testing accident.

The company had spent more than $4.5 billion over the last five years to obtain leases to drill for oil in the Chukchi and Beaufort Seas off the Alaskan coast, but they were unable to meet a September 24th deadline, which the U.S. government had imposed to accommodate the dangers of drilling in increasing ice and deteriorating weather in the environmentally sensitive region.

“The time required to repair the dome, along with steps we have taken to protect local whaling operations and to ensure the safety of operations from ice floe movement, have led us to revise our plans,” said a company statement, cited by the Washington Post.

“In order to lay a strong foundation for operations in 2013, we will forgo drilling into hydrocarbon zones this year.”

Marvin Odum, president of Shell Oil Co., Royal Dutch Shell's U.S. subsidiary, told The Associated Press however that though the company no longer had plans to drill for arctic oil this year, it still has made great strides with its exploratory wells off the Alaska coast.

"That drilling is going to be limited to top holes, but that is a tremendous step forward in terms of this multiyear exploration program in the Alaska Arctic," Odum said.

The U.S. federal government estimates that there are at least 26 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas in U.S. Arctic waters alone. Some energy analysts also believe that the entire Arctic region may contain up to 30 percent of the planet’s undiscovered natural gas reserves and around 13 percent of its undiscovered oil.

But environmental activists warn that the unpredictable conditions in the region meant that drilling there was an oil spill waiting to happen.

“This (the recent setback) reaffirms Shell was clearly not ready to drill this summer, and no matter how much the Obama administration was willing to lower the bar for them, they were not able to cross it,” said Brendan Cummings, senior counsel for the Center for Biological Diversity, to NYT.

“Shell spent nearly $5 billion to exploit global warming for profit this summer, but the Arctic is proving to be the company’s Waterloo,” added Greenpeace’s deputy campaigns director, Dan Howells, in a statement

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The New York-based environmental group Natural Resources Defense Council (NRDC) said the problems Shell has had highlighted the dangers of working in Arctic conditions.

"It's not safe to drill for oil in the Arctic – not now, not next month, not next year," the NRDC said.