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Shell backs off Arctic drilling

beaufort.jpgShell has pulled back its plans for drilling in the Arctic, but insists this does not mean the end of this controversial oil exploration.

In the face of huge opposition from environmentalists and native groups, the company has withdrawn its plans for drilling in Beaufort Sea in the 2007-2009 period and says it will be back with a more modest proposal for 2010.

“Over the last three years, Shell’s Beaufort Sea drilling objectives have become more focused with the acquisition and analysis of additional seismic data,” says Pete Slaiby, Shell Alaska’s general manager (statement pdf, via KTVA). “As a result, the 2007-2009 plan no longer represents Shell’s current drilling approach.”

The NY Times Green Inc blog says the decision will be seen as a “costly setback” for the company, which spent $2.1 billion to obtain oil leases in the Beaufort and Chukchi seas. However, the Financial Times Energy Source blog says:

The move is really only a formal acceptance of a position that was generally understood already: drilling this year was going to be too difficult. Shell insists, however, that this is a setback, not a defeat. In the Arctic, one of the last great frontiers for oil and gas exploration, it is playing the long game.

Last month a court ruled that the leases granted to oil companies in the Chukchi were invalid, as the US Minerals Management Service had failed to do proper environmental checks before issuing them. Slaiby said then that Shell still had “every intention of pursuing a drilling program in the Beaufort and the Chukchi” (Reuters).

Image: Beaufort Sea, by Kevin Raskoff / NOAA


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    Gary Richey said:

    true! not all drilling is bad. It does depend on the location and also the materials used.

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