That was quick.
Just five months after oil company Shell was granted permission to drill oil wells off the Alaskan coast, it is shutting down drilling operations in the area. One of the main catalysts for the decision was the fact that the exploratory well they drilled (called Burger J) failed to yield a significant amount of oil.
In a press release, Shell cited several reasons for the decision: “Shell will now cease further exploration activity in offshore Alaska for the foreseeable future. This decision reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.”
The initial plan to drill in sensitive waters was met with considerable environmental protests. But now, worry has turned to jubilation.
“Shell’s announcement is very good news for the marine environment, sensitive coastal lands and the Arctic communities that would be devastated by a major oil spill.” Lois Epstein, Arctic Program director for the Wilderness Society said in a statement. “Hopefully, this means that we are done with oil companies gambling with the Arctic Ocean, and we can celebrate the news that the Arctic Ocean will be safe for the foreseeable future.”
How long the “foreseeable future” will last is up for debate. Shell is losing a lot of money by backing out of the Arctic. The company had invested over $4.1 billion in the Alaska project ($3 billion already committed, and $1.1 billion promised to contractors for future work). The company will certainly try to reclaim some of those losses, but it remains to be seen whether other companies or countries will continue to push for oil exploration in the still-unexplored Arctic after such a disappointing result.