Shell, Statoil and ConocoPhillips had asked Interior regulators to issue “suspensions” of their Arctic leases – effectively stopping the clock from ticking on their 10-year terms. Those leases are set to expire in 2017 and 2020.
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The Interior Department announced Friday, October 16, it is canceling future lease sales and will not extended current leases in Arctic waters off Alaska’s northern coast, a decision that significantly reduces the chances for future Arctic offshore drilling.
Late last month, Shell abandoned its multibillion-dollar effort to drill in the Chukchi Sea.
The lease sales were scheduled for 2016 and 2017 in the Chukchi and Beaufort Seas, respectively. But the Interior Department said calls for nominations came up short – none for the Chukchi Sea Lease Sale 237 in 2013, and only one prospect for the Beaufort Sea Lease Sale 242 in 2014. On 19 August, The Western Gulf of Mexico Lease Sale 246 attracted only US$22.7 million in bids. The Obama administration thought the companies didn’t provide sufficient plans for work and exploration needed to suspend their leases. It had applied to extend leases in both the Chukchi and the Beaufort.
He says, “We know where the oil is, we just don’t have access to it”.
The Interior Department made the announcement today, surprising Alaska political leaders attending the Alaska Federation of Natives conference in Anchorage.
“It’s more of the same”, said Sen.
“This is a stunning, short-sighted move that betrays the Interior Department’s commitments to Alaska and the best interests of our nation’s long-term energy security”, she said.
Walker and the congressional delegation then huddled for a quick discussion after the news conference, at which Young could be overheard saying that the Obama administration would only respond to “physical action”.
“Our industry’s strong interest in developing our country’s vast offshore oil and natural gas resources in Alaska was undermined years ago when the administration began implementing a system of regulatory and permitting unpredictability and uncertainty”. Statoil, an oil and gas company based in Norway, requested an extension for Chukchi leases. “Instead of throwing a lifeline to the State, they throw us a cinder block”, he said in a statement.
The decisions ensure a long chill on oil development in U.S. Arctic waters and deal another blow to Alaska, which heavily depends on energy revenue and is still reeling from Shell’s pullout.
Murkowski said she will continue to push legislation requiring regular lease sales in the offshore Arctic.
“The Obama administration finally made the right choice for the Arctic and our climate future”.
In bullet points laid out over a 9-page response, Mark Fesmire, director of the bureau’s Alaska region, said Shell’s allegations of unreasonable, unforeseen delays were unfounded.
Environmental groups strongly oppose drilling.
Alaska’s Governor Walker responded to the DOI announcement via press release saying, “I am disappointed by this announcement”.
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Environmentalists, meanwhile, lauded the news. They also said burning Arctic Ocean oil would accelerate global warming.
