Obama Administration Blocks Prospects for Future Oil Drilling in the Arctic

Interior Department cancels two future offshore leases in Chukchi and Beaufort seas and will refuse requests from oil companies to renew existing leases

By Suzanne Goldenberg

Barack Obama blocked off the prospects for future oil drilling in the Arctic on Friday, imposing new lease conditions that make it practically impossible for companies to hunt for oil in the world’s last great wilderness.

Photo of Arctic DrillingPhoto by Coast Guard News Coast Guard crews escorting Blue Marlin to Port Angeles, Washington.

The Department of Interior said it was canceling two future auctions of Arctic offshore oil leases in the Chukchi and Beaufort seas, and turned down requests from Shell and other oil companies for more time on their existing leases.

The decision will come as a further blow to Shell, which invested seven years and $7 million trying to find oil in the Arctic but came up dry. The company last month walked away from its Arctic drilling, citing the “disappointing” results and regulatory uncertainty.

But it was a victory for the efforts of “kayaktivists” and other climate campaigners to put the Arctic off limits to oil exploration — and keep the lid on vast carbon reserves that cannot be burned without triggering catastrophic climate change.

The US Geological Society has estimated that the Arctic holds up to 13 percent of the world’s undiscovered oil reserves — a fossil fuel bonanza that is being brought closer to reach because of the melting of the summer ice cover, due to climate change.

Sally Jewell, the interior secretary, said the decision to cancel auctions scheduled for 2016 and 2017 was dictated by current economies for oil, and the harsh conditions of hunting for oil in the Arctic that had forced Shell to pull out.

“In light of Shell’s announcement the amount of acreage already under lease and current market conditions, it does not make sense to prepare for lease sales in the Arctic in the next year and a half,” she said in a statement.

Jewell added that the Interior Department would not be renewing existing oil leases held by companies such as Shell and Statoil beyond the current expiration date of 2020.

Campaign groups said the moves would make it much harder for oil companies to return to the Arctic in the near future, but they did not seal off the prospects for drilling at a future point. Seven companies including Shell currently hold drilling rights in the Chukchi sea.

“These are great steps in the right direction, but it is not the end of Arctic drilling forever,” Michael LeVine, Arctic campaigner for Oceana, said. “It is very likely that these companies will not be able to explore the leases they currently own. So the right thing to do would be to wipe the slate clean, and let these leases go.”

Greenpeace, which had organized flotillas of protesters off Shell’s drill ship in Seattle, said it was raising its paddles in salute to Obama.

“This is a historic decision to keep Arctic oil in the ground that will be felt for years to come. It’s great news for the Arctic and for everyone fighting against extreme fossil fuel projects,” Travis Nichols, a spokesman, said in a statement.

However, industry analysts said the decision had been forced by current regulations governing oil leases.

The companies are entitled to appeal the decision, and stop the clock on their leases — or wait for a new administration.

Republicans in Congress, such as Lisa Murkowski of Alaska, have also said they will try to extend the life of drilling leases.

Obama faced an uproar from fellow Democrats and environmental campaigners when he gave Shell the go-ahead to return to the Arctic to hunt for oil. The president was forced to defend his decision during a historic trip to Alaska last August, which the White House planned to showcase the effects of warming on the Arctic.

The leading Democratic contenders for president have also come out against Arctic drilling.

 

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