Energy giant spent $7B to explore for oil off the shores of Alaska

Walrus cows and their calves in the Chukchi Sea. Photo by Brad Benter / U.S. Fish and Wildlife Service

Royal Dutch Shell is withdrawing from energy development off the coast of Alaska after tests failed to turn up signs of significant signs of oil and gas reserves.

Shell spent $7 billion on its exploration efforts in the Chukchi Sea. But after surviving a string of lawsuits filed by Alaska Natives and environmental groups and after clearing years of reviews by the Interior Department, the energy giant said it was ceasing operations "for the foreseeable future."

"Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US," Marvin Odum, the director of Shell Upstream Americas, said in a press release. "However, this is a clearly disappointing exploration outcome for this part of the basin.”

Many Alaska Natives oppose drilling in the Chukchi Sea. They are worried about the impact of development on whales, seals, polar bears and other subsistence foods.

But not everyone from the region was against Shell's efforts. Arctic Slope Regional Corp., an Alaska Native corporation, would have benefited financially from energy development in one of the most remote regions of the U.S.

"This is a major blow for Alaska, and leaves into question the viability of our state’s economy.” ASRC President and CEO Rex A. Rock Sr. said in a press release. "Closer to home on the North Slope, we are looking for solutions on how we continue to sustain our local economies to support our communities. Absent any responsible resource development onshore and offshore, we are facing a fiscal crisis beyond measure."

President Barack Obama visited the Arctic region during his historic trip to Alaska that ended earlier this month. Although his administration authorized Shell's exploratory work, he urged a shift away from oil and gas drilling in order to address the impacts of climate change.

Get the Story:
What Shell's decision on Arctic drilling means for the Alaska economy (Alaska Dispatch News 9/28)
Shell calls off its multibillion-dollar mission in Alaska's Arctic (Alaska Dispatch News 9/28)
The Latest: EarthJustice: Obama should end Arctic drilling (AP 9/28)
Shell’s departure will mean no drill rigs in Chukchi Sea (AP 9/29)
Alaska fears fallout of Shell’s Arctic drilling decision (AP 9/29)
Shell move dims oil prospects, delights environmentalists (AP 9/29)
Exuberance and Disappointment at Shell’s About-Face in the Arctic (The New York Times 9/29)
Shell Exits Arctic as Oil Slump Forces Industry to Retrench (The New York Times 9/29)

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