{"id":24087,"date":"2016-05-10T19:27:43","date_gmt":"2016-05-11T02:27:43","guid":{"rendered":"http:\/\/spijue.wpengine.com\/news\/shell-relinquishes-offshore-leases-in-chukchi-sea\/"},"modified":"2016-05-10T19:27:43","modified_gmt":"2016-05-11T02:27:43","slug":"shell-relinquishes-offshore-leases-in-chukchi-sea","status":"publish","type":"post","link":"https:\/\/www.juneauempire.com\/news\/shell-relinquishes-offshore-leases-in-chukchi-sea\/","title":{"rendered":"Shell relinquishes offshore leases in Chukchi Sea"},"content":{"rendered":"

ANCHORAGE \u2014<\/strong> The only company to drill an exploratory oil well in Alaska\u2019s Chukchi Sea following a 2008 federal lease sale confirmed Tuesday it has relinquished nearly all of its leases.<\/p>\n

Royal Dutch Shell PLC formally relinquished all but one of its leases in the waters off Alaska\u2019s northwest coast, spokesman Curtis Smith said Tuesday.<\/p>\n

The news was not a complete surprise. An exploratory well drilled in 2015 did not find commercial quantities of oil. Shell announced in September it was suspending exploration in Alaska waters.<\/p>\n

The decision also reflects the high cost of drilling off Alaska, Smith said by email.<\/p>\n

\u201cWhile we support regulations that enforce high safety and environmental standards, the unpredictable federal regulatory environment for the Alaska Outer Continental Shelf also made it difficult to operate efficiently,\u201d he said.<\/p>\n

Shell will retain the lease for the site on which it drilled its exploratory well.<\/p>\n

\u201cWe are holding onto it because we believe there is value in the data gathered during our exploration efforts there,\u201d Smith said.<\/p>\n

The company will separately evaluate its leases in the Beaufort Sea off Alaska\u2019s north coast, Smith said.<\/p>\n

Shell spent $2.1 billion on 275 Chukchi Sea leases in 2008 and $7 billion overall on Arctic offshore development. Shell officials had called drilling there \u201ca potential game-changer,\u201d a vast untapped reservoir that could add to America\u2019s energy supply for 50 years. The U.S. Geological Survey estimates 26 billion barrels of conventionally recoverable oil in U.S. Arctic waters.<\/p>\n

But Arctic drilling is fiercely opposed by environmental groups, which said a major spill would devastate habitat of whales, ice seals and polar bears.<\/p>\n

The challenges of Arctic drilling were evident after the 2012 season when a Shell drilling vessel, the Kulluk, broke loose from its tow vessel in a fierce Gulf of Alaska storm and ran aground near Kodiak Island.<\/p>\n

Shell faced stiff regulatory oversight, including a requirement for two rigs in a drilling area in case one was damaged in a blowout.<\/p>\n

After Shell announced it was suspending exploration, the Interior Department said it would not extend Shell leases when they expired in 2020. Shell initially said lease terms should be extended. By relinquishing the leases, the company avoids millions in annual payments.<\/p>\n

A drilling opponent, Oceana, filed a freedom of information request and learned leases had been formally relinquished by Shell, ConocoPhillips, Eni and Iona Energy. The environmental group announced its findings Monday night and applauded the decision.<\/p>\n

\u201cHopefully, today marks the end of the ecologically and economically risky push to drill in the Arctic Ocean,\u201d said Mike LeVine, an attorney with the group.<\/p>\n

ConocoPhillips Alaska spokeswoman Natalie Lowman said Tuesday the company already had \u201ctaken an impairment,\u201d or written off, the Chukchi leases in its 2015 annual report.<\/p>\n

\u201cGiven the current environment, the prospects in the Chukchi aren\u2019t competitive,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"

ANCHORAGE \u2014 The only company to drill an exploratory oil well in Alaska\u2019s Chukchi Sea following a 2008 federal lease sale confirmed Tuesday it has relinquished nearly all of its leases. Royal Dutch Shell PLC formally relinquished all but one of its leases in the waters off Alaska\u2019s northwest coast, spokesman Curtis Smith said Tuesday. […]<\/p>\n","protected":false},"author":107,"featured_media":24088,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[230],"yst_prominent_words":[],"class_list":["post-24087","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-state-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/24087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/107"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=24087"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/24087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media\/24088"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=24087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=24087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=24087"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=24087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}