Shell Oil Abandons Controversial Drilling Off Alaska's Shore

Citing a lack of enough oil to make the project worthwhile, Royal Dutch Shell Oil is halting its effort to drill for oil off Alaska's shore "for the foreseeable future." The company has spent some $7 billion on the exploration project.

Shell announced the move late Sunday, describing what the company called "a clearly disappointing exploration outcome" in the Chukchi Sea, which is part of the Arctic Ocean. The project, which had been halted in 2012 over safety concerns, was resumed this year after getting federal approval in May.

From Alaska Public Media, Rachel Waldholz reports:

"Shell was able to drill just one exploratory well this summer, off Alaska's northern coast. And the results were disappointing. In a statement the company reported that it had 'found indications of oil and gas' — but not enough to continue exploration at the site.

"The company said the decision to end offshore exploration in Alaska reflected those results and the project's high costs — but also what it called a 'challenging and unpredictable federal regulatory environment.'

"The project had drawn major protests from environmental groups, who worried drilling would impact marine mammals and that an oil spill in the arctic would be impossible to clean up.

"The announcement came the day before a key deadline — Shell had to be out of oil-bearing rocks by Monday, Sept 28. The company must now move its two drilling rigs and dozens of support vessels out of the Arctic before winter sea ice returns."

In its statement, Shell says that the Burger J well, which had been drilled to a depth of 6,800 feet, will now be sealed and abandoned.

The oil company also said that the Chukchi Sea, where it holds rights to many oil exploration areas, "remains substantially under-explored" and has the potential to be "of strategic importance to Alaska and the U.S."