Shell Oil Company has temporarily halted plans to pursue further drilling in the Arctic after a ruling by a Ninth Circuit Court of Appeals. Last week, the court ruled that the Interior Department’s environmental review for Bush-era lease sales for drilling in the Arctic Ocean is unsound. Shell is the only company that has begun drilling in the Arctic, resulting in a series of costly errors and accidents.
According to Law360, Shell has shelved drilling plans for 2014 due to the “substantial obstacles” created by the court’s ruling. On Thursday, Shell’s new CEO, Ben van Beurden, told investors that the company faces a “changing operational landscape” in part due to legal issues related to its drilling plans in the Chukchi Sea.
“This is a disappointing outcome, but the lack of a clear path forward means that I am not prepared to commit further resources for drilling in Alaska in 2014,” van Beurden said.
Shell had been pushing to resume drilling this year and submitted a revised Chukchi Sea exploration plan to the Interior Department in November. In 2013, the company took a “pause” in its Arctic drilling efforts due to issues with its 2012 expedition in which two drill ships suffered serious damage.
Greenpeace Arctic Campaign Leader Gustavo Ampugnani called Shell’s 2012 expedition a “perilous Arctic folly.”
“As the whole world watched, their bold Arctic expedition in 2012 became a global laughing stock as giant rigs broke free from their moorings and beached on Alaskan shores, dire storm warnings were ignored, and multiple health, safety and environmental regulations were breached,” Ampugnani said in a press release.
Shell’s temporary drilling halt this year is a victory for the coalition that challenged the approval of Lease Sale 193, which leased millions of acres of Arctic Ocean to oil companies. The lease sale was originally held during the Bush administration era and was reaffirmed by the Obama administration in 2012, despite a 2010 ruling by the Alaska Federal District Court that the sale violated the National Environmental Protection Act.
“Shell’s decision today means America’s Arctic waters are safe from big oil for another summer,” Erik Grafe, an attorney for Earthjustice, said in a press release. “The Department of the Interior now needs to take a hard look at whether the Chukchi Sea should be open for drilling at all, beginning with a full and public environmental impact statement process that addresses last week’s Ninth Circuit decision.”