Governor Parnell Disappointed by Shell’s Decision to Drop Drilling Offshore Alaska

Alaska’s Governor Sean Parnell is disappointed by Shell’s announcement that it will not be exploring off Alaska’s coast in 2014.

“Today’s news is extremely disappointing for Alaska, but certainly understandable given the recent Ninth Circuit Court ruling,” Governor Sean Parnell said. “Multiple years of federal regulatory delay, litigation delay, and one year of operational issues have created barriers to Alaskans’ near-term economic prospects. Still, offshore energy development will play an enormous role in Alaska’s economic future, and I remain committed to responsibly developing our vast offshore resource basin. As we move forward, I am confident Shell can be part of Alaska’s bright future.”

The reason for Shell’s decision is that the 9th U.S. Circuit Court of Appeals ruled last week that the Department of the Interior violated the law when it sold offshore oil and gas leases in the Chukchi Sea off the coast of Alaska.

“This is a textbook example of how the federal framework can negatively impact our economy, and how it can actually slow the progress of technology and innovation, harming key national interests,” Governor Parnell said.

Shell’s recently elected CEO Ben Van Beurden yesterday said: “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. “We will look to relevant agencies and the Court to resolve their open legal issues as quickly as possible.”

Alaska’s Arctic offshore is estimated to contain 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Shell has so far invested close to $6 billion to develop its leases in Alaska’s Arctic, including more than $2 billion for the leases.

Oregon, Earthjustice against drilling

However, in a separate statement issued yesterday, Oregon’s Senator Jeff Merkley hailed Shell’s decision and called for a ban on all future drilling in the Arctic.

“An oil spill in the Arctic would be disastrous, and I am glad Shell is cancelling plans to drill in this sensitive area this summer. It is doubtful that drilling in the harsh and unforgiving elements of the Arctic can be done safely and the consequences of a mistake would be catastrophic. The Department of the Interior should cancel Shell’s lease and put a halt on all future leases in the Arctic, because drilling in the Arctic is just too risky and dangerous,” Merkley said.

“Shell’s decision today means America’s Arctic waters are safe from big oil for another summer,” said Erik Grafe, Earthjustice attorney. “The Department of the Interior now needs to take a hard look at whether the Chukchi Sea should be open for oil drilling at all, beginning with a full and public environmental impact statement process that addresses last week’s Ninth Circuit decision about the Chukchi Sea leases and does not minimize the risks of oil drilling in this vibrant but vulnerable sea.”