Shell Stops Controversial Offshore Oil Exploration and Drilling Project Near Alaska

Silhouette of offshore jack up rig at sea during sunsetThe Royal Dutch Shell Oil Company announced Sunday night that they’re ending their offshore exploration and drilling efforts in the Arctic region ue to a lack of oil to make the project worthwhile, according to NPR.

While they wouldn’t go so far as to say their offshore Alaska drilling hopes would end for good, they did indicate they would be stopping for the “foreseeable future” after already having spent $7 billion on the project. The multinational company released a statement on their website,

“The Burger J well is approximately 150 miles from Barrow, Alaska, in about 150 feet of water. Shell safely drilled the well to a total depth of 6800 feet this summer in a basin that demonstrates many of the key attributes of a major petroleum basin,” the statement reads. “Shell has found indications of oil and gas in the Burger J well, but these are not sufficient to warrant further exploration in the Burger prospect. The well will be sealed and abandoned in accordance with U.S. regulations.”

The exploration of potential oil and gas reserves in the Chukchi Sea have been ongoing for several years, going back to 2012 when the project was halted over safety concerns. This past May they were able to secure federal approval, but not without a great deal of opposition.

Local Alaska Public Media reporter, Rachel Waldholz, covered the story for

“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,” Waldholz wrote.

While the concerns are certainly warranted when it comes to drilling in sensitive regions, it does reduce the overall potential of offshore production, which currently accounts for approximately 30% of the oil and half of the natural gas produced in the world today.

Shell also mentioned the ongoing political and governmental volatility that tends to follow these issues, stating that in addition to overall costs, the “challenging and unpredictable federal regulatory environment in offshore Alaska” contributed to their decision as well.

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