Obama Administration Cancels Oil Drilling Lease Sales In Arctic Ocean

CREDIT: AP Photo/Elaine Thompson, File

In this May 14, 2015, file photo, the Royal Dutch Shell oil drilling rig Polar Pioneer is towed toward a dock in Elliott Bay in Seattle. Three weeks after Royal Dutch Shell announced it was walking away from exploratory drilling in U.S. Arctic waters, the Obama administration has taken steps to keep drill rigs out of Alaska’s northern ocean for a decade or more.

The Interior Department has scrapped two lease sales for oil drilling in the Arctic Ocean, a move that comes as a win for environmentalists who have fought to prevent oil development in the remote region.

The lease sales had been scheduled tentatively for 2016 and 2017 in the Beaufort and Chukchi Seas. The Interior Department’s Friday announcement comes a few weeks after Royal Dutch Shell announced that it would be stopping its oil exploration in the Arctic “for the foreseeable future,” due to a “challenging and unpredictable” regulatory environment and insufficient oil and gas discoveries. The Interior Department referenced Shell’s decision in its reasoning behind canceling the two lease sales.

“In light of Shell’s announcement, the amount of acreage already under lease and current market conditions, it does not make sense to prepare for lease sales in the Arctic in the next year and a half,” Secretary of the Interior Sally Jewell said in a statement.

Also on Friday, the Interior Department rejected attempts by oil companies Shell and Statoil to get more time to explore for oil under their existing leases in the Arctic, saying that neither company properly illustrated how it would take advantage of the extra exploration time.

Drilling in the Arctic has emerged as a major rallying point for environmentalists. This summer, activists hung from a bridge in Portland in an attempt to get a Shell oil ship bound for the Arctic to turn around — an effort that ultimately succeeded. And earlier this year, hundreds of Seattle protesters took to kayaks to protest Shell’s drilling plans.

Environmentalists praised the Interior Department’s announcement as a major step forward towards protecting the Arctic from oil and gas development.

“This is a historic decision to keep Arctic oil in the ground that will be felt for years to come. It’s great news for the Arctic and for everyone fighting against extreme fossil fuel projects,” Greenpeace spokesperson Travis Nichols said in a statement. “This is the right move for President Obama to secure his climate legacy through one of the most vulnerable places on Earth, but he can still do more by using his authority to withdraw the Arctic Ocean from future offshore oil drilling.”

Arctic drilling is worrying environmentally for multiple reasons. One is climate change: the Arctic is already warming twice as rapidly as the rest of the world is, and that warming — and the ice melt it’s caused — is opening up the Arctic to drilling that wasn’t before possible. But burning the oil developed from the Arctic will only lead to more warming: One study estimates that a third of the globe’s oil reserves must stay in the ground if the world is to avoid the worst impacts of climate change.

Another worry for environmentalists is the risk of spills. The Arctic region is remote, and its weather can be erratic, meaning that if a spill does occur, it could be difficult to clean up. And a spill isn’t unlikely: A Bureau of Ocean Management report found that there was a 75 percent chance of a spill greater than 1,000 barrels if an oil company began producing oil in the Arctic over the long term.

As of now, seven companies have drilling rights in the Chukchi Sea, but only Shell has explored for oil there. One company, Statoil, told Fuelfix that it was still figuring out how to act after the Interior Department’s announcement.

“As a result of the uncertainty, regulatory environment and high costs associated with offshore operations in Alaska, Statoil does not currently have a timeline for future activities,” Statoil spokesman Hakon Fonseca Nordang said.