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Last Oil Company Pulls Out Of Arctic Offshore Drilling Efforts In Chukchi Sea

The Pacific Walrus calls the Chukchi and Bering Seas home. CREDIT: SHUTTERSTOCK
The Pacific Walrus calls the Chukchi and Bering Seas home. CREDIT: SHUTTERSTOCK

It’s often hard to find good news when it comes to the world’s oceans. Overfishing, coral bleaching, dead zones, acidification, pollution, oil spills, melting sea ice, sea level rise, the odd Cold War-era Russian rocket crashing into Baffin Bay with some leftover toxic fuel in the tank: There are as many marine bad news stories as there used to be fish in the overfished sea.

So on World Oceans Day a bit of positive news is a breath of fresh air — or gill-full of clean water.

Repsol, a Spanish oil company which owned a significant portion of the drilling leases for Alaska’s Chukchi Sea, abandoned 55 of them last week and plans to drop the remaining 38 next year.

“Repsol is in the process of relinquishing its Chukchi Sea acreage position offshore Alaska,” Repsol spokeswoman Jan Sieving said in a statement.

After eight years, billions of dollars, and significant controversy, we’re back to a clean slate in the Chukchi sea.

The Spanish company joins the rush of oil drillers — Shell, ConocoPhillips, Eni, and Iona Energy — departing the Arctic region after concluding that offshore drilling is not worth the expense or the risk. After Shell spent over $4 billion attempting to develop offshore Arctic oil and completing just one exploratory well, it said it was done in the Chukchi “for the foreseeable future.” This was two years after Shell’s Kulluk rig ran aground and had to get rescued by the Coast Guard heading south attempting to avoid paying more taxes in 2013.

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Apart from one token Shell lease block that the company is retaining to keep the information it gained from its failed 2015 exploratory well, Repsol’s leases were the last blocks remaining in the Chukchi.

“Last month we figured out that Shell and a bunch of other companies had given up their leases,” said Mike Levine, Oceana’s Pacific senior counsel, told ThinkProgress. “After eight years, billions of dollars, and significant controversy, we’re back to a clean slate in the Chukchi sea.”

CREDIT: Oceana
CREDIT: Oceana

Those blocks cost Repsol $15 million in 2008, netting the company access to over half a million acres of ocean floor to explore for oil and gas deposits.

After a boom in the 80s and 90s when millions of acres were sold in the Arctic Ocean, all of the leases in the Chukchi Sea, with initial terms of 10 years, were relinquished by 2003. A few remained in the nearby Beaufort Sea, closer to shore and able to rely on slightly more coastal infrastructure and oil pipelines. Another boom took place from 2003 to 2008, where another 3 million acres were sold to oil and gas companies to again explore.

Once again, of the 487 leases obtained in the Chukchi sale, all companies (save Shell’s one remaining lease) relinquished their leases to explore for oil and gas, according to research from Oceana. The Beaufort leases have dropped from 240 to 71 — and many of those are close to the end of their terms, with no immediate plans for development. Repsol said their Beaufort leases are up for review and could be “relinquished periodically as the portfolio is high graded.”

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“Both Repsol and Shell have said they’re taking a separate process to pursue exploration in the Beaufort,” Levine said. “It’s something of a mystery why companies are still holding onto them.”

It’s becoming clearer to many that drilling offshore in the Arctic is a terrible idea — there are icebergs and pack ice to worry about year-round, darkness and extremely low temperatures for large parts of the year. This means it costs billions to even find out if it’s possible to extract the oil, which is a problem when global oil prices have plummeted so low. Drilling in the Arctic also risks a spill that would be so difficult to clean up, in 2011 the Coast Guard said it had “nothing” prepared in case of a spill. NOAA is also still testing methods of how to respond to such a disaster.

Grassroots movements and opposition from Democratic presidential candidates may not have played a huge role in the boardroom discussions that led to these companies jettisoning their Arctic leases, but more discussion has led to more awareness, and a new drive to halt all new offshore drilling, period.

Kayaktivists Vs. A Massive Oil Rig: Inside Seattle’s Fight Against Shell’s Arctic Drilling PlansClimate by CREDIT: On Saturday, they came by sea: hundreds of “kayaktivists” gathering around a newly-arrived, massive…thinkprogress.orgThough their legal status was in question and may have expired already, Shell handed over 30 exploration permits in the Eastern Arctic to the Nature Conservancy of Canada to allow the government to establish a national marine protected area in Lancaster Sound.

Even though offshore Arctic drilling is taking a nap in North America, the Eurasian Arctic is not getting off so lightly. Norway is still trying, unsuccessfully, to drill for offshore oil in the Arctic. Russia is proceeding with its efforts to augment its Siberian deposits with the oil locked under the seabeds off its long Arctic coast, even though it lost partners like Exxon after sanctions went into effect following Russia’s military aggression in Ukraine.

Companies could easily lose their reluctance to pursue risky drilling projects if the price of oil rises high again. If that happens it would take national and international regulation to ease the threat of a horrible spill. “It’s time the Obama Administration listens to the Arctic communities, climate and environmental activists, and the oil companies and protects the Arctic Ocean from the threat of offshore drilling,” Dan Ritzman, Sierra Club’s director of Arctic Operations, said in a release.

Still, ocean advocates took a moment to breathe a sigh of relief.

“It was good news on the eve of World Oceans Day and gives us hope for a sustainable future in the Arctic,” said Oceana’s Levine.