Shell Backs Off Arctic Drilling After Legal Blow

The Shell logo is shown at a Shell petrol station April 23, 2003 in London, England.
National Journal
Ben Geman
Add to Briefcase
Ben Geman
Jan. 30, 2014, 1:04 a.m.

Oil gi­ant Roy­al Dutch Shell said Thursday that it’s scrap­ping con­tro­ver­sial plans to drill off Alaska’s coast this year after a court rul­ing threw the leg­al status of its leases in­to ques­tion.

The 9th Cir­cuit Court of Ap­peals last week said the In­teri­or De­part­ment botched an en­vir­on­ment­al ana­lys­is un­der­pin­ning its 2008 sale of oil-drilling leases in the Chuk­chi Sea, where Shell hoped to look for oil this sum­mer.

Shell, in a state­ment, said the court de­cision puts “sub­stan­tial obstacles” in front of plans to drill in Arc­tic wa­ters off Alaska’s coast.

“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,” said CEO Ben van Beur­den in a state­ment.

“We will look to rel­ev­ant agen­cies and the court to re­solve their open leg­al is­sues as quickly as pos­sible,” he said.

Shell’s an­nounce­ment Thursday came as the com­pany re­por­ted a steep drop in fourth-quarter profits and said it would cut its cap­it­al spend­ing. Bloomberg has more about that here.

The court rul­ing is the latest set­back for Shell’s years-long, mult­i­bil­lion-dol­lar cam­paign to ex­plore what are be­lieved to be gi­ant oil de­pos­its in the Beaufort and Chuk­chi seas off Alaska’s coast.

The com­pany had a series of mis­haps in its 2012 cam­paign to drill in the two ad­ja­cent seas.

It began pre­lim­in­ary drilling but was un­able to win In­teri­or De­part­ment per­mis­sion to drill in­to oil-bear­ing zones. Shell did not seek ap­prov­al to drill in 2013 but was weigh­ing a scaled-back Chuk­chi Sea plan in 2014.

En­vir­on­ment­al groups op­pose drilling in the Arc­tic re­gion that’s home to po­lar bears, bowhead whales, and oth­er en­dangered or fra­gile spe­cies, ar­guing that it’s too dif­fi­cult to con­tain po­ten­tial spills.

Ac­cord­ing to The Hou­s­ton Chron­icle, van Beur­den said dur­ing a fourth-quarter earn­ings present­a­tion Thursday that the com­pany is “frus­trated” by the de­cision in the law­suit brought by en­vir­on­ment­al groups.

“The obstacles that were in­tro­duced by that de­cision cer­tainly make it im­possible to jus­ti­fy the com­mit­ments of cost, equip­ment, and people that are needed to drill safely in Alaska this year,” the Shell ex­ec­ut­ive said.

What We're Following See More »
ISIS INVOLVED
Niger Attack Possible Terrorist Set-Up
10 hours ago
THE LATEST

"An emerging theory among U.S. military investigators is that the Army Special Forces soldiers ambushed in Niger were set up by terrorists, who were tipped off in advance about a meeting in a village sympathetic to local ISIS affiliates...The group of American Green Berets and support soldiers had requested a meeting with elders of a village that was seen as supportive of the Islamic State, and they attended the meeting at around 11 a.m. local time Oct. 4...Such meetings are a routine part of the Green Beret mission, but it wasn't clear whether this meeting was part of the unit's plan."

Source:
TRUMP’S COMMENTS AT ISSUE
Bergdahl’s Sentencing Delayed Until Wednesday
10 hours ago
THE LATEST

"The long-awaited sentencing of Army Sgt. Bowe Bergdahl was delayed Monday after a legal battle erupted over the word 'but' in President Donald Trump's most recent remarks about the case. Bergdahl's defense team argued that their client could not get a fair shake from the court because Trump, during a Rose Garden appearance on Oct. 16, at first said he couldn't talk about the case and then added: 'But I think people have heard my comments in the past.'" Trump has called him a traitor and suggested he should be executed.

Source:
PROBE CAME FROM INQUIRY INTO MANAFORT’S FINANCES
Mueller Investigating Tony Podesta and His Firm
19 hours ago
THE LATEST

"Tony Podesta and the Podesta Group are now the subjects of a federal investigation being led by Special Counsel Robert Mueller, three sources with knowledge of the matter told NBC News. The probe of Podesta and his Democratic-leaning lobbying firm grew out of Mueller's inquiry into the finances of former Trump campaign chairman Paul Manafort."

Source:
SCHEDULED FOR TUESDAY
House Intel Will Interview Trump Digital Director
21 hours ago
THE LATEST

"President Donald Trump’s campaign digital director, Brad Parscale, will be interviewed Tuesday by the House Intelligence Committee, his first appearance before any of the panels examining the issue of Russian interference in the 2016 election. Mr. Parscale confirmed his scheduled appearance. The Senate committees also probing interference haven’t scheduled time with Mr. Parscale, he said, declining to comment further."

Source:
CONGRESS MAY HAVE DIFFERENT IDEAS
Trump Promises No Changes to 401(k) Plan
21 hours ago
THE LATEST
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login