“NOIA commends Shell’s efforts in the Chukchi Sea and recognizes the great expense of this endeavor. Their ability to drill without incident this season demonstrates that the Arctic can be safely explored. Shell’s multi-year campaign shows their commitment to providing domestic oil and natural gas to the US and willingness to invest in US jobs.
“It is disappointing on a number of fronts that, due to a variety of factors, including regulatory constraints and cost issues, Shell has decided to halt their offshore drilling campaign in Alaska. First, the US will lack energy source diversification for the foreseeable future since low oil prices and high drilling costs in the Arctic will likely impact future exploration activity in the Alaskan Outer Continental Shelf (OCS). Second, enormous economic opportunities for Native Alaskans have been delayed, if not lost, for the immediate future. Third, the US will continue to lag other nations in the exploration and understanding of Arctic offshore areas.
“The groups cheering this news reveal the energy education disconnect in our country. The US and world will need more energy sources, not fewer, in the coming decades, whether they be fossil fuels, which are estimated to still supply nearly 80% of the world’s energy needs in 2040, or renewable energy sources, such as wind, wave, current, and solar.
“The role that the US regulatory system played merits examination, as do the Arctic operating recommendations from the National Petroleum Council. Due to federal regulatory constraints, Shell was forced to put all their exploratory eggs in one basket, i.e., one well, rather than a suite of exploratory wells that would have given a more complete picture of potential resources. Unfortunately, the results serve as an example of the harsh reality of the exploration business; dry or noncommercial wells are not uncommon.
“The Alaskan OCS is predicted to be an important addition to the nation’s energy portfolio. Hopefully, other companies will continue their efforts offshore Alaska, so that Americans can gain a better understanding of the location and size of the valuable oil and natural gas resources in the region.”