The U.S. Department of the Interior announced today that it is cancelling two planned future oil and gas lease sales in the Arctic offshore, one for the federal waters of the Beaufort Sea and one for the Chukchi Sea. Interior said that the decision follows Shell's announcement that it will cease exploration activities in the Alaska offshore for the foreseeable future. The Bureau of Ocean Energy Management also commented that it had received no expressions of interest in a Chukchi Sea lease sale that had been proposed for 2016, and only one nomination for a Beaufort Sea sale slated for 2017.
"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," said Secretary of the Interior Sally Jewell. "I am proud of the performance of Interior's Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement, the U.S. Coast Guard and others in ensuring that Shell's program this past season was conducted in accordance with the highest safety and environmental standards."
The Bureau of Safety and Environmental Enforcement has also denied requests from Shell and Statoil for the suspension of leases in the Chukchi and Beaufort seas. The suspensions would have enabled the companies to retain the leases beyond their primary 10-year terms. The Beaufort Sea leases expire in 2017 and the Chukchi Sea leases in 2020. Among other things, the companies had not demonstrated a reasonable schedule of exploration and development work for the leases, BSEE said.
"I am disappointed by this announcement," said Gov. Bill Walker in response to the announcement. "Alaska must be able to responsibly explore and develop our rich natural resources both onshore and offshore. Any action that limits our ability to explore for more oil - to increase much-needed oil production through the trans-Alaska oil pipeline - creates unnecessary uncertainty and burden on our economy."
- ALAN BAILEY
See story in Oct. 25 issue, available online Friday, Oct. 23, at www.PetroleumNews.com