(Photocredit: Jim Paulin/AP)
Shall ices Arctic drilling campaign:
“The Arctic’s rapidly warming climate has created an opening for oil companies to get at the vast stores of hydrocarbons estimated to lie underneath the sea floor, even as scientists warn that those fossil fuels are driving climate change,” writes Matt Smith for VICE News. “But the price of crude has plunged from more than $100 a barrel to less than $50 in the past year and a half, making it harder for more difficult plays to break even.”
Royal Dutch Shell has ditched its hard-fought push to find oil and natural gas off the remote Alaskan coast ‘for the foreseeable future,’ saying this summer’s drilling turned up weak prospects at high cost.
The announcement came as a happy surprise to environmentalists, who harried Shell in court and on the water in an unsuccessful attempt to halt the project. They argued that the region’s harsh conditions would raise the risk of a major spill, which would be all but impossible to clean up.
The company said it will cap the 6,800-foot well it drilled this summer and walk away, writing off an estimated $4.1 billion in the process. The entire effort is publicly estimated to have cost the company at least $7 billion since 2008, when it obtained leases on the seabed about 75 miles northwest of the Alaskan shore.
Greenpeace, whose activists boarded one of Shell’s drill ships in the Pacific and blockaded one of its icebreakers in Portland, Oregon, exulted in the decision Monday. Greenpeace spokesman Travis Nichols said the depth of public opposition to the project ‘caught them flat-footed,’ and the results should boost efforts to protect the Arctic.
‘Shell sunk $7 billion into this. They bullied regulators and ran roughshod over public opinion, doubling down on this huge bet, and they busted,’ Nichols said. ‘I think that’s going to be a big warning sign to other oil companies.’