Shell Concedes Searching for Oil Off the Alaskan Coast is a Really Bad, Really Expensive Idea

By Bryan Lufkin on at

After spending $7 billion drilling for oil and gas in the Chukchi Sea off Alaska, oil giant Shell has announced that it will cease all drilling due to “a clearly disappointing exploration outcome”. This means there might be zero drilling off Alaska’s Arctic coast in the near future.
Shell has called off all drilling for oil and gas in the region because, according to a press release, not enough fossil fuels were obtained to justify continued operations. Vox predicts that this could lead to zero drilling off Alaska, period — at least for now — especially since Shell competitors have also backed out.

The Chukchi Sea, the area in question, is known for its tempestuous, icy, wavy, dangerous conditions that all make drilling particularly tough. Even more, it’s really far away, expensive, and a very messy problem to clean up in the event of an oil spill. That’s why drilling in the region had been pretty inactive since the ‘90s. Sure there are 40 billion barrels’ worth of oil in the area, but it’s expensive and dangerous to get it out of the ground.

Low crude oil prices are batting down the corporate drive for expensive exploration, while at the same time incentivising greater pursuit for home-based oil alternatives. What’s more, US and EU sanctions that hope to help us ditch our oil dependency over global warming fears have only turned up the pressure on companies like Shell. Sure, humans can’t get off oil tomorrow, but turning our attention in a new direction is key to ensuring the feasibility of oil and gas alternatives in the future.

For now, environmentalists can be happy that we might be crossing Alaska off the list of places where the big oil companies will dig for that black gold. Still with those pregnant barrels chilling off the Alaskan coast, this certainly isn’t the last we’ve heard of oil companies trying to dredge it all up. [Shell via Vox and NPR]

Image: Activist Kayakers gather near Shell’s PLC icebreaker Fennica as it heads up the Willamette River on its way to Alaska in Portland. Credit: AP