Royal Dutch Shell PLC announced on Wednesday that it will not continue to drill in the Arctic Ocean this year. According to the New York Times, their announcement follows a series of incidents that occurred while drilling there in 2012.
The President of Shell Oil, Marvin Odum, stated that “We’ve made progress in Alaska, but this is a long-term program that we are pursuing in a safe and measured way. Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012.”
Shell’s two drilling ships were involved in severe accidents in September and December of last year. The vessels were leaving drilling sites in the Beaufort and Chukchi Seas when the problems occurred.
In September, seasonal ice floes moved Shell’s Noble Discoverer away from its target. When the ship was docked, the Coast Guard found 16 safety violations on it, according to the Associated Press. The New York Times also reported that the Interior Department and the Department of Justice are reviewing Shell’s operations as well due to possible environmental violations and equipment failures.
Shell’s other drilling ship, the Kulluk, also experienced problems late last year. The barge became disconnected from its towing ship in December while being brought to a shipyard. The vessel then ran aground on isolated Sitkalidak Island on New Year’s Eve. According the the Associated Press, the Kulluk was retrieved from the island six days after the incident, but was damaged. The ship is now being brought to a shipyard in Asia for repairs.
Shell initially wanted to drill in the Arctic to access the extensive natural resources located beneath the sea. A United States Geological Survey estimated that there are 26.6 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas underneath Arctic waters. The Associated Press reported that these resources could possibly be brought to shore via underwater pipelines. They could then continue to land by the trans-Alaska pipeline.
Shell spent over 4.5 billion dollars in leases and equipment on their drilling project. The company also spent many years trying to persuade federal officials for permission to drill in the Arctic.
Alaska senator Lisa Murkowski, who is a strong supporter of Arctic oil exploration, stated that Shell’s delay would help to make drilling more safe for the future. The New York Times reported that Murkowki said, “This pause-and it is only a pause in a multiyear drilling program that will ultimately provide great benefits to the state of Alaska and the nation as a whole- is necessary for Shell to repair its ships and make the necessary updates to its exploration plans that will ensure a safe return to exploration soon.”
The Associated Press reported that Curtis Smith, a Shell Alaska spokesman, stated that drilling could possibly begin again in 2014. “It’s possible, depending on the result of ongoing reviews and the readiness of our rigs, and frankly, the confidence that lessons learned from our 2012 drilling program have been fully incorporated.”