US government calls off oil lease sales in Arctic

The Obama administration has cancelled two sales of off-shore drilling leases in the Arctic, following Shell’s announcement to end exploratory operations in the region. The two lease sales were scheduled for 2016 and 2017 for offshore areas in Beaufort and the Chukchi Sea.

The United States Department of the Interior cited a number of reasons to cancel the sales, including low industry interest and market conditions. As oil prices remain low, interesting in risky and remote drilling may seem like a less profitable option to oil companies. According to a press release from the Department of the Interior, the fact that Shell’s exploratory well found less oil than predicted was also a factor.

The Bureau of Safety and Environmental Enforcement also denied requests from Shell and Stateoil to extend their existing leases to conduct exploratory drilling in the region. The current lease in Beaufort is set to expire in 2017, and the lease in Chukchi is set to expire in 2020.

The news is welcomed by climate hawks and environmental activists, who say that continuing to search for new sources of fossil fuels will contribute to climate change while also putting ecosystems at risk in the face of oil spills.

“We congratulate the Interior Department on taking these two important steps toward protection of the Arctic Ocean from the threats of drilling in this fragile ecosystem which is experiencing the effects of climate change at a faster rate than anywhere else on earth,” Earthjustice attorney Erik Grafe said in a statement.

"We need to keep all the Arctic oil in the ground,” Miyoko Sakashita of the Center for Biological Diversity told the AP.

However, should oil prices recover, interest in offshore drilling in the Arctic in the future may be renewed.

Tags: Alaska | Arctic | Oil

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