Shell Just Scrapped Its Arctic Drilling Plans for “the Foreseeable Future”

Turns out it just wasn’t worth the expense.

Protesters demonstrate near Shell's Arctic drilling rig, the Polar Pioneer, while it was docked in Seattle this summer.Elaine Thompson/AP

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


And just like that, it was over.

After years of botched attempts, mountains of red tape, billions of dollars, and countless face-offs with protestors, Royal Dutch Shell announced today that it is pulling the plug on all oil and gas exploration in the Arctic Ocean “for the foreseeable future.” From the press release:

Shell has found indications of oil and gas in the Burger J well, but these are not sufficient to warrant further exploration in the Burger prospect. The well will be sealed and abandoned in accordance with U.S. regulations.

“The Shell Alaska team has operated safely and exceptionally well in every aspect of this year’s exploration program,” said Marvin Odum, Director, Shell Upstream Americas. “Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US. However, this is a clearly disappointing exploration outcome for this part of the basin.”

There was always a chance this could happen. Given the sky-high costs of drilling and transporting oil in the Arctic, making the venture profitable required a complex soup of numbers to all fall in Shell’s favor, particularly how much oil there really was down there and how much Shell could expect to sell it for. (No amount of gas would likely be profitable.) The press release skimps on details, but it blames “the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.” It also says Shell is locked into paying $1.1 billion in existing contracts.

Thanks to climate change and the loss of Arctic sea ice, many energy experts have been increasingly bullish on the prospects for Arctic oil exploration. The area could theoretically have the potential to outstrip the Middle East, but as of now it’s largely untapped. The decision today is a heavy blow to future offshore drilling projects in the Arctic, said Robert Dillon, a spokesman for Sen. Lisa Murkowski (R-Alaska), who has been one of the biggest congressional proponents of offshore oil drilling.

“It’s certainly a disappointment,” he said. “It’s now becoming more and more questionable whether there’s going to be offshore activity at all. A lot of uncertainty of how we go forward in Alaska.”

The decision was also a major win for environmental groups, many of whom have made Shell’s Arctic exploration a central focus of their campaigns over the last year.

“It’s proof positive that it’s time to stop going to the ends of the Earth to search for dangerous, costly fossil fuels,” said Franz Matzner, director of the Beyond Oil initiative at the Natural Resources Defense Council. “It’s not safe, it’s not what the science demands if we’re serious about climate change, and Shell just proved that it doesn’t make any sense.”

More Mother Jones reporting on Climate Desk

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate