The Interior Department cancels Arctic lease sales a few weeks after a major oil and gas company said ‘sayonara’ to offshore exploration projects.
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It appears that hotly contested oil and gas drilling in the American Arctic is going the way of the dodo. The U.S. Department of Interior announced Friday that it is canceling two lease sales and will not extend current leases for companies interested in drilling in the Arctic waters off the Alaska coat.
The move comes just three weeks after major oil and gas company Royal Dutch Shell said it would halt offshore drilling in the in the area because exploratory wells did not yield what the company had hoped.
Leases held by Shell and the Norwegian oil and gas company Statoil will expire in 2017 and 2020. Though both companies have applied to the Interior Department to retain their leases, the announcement means their requests have been denied.
The upshot is excellent for polar bears and other Arctic animals that could have been disturbed by extensive drilling activities, and for environmental groups that worry burning fossil fuels found in the Arctic could hasten climate change. As the Associated Press explains, the U.S. government’s decision “significantly reduces the chances for future Arctic offshore drilling.”
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“That [decision] pretty much shut down offshore,” Alaska Governor Bill Walker told the AP. Walker traveled to Washington, DC earlier this month to advocate for opening up small portions of the Arctic National Wildlife Refuge to oil and gas drilling.
“The only thing left is onshore,” Walker continued. “We know where the oil is. We just don't have access to it."
The Interior Department’s decision does not appear to be strictly motivated by environmental concerns. “In light of Shell’s announcement, the amount of acreage already under lease and current market conditions, it does not make sense to prepare for lease sales in the Arctic in the next year and a half,” said Secretary Sally Jewell. “Current market conditions and low industry interest made the leasing decision easier. “
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