Earlier this month, Chevron announced it was withdrawing plans for offshore oil exploration in the Canadian Arctic’s Beaufort Sea in a letter to Canada's National Energy Board. The oil corporation cited "economic uncertainty in the industry,” as a reason for their decision, according to Reuters.
“Chevron’s decision is further evidence that risky, expensive projects in the Arctic Ocean are becoming less and less palatable,” says Oceana Pacific senior council member Mike LeVine. “Though production might not occur in the U.S. or Canadian Arctic Ocean for decades, shorter-term volatility in the price of oil can and should influence decisions about those capital-intensive projects. The concerns about risky investment are particularly acute for projects like those Shell is pursuing in the U.S. Arctic Ocean that have yet to show any positive return.”
The move means that Chevron is putting plans on hold “indefinitely” to drill in the EL 481 block, located about 155 miles northwest of Tuktoyaktuk, Northwest Territories—an area east of the U.S. and Canadian border. Chevron also stopped collaborating with Cameron International to create a new Arctic-specific blowout preventer system, and will likely stop analyzing seismic data around its lease area in the Beaufort Sea, according to the Financial Times. At this point, other oil companies are still proceeding with Arctic offshore oil exploration, including BP, ExxonMobil and Shell.
Chevron’s decision comes on the heels of several other setbacks for offshore oil and gas exploration over the past few months. Most recently, the U.S. Court of Appeals for the Ninth Circuit Court denounced Royal Dutch Shell’s 2012 “preemptive” lawsuit against environmental and Native Alaskan groups as unconstitutional.
Earlier this fall, Oceana uncovered a letter through a Freedom of Information Act request from Shell to the Bureau of Safety and Environmental Enforcement (BSEE), requesting that they extend Shell’s oil and gas leases in the Arctic Ocean. Shell claimed that a number of “unexpected” setbacks—like accommodating Native whaling—delayed their abilities to successfully explore for oil and gas in the Arctic. Shell has suffered a series of mishaps, including an accident that led to a drilling rig having to be scrapped after it ran aground off of Kodiak Island at the end of 2012.
“Shell has spent about $6 billion trying to hunt for oil in Alaska’s Arctic Ocean, but has not yet managed to finish a single well,” says LeVine.
Offshore drilling is incredibly risky to begin with, and carries the potential for oil spills and other dangerous consequences. But in Arctic conditions—an area that is remote, difficult to access and home to such unique marine ecosystems—the risks are amplified. There is no practice or technology to clean up an oil spill in the remote, ice-choked waters of the Arctic, and if a spill happened at the wrong time, a response could be delayed for months because of ice.
“The Bureau of Ocean Energy Management’s latest Draft Supplemental Environmental Impact Statement for its Chukchi Lease Sale 193 found that there is a 75 percent chance of a major oil spill occurring in the Arctic Ocean if drilling is to proceed,” says LeVine. “If our own government projects that there is such a risk, we cannot proceed with putting Arctic ecosystems, fisheries and wildlife at risk.”
Oceana works to ensure that choices about our ocean resources are based on science, precaution, and a fair balancing of public costs and benefits. These choices are particularly important in the Arctic, which is unique and threatened. Oceana advocates for transition to cleaner energy sources and is working to keep offshore oil and gas exploration from coming to the U.S. East Coast. Click here to learn more.