CEO Note: Shell Abandons U.S. Arctic Ocean Drilling | Oceana

Shell Oil announced it will suspend all drilling activity in the Arctic for the foreseeable future.

Photo Credit: U.S. Geological Survey/Photo by Patrick Kelley

Shell has finally come to grips with the reality that drilling in the Arctic makes no sense and announced today that it will abandon plans to drill in these inhospitable waters. Oceana’s campaigners were able – by using law, economics, lobbying, science, and the press – to make the case clearly that Shell’s plan was neither economically viable nor environmentally sensible. Today’s decision is the result of more than eight years of campaigning by Oceana and its allies. Oceana was a leader in the effort, and charted new ways to stop one of the largest and most powerful companies on the planet from putting the US Arctic Ocean at risk. This is an enormous victory for the oceans and for Oceana and its allies.

The Arctic Ocean is infamously unforgiving, and its icy and unpredictable nature means that an oil spill would be impossible to clean up. Shell’s last efforts, in 2012, led to a series of mishaps, fines, investigations, and, most famously, the grounding of its drill ship, the Kulluk. These past accidents clearly demonstrated the challenges of operating safely in Alaska's hostile seas. Oceana’s lawyers won decisions – again and again – arguing that decisions to allow Shell to proceed were illegal and were based on insufficient science and preparedness.

Additionally, Oceana was able to work with financial experts to demonstrate that the drilling in the Arctic did not make business sense. According to expert after expert, the potential liabilities and costs of getting this oil from the Arctic vastly outweighed the probability of a positive net return, especially in the current market for oil. As a result of Oceana’s work, many analysts and financial reporters who followed Shell began to ask senior management to explain the business rationale for drilling in the Arctic. The company seemed to struggle with the answer, and Oceana was able to show that Shell’s failure to fully disclose risks probably violated existing SEC regulations and laws.

This victory is important for many reasons in addition to protecting important Arctic marine ecosystems from the dire risk of a spill thousands of miles from help. Oil pumped from the Arctic would exacerbate climate change and would not lower gas prices here in the U.S. This oil would instantly become a global commodity, so Americans who buy it will pay the global market price. At a time when the world is looking to transition to clean energy, it makes sense to leave this nonrenewable resource in the ground.

We applaud Shell's decision. Alaska has already seen more than its fair share of oil disasters, and drilling in the Arctic would inevitably bring another spill. Researchers are still finding continued impacts on the oceans from past spills. Given the many challenges facing our planet, we need the Arctic to remain clean and spill-free.

Now it’s time for President Obama to face the same facts. With climate change looming, we simply cannot risk drilling in this unique and important area. The President must act swiftly to remove the Arctic from his proposed drilling plan and lead the world in providing lasting protection for the U.S. Arctic.

For the oceans,

Andrew Sharpless

Chief Executive Officer