Shell Cancels Arctic Drilling For 2013

Feb 27, 2013

Shell Oil Co. has put Arctic drilling on hold. The company announced Wednesday that it will not attempt to drill for oil in the Arctic Ocean this year. The announcement comes after a year of accidents and setbacks for Shell’s Arctic drilling efforts.

In a press release, Shell Oil president Marvin Odum called the move a “pause” in the company’s program to explore for oil off the north coast of Alaska. Shell has already spent nearly $5 billion on the effort.

“Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012,” Odum said.

Environmental groups welcomed the announcement. They urged the Obama administration to reverse its support for Arctic drilling.

"With no infrastructure or ability to clean up an oil spill in ice and Shell’s continual laundry lists of mishaps and failures, it is a no brainer to suspend drilling in the Arctic," Cindy Shogan of the Alaska Wilderness League said in a statement. "If President Obama truly wants to address his climate change legacy, saying no to Arctic Ocean drilling would be a huge first step.”

Shell had planned to drill for oil last year but suffered a series of mishaps stretching from Seattle to the Arctic Ocean. They culminated in a tugboat losing power during a winter storm in the Gulf of Alaska. The oil rig it was towing to Seattle for maintenance ran aground on New Year’s Eve.

The Interior Department and the Justice Department are investigating that accident and earlier ones in both Alaska and Puget Sound.

The Kulluk, the oil rig that ran aground and suffered unspecified damages, is currently under tow to a port in the Aleutian Islands. This time, Shell is using three tugs, instead of one, to avoid another costly grounding.

Shell plans to send both of its disabled Arctic drill rigs to dry docks in Asia for major repairs.

Its oil-spill containment vessel, the Arctic Challenger, is still under construction in Bellingham, Wash. Interior Department officials said Wednesday Shell has not scheduled a second round of testing for the Arctic Challenger. The first round in September left a key piece of equipment "crushed like a beer can" and forced the company to forgo Arctic oil drilling in 2012.