Alaska's chilling regulatory climate

07-Jan-2016

Late last year a second major oil company was forced to abandon plans to drill in the Arctic Ocean off the coast of Alaska – and irresponsible, high-fiving anti-development activists, most of whom live thousands of miles away and will not be affected, could not be more thrilled.

But for those who live close by, the ones who will be most affected, the news is devastating.


Statoil recently announced that it’s giving up 16 of its company-operated leases in the Chukchi Sea and abandoning its stake in 50 Chukchi leases operated by ConocoPhillips. The Norwegian company added that it would close its offices in Anchorage.

The news comes after Royal Dutch Shell, after spending $7 billion on Arctic offshore exploration in the Chukchi and Beaufort seas, announced it would bow out of Arctic drilling. The two decisions, Alaska Gov. Bill Walker says, were “largely tied” together.

Statoil’s reasoning for axing its Arctic ambitions paralleled Royal Dutch Shell’s explanations. Both cited how Arctic exploration was, “for the foreseeable future,” “not feasible,” “given the current outlook,” it just “no longer made financial sense.”

Some deemed these comments as a nod to the falling oil prices. With inventories at record-highs, oil giants are facing continued pressure to chop costs, especially at the exploration front.

But as Alaska Sen. Lisa Murkowski said, the “real project killer” in both instances was the unprecedented, convoluted, ever-changing federal regulatory process that previously dogged ConocoPhillips in the Arctic. (by David Holt, CEE President via Fuel Fix)


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