The Arctic Oil Boom Is Over As Oil Companies Agree
Above Photo: Marcus Donner / Greenpeace
With the departure of a Spanish oil company from the Chukchi Sea, only Shell still holds a drilling lease in U.S. Arctic waters. Here’s why an Arctic oil boom never happened and why it probably never will.
Now that Spanish oil company Repsol has relinquished the last of its 93 leases in the Chukchi Sea, only one leaseholder is left — Shell. Why the company is holding onto a single lease after losing billions of dollars and any reputation for competence it might have had is anybody’s guess.
But the fact remains: drilling in the Arctic is dangerous and expensive for oil companies, catastrophic for the environment, and unwelcome by the communities who live there.
A Little History
Once upon a time, way back in the 1980s and 1990s, oil companies rushed to purchase leases to explore and drill in the U.S. Arctic. It looked like a gold rush. The companies vied rabidly for parcels in the Chukchi and Beaufort Seas north of Alaska, expecting gushing oil wells and massive piles of money. But within a couple years, all the oil companies were gone. No gushers, and definitely no piles of money, unless you count the billions of dollars the oil companies wasted on their abandoned leases.
Fast forward to early 2008, with oil companies once again lined up ahead of a giant lease sale. Industry giants like Shell, Conoco Phillips, and Statoil, as well as lesser knowns like Repsol and Eni Petroleum, again shelled out to the tune of $2.8 billion just to purchase leases. They then spent millions maintaining those leases for years, exploring and bungling any effort to find — let alone extract — oil in U.S. Arctic waters.
The most famous of all the mishaps in the Arctic is Shell’s horrendous effort in 2012, a $7 billion debacle that ended up with a grounded rig, a stranded crew being rescued by the Coast Guard, and not a single drop of oil. It would have been comical if the stakes hadn’t been so high.
And then, of course, there was this:
A Party of One
From the start, oil companies have whined that U.S. rules and regulations have stood in their way in the Chukchi Sea. And now that oil prices have stalled at half of what they were a couple years ago, going through the costly and complicated effort of finding and drilling for oil in a place covered by ice nine months a year doesn’t make much sense.
But the fact is, it never has made sense and it never will.
As companies like Shell and BP have proved time and time again, oil spills are not preventable, and a spill in the Arctic — with its rough seas, extreme conditions, and ice cover — would pretty much be impossible to clean up.
Furthermore, as people who call the Arctic home have said for years, they don’t want oil companies coming in and potentially destroying their livelihoods. And drilling for oil anywhere is dangerous to us all, as climate change continues its march to catastrophic levels. Why would we spend billions of dollars to access oil from the most extreme environments on the planet when we could — and should — be investing in the renewable energy sources of the future?
Right now, we have the power to end new leases in the Arctic — as well as the Gulf of Mexico, which has sufferedthe destruction and carelessness of the oil and gas industry for far too long.
Now that Repsol has joined almost everybody else in getting out of the Arctic, it’s a party of one up there, with Shell acting all weird and dancing alone on its one tiny lease.
Hey Shell, can we call you a cab?