Industry praises Shell's arctic safety record

Dutch major pulled plug on offshore Alaska program after disappointing results.

By Daniel J. Graeber
Industry praises Shell's arctic safety record
Shell praised by industry peers for safe 2015 campaign in the arctic waters off the coast of Alaska. Photo courtesy of the Bureau of Safety and Environmental Enforcement

WASHINGTON, Sept. 29 (UPI) -- Despite disappointing results for Shell in arctic Alaskan waters, industry leaders say the $7 billion campaign was a success in terms of safe operations.

Royal Dutch Shell said it was dismantling its exploratory operations in the arctic Chukchi Sea after drilling uncovered no commercial prospects of oil and natural gas. Environmental activists praised the end to a campaign they viewed as risky, with Greenpeace calling for a moratorium in future arctic programs.


Marvin Odum, director of Shell's exploration and production division in North America, said this year's program was safe in every aspect of operations.

"Contrary to the previous rhetoric of anti-development activists, the 2015 Chukchi Sea exploration season provides further evidence that drilling can be done safely in the U.S. arctic offshore," added Consumer Energy Alliance President David Holt and CEA-Alaska President Anne Seneca in a joint statement.

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Shell in July discovered a hull breach on the MV Fennica, a vessel chartered to carry safety equipment to the Chukchi Sea. A regional effort in 2012 was marked by a series of equipment failures.

Alaska Gov. Bill Walker said the results from Shell were a clear disappointment for a state that relies heavily on the revenue generated from oil and natural gas. Sen. Lisa Murkowksi, R-Alaska, said arctic drilling will happen at some stage despite environmental and regulatory hurdles.


"I personally believe that America should lead the way," she said in a statement. "The arctic is crucial to our entire nation's future, and we can no longer rely solely on private companies to bring investments in science and infrastructure to the region."

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A 2004 federal study of the Burger prospect targeted by Shell in the shallow waters off the coast of Alaska described it as likely the largest reserve pool of its kind in the region.

Supporters of arctic campaigns said it would diversify a U.S. energy base beyond operations in the Gulf of Mexico and inland shale basins. Randall Luthi, president of the National Ocean Industries Association, said tapping arctic oil reserves made good strategic sense.

"[Shell's] ability to drill without incident this season demonstrates that the Arctic can be safely explored," he said in an emailed statement. "Shell's multi-year campaign shows their commitment to providing domestic oil and natural gas to the U.S. and willingness to invest in U.S. jobs."

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The Dutch supermajor committed about $7 billion to the program. The company said the financial charges would be outlined in its third quarter 2015 results.

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