Shell scraps its 2014 Chukchi drill season

Shell has scrapped its planned 2014 Chukchi Sea exploration program. The decision was made because of uncertainties raised by a Jan. 22 Ninth Circuit Court of Appeals decision in a lawsuit over environmental reviews of a 2008 federal Outer Continental lease sale in which Shell and other companies won leases in the Chukchi Sea.

“As a result of uncertainty raised by the recent Ninth Circuit Court decision that requires the Bureau of Offshore Energy Management to gather and synthesize additional data related to Chukchi Lease Sale 193, we have made the decision to stop the planned 2014 exploration program offshore Alaska,” Shell spokesman Curtis Smith said in an email.

“The lack of a clear path forward and an associated timeline makes it impossible to commit the resources needed to explore safely in 2014,” he said.

 A three-judge panel of the Ninth Circuit Court held that the U.S. Mineral Management Service, the predecessor agency to the U.S. Bureau of Offshore Energy Management, had used an improper, conservative estimate as a basis for environmental review in the Environmental Impact Statement for the lease sale. The agency had assumed an initial find of one billion barrels of recoverable reserves in the Chukchi sale area.

A coalition of environmental groups and two Alaska Native organizations filed a lawsuit claiming the agency should have used a higher figure in the EIS.

01/30/2014 - 12:05pm