Royal Dutch Shell announced on Monday that, after nine years and $7 billion and several PR black eyes, it was pulling the plug on drilling in Alaska’s Chukchi Sea “for the foreseeable future.”
Environmentalists, who have pitched a heated “Shell No!” campaign to stop the drilling, were quick to claim victory. Kayaktavists and other protestors have warned about the threat drilling presented—particularly given the difficulties of responding to potential oil spills—to polar bears, whales, and other Alaskan wildlife. But the decision was surely a financial one rather than a philosophical one.
Shell pointed to disappointing results from an exploratory well and the high costs of operating in Alaska as reasons for ceasing the project.
In its piece today, The New York Times said it was “another sign that the entire industry is trimming its ambitions in the wake of collapsing oil prices.”
Fifteen months ago, the price of a barrel of crude oil was over $100. Today, the price was $45 a barrel.
“The industry has cut its investments by 20 percent this year and laid off at least 200,000 workers worldwide,” the Times reported today, before noting that energy companies were retreating from less profitable fields in the U.S. and around the globe.
The Washington Post noted this morning that “half a dozen companies had already put their Arctic plans on ice.”
