The US Department of the Interior has declared that it will no longer be selling leases or extending current ones for offshore drilling projects in the Arctic. The announcement comes after Shell’s withdrawal and cessation of their drilling program in September, due to “disappointing” results. The company has not yet found resources in large enough quantities to financially warrant further exploration.
The message was well-received, as it greatly decreases environmental risks for wildlife such as polar bears in the area. However, Shell itself does not entirely agree with the termination of the leases, believing that current leases should still be extended and that the opportunity to continue exploration should still be present. Alaska’s Governor has also lobbied against the cancellation, believing that the state’s economy will be adversely affected by the decision. A couple of sales slated to begin in 2016 and 2017 were also cancelled.
In the past, Canada has attempted Arctic drilling in its waters, which also did not yield enough oil or gas for further development. It was also expensive and difficult to achieve, and much of the oil has been transformed into gas, which dissipated over time.
Despite the technical difficulty, increasingly rapid depletion of Earth’s petroleum resources, recent technological advances, and the ever-high demand for oil have sparked great interest in Arctic oil. The US Geological Survey estimated that 13% of the world’s undiscovered oil lies within the Arctic, specifically near Alaska, in the Amerasian Basin, and off the eastern shore of Greenland. This is on top of an estimated 30% of natural gas resources that may be found in the area.
With the demand for oil increasing with each year, it is likely that the decision is only temporary and will last only a few years. The development of the drilling technology needed to feasibly explore the Arctic will eventually serve to help in the discovery of the oil necessary for the justification of long-term extraction programs.
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