ASRC Official: Feds’ Inconsistent Regulations Led to Shell Quitting Chukchi Sea Project

Sep 30, 2015

The Arctic Energy Summit’s agenda didn’t include any presentations on Royal Dutch Shell’s decision to halt offshore oil exploration in the Chukchi Sea. But the subject was clearly on the mind of attendees during the second day of the international forum in Fairbanks.

Arctic Slope Regional Corp. Executive Vice President for External Affairs Tara Sweeney said “The announcement from Shell is deeply disappointing.”

Tara Sweeney, ASRC executive vice president for external affairs.
Credit ASRC

Sweeney says Shell’s decision demonstrates the need for consistent federal regulation of offshore drilling. She says environmental safeguards – which federal regulators imposed on Arctic offshore oil exploration after BP’s Deepwater Horizon blowout in the Gulf of Mexico in 2010 – complicated the company’s development plans.

Sweeney says industry requires consistency in regulation to plan and execute operations like offshore oil exploration.

“Regardless of whether it’s oil and gas or mining or the tourism industry,” she said, “having that consistency helps the industry plan for the economic environment and challenges and opportunities in Alaska.”

Robert Papp, the U.S. special representative for the Arctic, says Shell’s decision doesn’t mean the industry will halt offshore oil exploration and development in waters off Alaska. He says it’s likely to continue. And he says shipping in Arctic waters will continue to increase, especially through the Bering Strait. And for that reason, the United States must continue to develop oil-spill response and search-and-rescue capabilities.

Robert Papp, U.S. special representative for the Arctic
Credit U.S. State Department

“I mean, we’ve got a cruise ship, the Crystal Serenity, that’s going to go through next summer, the summer of ’16,” Papp said. “And between passengers and crew, 2,000 people on there. What happens? What happens in the worst-case scenario? Are we prepared for it?”

Papp says he’s encouraged that President Obama understands that risk and talks about the need to increase U.S. assets in the Arctic.

The president has sort of outlined some priorities when he came up here for his visit,” he said. “And I was really gratified to hear that the icebreaker was the No. 1 thing. And I should qualify that by saying he didn’t say icebreaker – he said icebreakers, plural.”

Papp says it’s now up to Congress to fund construction of the icebreakers, which cost about a billion dollars apiece.

The Institute of the North-sponsored Arctic Energy Summit will continue through Thursday at the Carlson Center.