Shell drops plans to drill in Alaskan Arctic this year

February 3, 2011 

Shell Alaska has dropped plans to drill at least one exploratory well in the Arctic waters of the Beaufort Sea this year.

Shell in October said it would scale back its Arctic Ocean exploration plans in 2011 to promising sites in the Beaufort Sea, backing off prospects in the Chukchi Sea until legal questions were cleared.

Shell Alaska vice president Peter Slaiby blamed the decision to halt the Beaufort exploratory drilling on "continuous regulatory delays." In particular, he said, an environmental appeals board recently remanded Shell's request for an air permit.

Drilling in Arctic waters is opposed by environmental groups and some Alaska Native groups, who say petroleum companies have not demonstrated an ability to clean up a spill in ice-choked waters. They also say the remote location of drilling sites, the area's fierce weather and the lack of infrastructure, including a deep-water port, would make a cleanup of a major spill nearly impossible.

Shell has invested more than $3.5 billion in the Arctic outer continental shelf, including $2.2 billion in leases in the Chukchi that have been challenged.

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