Oct 28, 2014
Shell has urged the Obama administration to give it five more years to fulfill its quest for Arctic oil, citing the $6 billion the oil giant has already invested in the effort and circumstances it said were beyond its control.
Peter Slaiby, Vice President of Shell Alaska, writes in the letter to the Interior Department's Bureau of Safety and Environmental Enforcement (BSSE) that "despite Shell's best efforts and demonstrated diligence, circumstances beyond Shell's control have prevented, and are continuing to prevent, Shell from completing even the first exploration well" in either of its Chukchi or Beaufort Sea lease holdings.
"Circumstances Shell could not have anticipated at the time it acquired its leases significantly impede Shell's utilization of its lease rights to proceed with exploration and development of its Alaska leases before they are due to expire."
Among the unanticipated circumstances Shell cites are lack of regulatory-compliant and Arctic-ready rigs, shortened operating windows, legal challenges, and the need to accomodate Native community whaling activities.
Developing the area's reserves "is plainly in the national interest," Shell's letter states.
The oil giant urges the BSSE to grant the extended time now, as waiting until the current lease period ends in 2017 could cost the company hundreds of millions of dollars in needless expenditures, the letter states.
The letter does not include reference to the company's series of mishaps which environmental groups said was indication of the risks of drilling in the fragile area.
The letter states that "the few short annual drilling seasons that remain are inadequate to make up for the many years that Shell has lost largely due to circumstances beyond Shells' control."
Oceana said Shell was asking for unwarranted rule-bending.
Susan Murray, Oceana's deputy vice president, Pacific, said in a statement: "Though this letter is somewhat shocking in its tone and request, we are, unfortunately, no longer capable of being surprised by either Shell's efforts to skirt rules or the company's inability to recognize its own role in failing to complete planned exploration activities in Arctic waters."
"Shell spent billions of dollars fully aware of the risks to that investment, and the government should not bend the rules to allow the company to continue business as usual. Shell deserves no special treatment and, to the contrary, has a track record of irresponsible choices that warrants close scrutiny and the highest standards," Murray stated.
Shell's justifications for extra time "are incomplete and, at best, disingenuous," she stated, adding that they "are further indication that the company cannot or will not do what is necessary to operate safely in the Arctic Ocean."
Greenpeace stated earlier this year: "Shell's decision to gamble on the Arctic was a mistake of epic proportions." The environment group added that Shell's continued barriers and blunders should be a sign to other oil companies "that this region is too remote, too hostile and too iconic to be worth exploring."
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