ConocoPhillips Alaska says it will delay its 2014 plans for exploratory drilling in the Arctic Ocean off Alaska's northwest coast.
In a press release, the company announced that it will put its Chukchi Sea drilling plans on hold "because of uncertainties of evolving federal regulatory requirements and operational permitting standards."
It says it would not be prudent at this time to devote the financial resources needed to preserve the option to drill
ConocoPhillips Alaska President Trond-Erik Johansen says the company is confident in its ability to safely drill but that more time is needed to ensure that all regulatory stakeholders are aligned.
Alaska politicians were quick to express disappointment in the announcement Wednesday, with Gov. Sean Parnell emphasizing his hopes that ConocoPhillips might still consider oil development in the state.
“I am disappointed that the federal government’s unstable regulatory environment has led Conoco to make this business decision,” Parnell said. “The federal government’s inability to provide regulatory certainty is once again reducing jobs and economic opportunities for Alaskans.”
Sen. Mark Begich also put a hopeful cast on the announcement, hoping government and industry would reconcile their differences.
“I am disappointed. I’ve spent the last four years working with the administration and industry to promote responsible development of Alaska’s Chukchi and Beaufort seas,” Begich said. “With today’s announcement, I will continue to encourage the Department of Interior and industry to work together, iron out their differences and get moving on exploring and developing these resources that are key to our economic and national security.”
Both Sen. Lisa Murkowski and Rep. Don Young joined Parnell in blaming federal regulations for the company’s delay of its 2014 drilling.
“I’m disappointed that ConocoPhillips won’t be moving forward with its Arctic program next year -- Alaska and the nation need the energy and the jobs that new oil production off Alaska’s coast would bring -- but it’s a decision that’s not unexpected,” Murkowski said. “Companies can’t be expected to invest billions of dollars without some assurance that federal regulators are not going to change the rules on them almost continuously.”
“It is unfortunate that ConocoPhillips will delay exploration in the Chukchi Sea next year,” Young said. “While I am confident that ConocoPhillips can and will responsibly drill in the Arctic, today’s announcement really shines the spotlight on the endless amount of permitting, rules and regulations coming from the Obama Administration that continue to hamper the oil and gas industry, especially with regards to offshore exploration.”
Environmental groups hailed Wednesday’s announcement as proof of their claims about oil companies’ inability to safely drill in the Arctic, calling for even more regulation in its wake.
“These decisions are an admission that the oil industry is still not capable of meeting the enormous challenges posed by operating in the world’s most extreme environment,” said Greenpeace Arctic campaigner Ben Ayliffe. “The time has come for governments around the world to call for a permanent halt to the reckless exploitation of the far north.”
“ConocoPhillips’ decision to shelve its Chukchi Sea drilling plans is a smart move,” said Andrew Hartsig, the Ocean Conservancy’s Arctic program director. “Right now, drilling in remote Arctic waters is just too risky. Conoco’s retreat from the Chukchi Sea, along with similar recent announcements by both Shell and Statoil indicates a clear admission that oil and gas companies are not prepared to conduct safe and responsible drilling operations in U.S. Arctic waters.”
Chris Krenz of Oceana says specific Arctic standards must be put in place before drilling is allowed.