ANCHORAGE, Alaska - The reactions to Royal Dutch Shell's decision to end exploratory oil drilling in the Arctic Ocean keep rolling in. Shell said Monday that it was ending operations in the Chukchi Sea off Alaska after a test well yielded disappointing results. The company has spent $7 billion on its Alaska drilling program.
Shell's withdrawal spurred Alaska's senior senator, Republican Sen. Lisa Murkowski, to call on the Obama administration to work with Alaskans to develop a clear path for drilling in the Arctic. Murkowski is urging the administration to developing a legitimate, predictable and sensible regulatory system that will encourage oil companies to invest in Alaska, both onshore and off.
She made the statement Monday on the heels of Shell saying it will cease Arctic operations, in part due to unpredictable federal regulations.
Alaska's junior senator, Republican Dan Sullivan, noted that environmental groups are cheering the news, but he said it's a sad day for Alaska and working Americans.
However, Oregon Democratic Sen. Jeff Merkley countered that Shell's Arctic pullout is tremendous news, and a credit to the people who made clear that Arctic drilling in unacceptable.
He said the U.S. should "seize the moment" and use its chairmanship of the Arctic Council to develop and agreement to end offshore drill among all Arctic nations.
Joining the ranks of those upset about Shell's decision is the president of the Alaska Native regional corporation for Iñupiat living on the Arctic Slope. Rex A. Rock Sr. with the Arctic Slope Regional Corp. said the news that Royal Dutch Shell is ceasing exploratory drilling in the Arctic is a major blow for Alaska.
Rock said the timing is bad because Alaska is facing a "financial crisis" because of low oil prices and dwindling production from Prudhoe Bay and because it hits close to home to for communities dependent upon oil production.
Without resource development both on- and off-shore, he said they're facing "a fiscal crisis beyond measure."
Given that Shell cited, among other reasons, "the challenging and unpredictable federal regulatory environment" in deciding to end drilling in the Alaska Arctic for the foreseeable future, Rock said the regulatory environment has proven to be a burden to development. He added that it will lead to more good opportunities slipping away because "no one wants to do business in Alaska."
And Alaska Gov. Bill Walker, an Independent, said Royal Dutch Shell's decision shows the state needs to drive its own destiny through oil and gas development.
Walker said he has contacted the White House to set up meetings about the impact of Shell's decision on the state. The governor also said he'll stress the importance of the federal government allowing oil and gas drilling along the coastal plain of the Arctic National Wildlife Refuge.
Alaska's budget relies heavily on oil revenue, but production from the once-prodigious North Slope now barely fills a quarter of the trans-Alaska pipeline.