Shell Arctic drilling halted, Army Corps of Engineers suspends study on Arctic port for oil ships

Shell Arctic drilling stopped due to poor Chukchi Sea results

After Shell Arctic drilling plans were shelved, the Army Corps of Engineers suspended a study into a deep-water port for large oil and gas support ships in the Arctic Ocean at Nome, Alaska. mxak.org photo

ANCHORAGE, Alaska – The Army Corps of Engineers suspended its study into building the first deep-water port for large oil and gas support ships in the Arctic Ocean after Royal Dutch Shell ended its exploratory drilling off Alaska’s northern coast.

Shell’s decision last month to halt offshore drilling in the Chukchi and Beaufort seas raised questions about the need for the port project aimed primarily at reducing travel costs for oil and gas support vessels, the Corps said in a statement Monday.

It said it would put the study on hold for a year instead of cancelling it because the industry could change and interest is high in improved Arctic marine infrastructure.

“During the next 12 months, the Corps and its partners will monitor Arctic activities to determine if there may be the potential for federal interest in continuing the study,” the Corps said in a statement.

The Corps began working with Alaska in 2011 to examine the possibility of creating a port for large oil and gas ships at Nome Harbor, which is 550 miles northwest of Anchorage, by expanding it and deepening it to 28 feet.

The plan figured three exploratory wells would be developed in the Chukchi Sea by 2020 and the site would help vessels cut down on travel.

Shell was the only company actively exploring in U.S. Arctic waters, spending upward of $7 billion on offshore development. It announced Sept. 28 that it would stop Arctic drilling, citing disappointing results from a well in the Chukchi Sea and the unpredictable federal regulatory environment.

After the company’s move, the federal government said it was cancelling petroleum lease sales in U.S. Arctic waters scheduled for 2016 and 2017. Beaufort Sea leases are set to expire in 2017, and Chukchi Sea leases, in 2020.

Sen. Lisa Murkowski, R-Alaska, told the Alaska Dispatch News (http://bit.ly/1ibzznV ) that it’s “disheartening to see the negative impacts of Shell’s decision continue to ripple throughout Alaska.” She said she is hopeful the Corps will decide to move forward with the project in the coming year.

Joy Baker, Nome port director, also was disappointed but said the city is glad the Corps is not ending its work altogether. A draft study was close to being completed by the Corps’ office in Alaska, she said.

“The city is fully intending to pursue project authorization based on broader justifications of national security, life and safety, protection of the environment,” Baker told the newspaper. “We believe there’s a broader purpose for the facility than just the economic benefit of the oil and gas industry.”

The Canadian Press