Shell delays arctic oil drilling until next year
HOUSTON — With the prospect of rich new oil fields in tantalizing reach, Shell Oil announced on Monday that it was forced to put off exploration in the Alaskan Arctic for yet another year after a spill containment dome was damaged during a testing accident.
While the company will perform preliminary work this year on several wells in the region, it will not be able to drill for oil until next summer at the earliest.
The latest setback in Shell’s six-year, $4.5 billion effort to drill off the coast of Alaska heartened environmentalists, who have opposed the drilling program at every turn.
Some suggested that Shell’s inability to control its containment equipment in calm waters under predictable test conditions suggested that the company would not be able to effectively stop a sudden leak in treacherous Arctic waters, when powerful ice floes and gusty winds would complicate any spill response.
But the company received a shot of encouragement from the Obama administration, which defended Shell’s efforts and expressed the desire to continue working with the company to open the Arctic for drilling next year.
Shell expected to receive all the necessary permits to drill up to five wells this summer and fall, but equipment problems and persistent sea ice forced the company to cut back its program repeatedly.
“It’s a disappointment that this particular system is not ready yet,” Marvin E. Odum, the president of Shell Oil, said in an interview. “We’ve made the call that we are better off not drilling in hydrocarbons this year.”
It was the third year in a row that Royal Dutch Shell, the parent company, was frustrated in one of its most ambitious global endeavors.
In 2010, the disastrous BP oil spill in the Gulf of Mexico stalled its efforts to win regulatory approval. In 2011, delays in getting final approval for an air quality permit forced the company to delay drilling.
This year, the company won almost all the regulatory approvals it needed. It recently began drilling pilot holes, and it hoped to drill at least one or two exploratory wells into deep zones that could hold oil and gas by the end of October.
The Alaskan Arctic is one of the great untapped frontiers for offshore drilling in the United States. Energy experts say the Arctic seas could produce up to 1 million barrels of oil a day, roughly equivalent to 10 percent of current domestic production.