Shell Oil Calls Off Arctic Exploration for 2014
Thursday, January 30 2014
Shell Oil's chief executive announced that the company is giving up on plans to drill in the Arctic this summer during a press conference on Thursday morning.
But the news reached Unalaska several hours before that.
Pete Slaiby, a Shell Alaska executive, called Unalaska mayor Shirley Marquardt at home Wednesday night. He told her that the company was canceling its Arctic plans.
"Just so I wouldn’t be caught off guard," Marquardt says. "We’ve worked very well together over the last several years, so I appreciated that."
This summer, Unalaska was supposed to play host to a handful of Shell oil rigs and support vessels, and dozens of crew members.
Shell had booked up more than half the available rooms at the Grand Aleutian Hotel leading up to the start of their drilling season in the Arctic.
Tom Enlow is the senior vice president of UniSea -- the company that owns the hotel.
"A couple of days ago, we were still negotiating with Shell for rooms -- their accommodations and housing requirements," Enlow says.
Earlier this month, the hotel hosted a planning meeting for Shell and local stakeholders. Logistical personnel from Shell sat down with local tugboat captains, shipping company representatives, Unalaska’s ports director, and marine pilot Dave Lund.
Lund says they figured out where to place Shell’s two drilling rigs in Unalaska, and what kind of anchors they would need to withstand storms.
"All the main players that were going to be involved in this, they were all out here," Lund says. "So it was a very successful meeting."
A week later, a federal appeals court ruled that Shell’s oil leases in the Chukchi Sea are faulty. The court said the environmental assessments are based on inadequate projections of oil production. That decision was the final straw for any exploration work this summer.
But it’s not clear if Shell is also putting research projects on hold. The company still sent vessels up to the Arctic to do seismic studies when a moratorium kept them from drilling in 2010.
Shell would not comment on its research plans. In a statement, the company said, ”The lack of a clear path forward and an associated timeline makes it impossible to justify the commitment of resources needed to explore safely in 2014.”
Kirk Payne is the president of Delta Western, a fuel supplier. They worked with Shell in 2012, and they were prepared to sell them fuel again.
Now that Shell’s called off their plans, Payne says it's back to business as usual -- catering to the fishing industry.
"I think that there was certainly an optimism in the community based on increased activities," Payne says. "Now the activity will be more near normal levels, which has sustained Dutch Harbor just fine."