Shell Oil Asks Regulators For More Time On Beaufort, Chukchi Leases

Shell Oil has spent the better part of a decade – and more than $6 billion – trying to explore prospects in the Alaskan Arctic, but they have little to show for it.

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Now that the clock is ticking down on their oil leases in the Beaufort and Chukchi Sea, Shell is asking regulators for more time. The company is seeking a five-year suspension from the Bureau of Safety and Environmental Enforcement, to keep its leases from expiring.

The request has been in process since July – but it wasn’t public until Monday, when the conservation group Oceana distributed a copy to the media.

Mike LeVine is a lawyer for Oceana. He says it’s not uncommon for oil companies to receive what’s called a suspension on their leases. But usually, it only happens once a site is in production. Beyond that:

“Shell cites conditions that it says were beyond its control to justify a suspension and that claim is at best disingenuous,” LeVine said.

In a 10-page letter to regulators, Shell Vice President Pete Slaiby points to court challenges and permitting problems that delayed exploration.

He also argues that the short ice-free season in the Arctic hindered his company – as did the need to work around indigenous whale hunters and reduce emissions at the request of stakeholders.

LeVine says Oceana and other conservation groups have asked regulators to suspend Shell’s leases before.

“If a suspension meant that no activities could happen for five years and the government would commit to putting in place a better plan for making better decisions for the U.S. Arctic Ocean, a suspension would be great,” LeVine said. “That does not appear to be what Shell is asking for.”

Shell holds leases on 38 prospects in the Chukchi and Beaufort Sea that will expire starting in 2017. Slaiby writes that a five-year extension would “provide Shell assurance” to keep investing in them.

A spokesman for the Bureau of Safety and Environmental Enforcement told Bloomberg News that the agency is evaluating Shell’s request.