Arctic Oil Leases Left to Expire

Undersea Arctic oil turned out to be a bust. Oil exploration companies that paid $2 billion for oil and natural gas leases under the Chukchi Sea when world oil prices were higher now are letting those leases expire. The biggest loser is Shell, which spent another $2 billion drilling one well only to find it nearly empty. Besides not striking oil, Shell had a series of dangerous and embarrassing equipment failures that led it to call for rescue on more than one occasion. Shell is keeping the lease on the one tract where it drilled, but in a few years that lease too expires. One other oil exploration company is renewing its leases. The rest of the oil industry has turned its back on the Arctic for now. Low oil prices, the extraordinary costs of operating around sea ice, and then the chance of not striking oil make it hard to justify the trip into the Arctic Ocean. With so little industry interest, the Department of the Interior will surely not attempt another Arctic oil leasing auction for years.