Arctic Lovers Can Thank Falling Oil Prices for this Gift

The high cost of drilling for oil in the Arctic, combined with the lowest oil prices in five years, have caused Chevron Corp. to drop their test well drilling program in Canada's Beaufort Sea.

2 minute read

December 19, 2014, 8:00 AM PST

By Irvin Dawid


"Chevron Corp. told Canadian regulators Wednesday that it has 'indefinitely' suspended plans to drill for oil in Arctic waters, citing uncertainty over the outlook for crude prices," writes Chester Dawson of The Wall Street Journal.

Chevron holds an exploratory license to a Beaufort Seas lease 155 miles off the coast of Tuktoyaktuk, a town in the Northwest Territories. The company planned to start exploratory drilling by 2020, according to the [National Energy Board], Canada’s chief energy regulator

The second largest U.S. oil company is experiencing the fall-out from plummeting world oil prices, "50% since June." Unconventional sources, be they shale oil, oil sands, or drilling in the Arctic are all expected to see capital investment recede due to their higher drilling and exploratory costs. [See "Fracking's Formidable Foe"].

The Arctic holds billions of barrels of untapped oil reserves, but offshore-drilling costs there are among the highest in the world due to its remote location and severe weather.

On another Arctic front, but in a different sea, country and with a different oil company, Alex Guillen of Politico Morning Energy writes that over 100 House Democrats have written [PDF] Interior Secretary Sally Jewell to request that she reject a new Environmental Impact Statement [a requirement of the National Environmental Policy Act (NEPA)] for a lease sale in the "Chukchi Sea off the Northwest of Alaska" originally sold to Shell OIl in 2007. Among the reasons they cite is the "complete inability to respond to an oil spill in this remote and sensitive region."

Wednesday, December 17, 2014 in The Wall Street Journal

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