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U.S Government Opens Leasing of Chukchi Sea to Other Drillers after Shell Backed Out

The U.S government announced Thursday that they will be welcoming other oil and energy companies interested in leasing Chukchi Sea near Alaska after Shell backed out..

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By Julie S: Sept 29, 2013

The U.S government announced Thursday that they will be welcoming other oil and energy companies interested in leasing Chukchi Sea near Alaska after Shell backed out, Reuters reports.

Chukchi Sea is located at the northwest side of Alaska and believed to hold more than 15 billion barrels of oil, according to the U.S. Bureau of Ocean Energy Management (BOEM) calculation.

Shell was the first company to lease in 2008 for $2.1 billion. The company started its preliminary drilling in 2012 but experienced challenges in their equipment. It also reported accidents happening on-site. Finally, the company announced that it will no longer drill in Chukchi Sea for 2013. It also did not say if there will be drilling for 2014.

BOEM hopes to receive leasing proposals as soon as possible so that it could have more time to check the locations. The federal agency wants to make sure that it will not cover those that are under environmental protections and may endanger the Alaskans and animals living nearby. The leasing contract will be good for five years.

“Any future leasing in the Chukchi Sea must be focused on areas that can be developed safely and responsible while also protecting sensitive habitats and places that are important to Alaska Native hunters and fishermen,” BOEM Director Tommy Beaudreau said in a statement.

“Shell’s long list of setbacks and failures during its 2012 Arctic drilling campaign, combined with the reality that there is no effective way to clean up an oil spill in Arctic conditions or infrastructure in the region to support an adequately safe drilling or cleanup effort, provides overwhelming evidence that the oil and gas industry is not prepared to operate in the Arctic Ocean,” said Cindy Shogan, executive director of the Alaska Wilderness League, to Reuters.

Other active drillers in Chukchi include ConocoPhillips and Statoil but both had also announced that they will be postponing the drilling. Both did not mention if they will still drill in the future.

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