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Obama moves to block development in 9.8 million acres of Arctic Ocean

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Screen Shot 2014-08-06 at 09.25.26Krestia DeGeorge,Nathaniel Herz: January 27, 2015

Citing biodiversity and Alaska Native subsistence whaling, the Obama administration moved to block development in 9.8 million acres within the Beaufort and Chukchi seas as part of a new five-year outer continental shelf oil and gas leasing program, the draft of which was released Tuesday morning by the Department of the Interior.

The announcement came two days after President Barack Obama said he planned to ask Congress to declare much of the Arctic National Wildlife Refuge in Northeast Alaska as wilderness, including the possibly oil-and-gas-rich coastal plain — and a month after the president closed waters in and around Bristol Bay to oil and gas development.

Those moves come at a time of increased anxiety within Alaska over the future of the state’s oil and gas industry, as well as the impact falling oil prices have on the state’s budget.

Some of the leases sold in the 2008 sale, including leases acquired by Royal Dutch Shell, are just outside the Hanna Shoal exclusion area.

“There’s nothing we’re announcing today that impacts Shell’s plans,” Jewell said at  Tuesday morning press conference. “They have valid existing leases.”

Shell has struggled with a drilling program in those leases. A lawsuit challenged how the leases were awarded, and missteps — including the grounding of the drill rig Kulluk and thecriminal conviction of Shell drilling contractor Noble Drilling — also hurt the company’s efforts.

In a statement, Shell did not comment on whether today’s news affects it efforts to continue drilling in the U.S. Arctic Ocean, but it appears committed to moving forward.

The company looked ahead to future decisions that need to happen for it to complete drilling in the potentially oil-rich Burger prospect in the Chukchi Sea, about 70 miles northwest of the Arctic village of Wainwright.

“As for Alaska, our focus remains the Chukchi leases we have and the potential for a future drilling program,” a statement from Shell said.

For that to happen, progress is needed in a number of areas, including the Bureau of Ocean Energy Management completing the Supplemental Environmental Impact Statement for Lease Sale 193, involving the sale in 2008 when Shell spent about $2 billion to acquire leases.

The company also needs the “necessary permits” as well as “complete confidence that we can execute a program safely and responsibly.”

A Shell spokesman would not comment on how the plunge in low oil prices will affect the costly project.

As for the national sum of Jewell’s announcement on Tuesday, Shell said the decision affecting offshore development a is “positive recognition” that oil and gas development will continue playing an important role off the nation’s coasts. But the company said it was disappointed in Jewell’s decision to exclude promising acreage in the eastern Gulf of Mexico.

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