Royal Dutch Shell Plc  .com Rotating Header Image

Senate bill would give oil companies a decade more to drill in Arctic leases

Screen Shot 2015-07-28 at 21.09.47

Screen Shot 2015-07-28 at 21.10.53

Screen Shot 2015-06-30 at 21.06.27By Jennifer A. DlouhyJuly 27, 2015

WASHINGTON – Shell and other oil companies with leases in U.S. Arctic waters could get an extra 10 years to develop them under a proposal advancing in the Senate.

Sen. Lisa Murkowski, R-Alaska, embedded the Arctic lease provisions in a broader bill that also would lift the U.S. crude export ban, expand offshore drilling and give coastal states a greater share of revenue from the activity.

The measure is slated for action in Murkowski’s Energy and Natural Resources Committee this week and next. If the panel approves the offshore drilling legislation, that would prime it for floor consideration after the Senate’s August recess and position it as a possible addition to a comprehensive energy package also moving through the committee.

Oil industry leaders say the typical 10-year duration of offshore leases is too brief for Arctic oil exploration, which is confined to about three months a year, while conservationists argue extending leases would rob the U.S. of potential revenue from selling the leases again and unfairly reward companies that have not begun exploring existing leases.

Requests for more

Murkowski’s lease provision responds to the pleas of Shell, ConocoPhillips and Statoil for more time to develop oil and gas leases in the Chukchi and Beaufort seas north of Alaska. Each has asked the Interior Department for a “suspension of operation” that would effectively stop the clock ticking on their 10-year leases.

The Interior Department’s Bureau of Safety and Environmental Enforcement is considering the requests from Shell and Statoil in July 2014. It previously rejected ConocoPhillips’ November 2013 bid for at least three more years. ConocoPhillips appealed the decision to an Interior Department appeals board. Settlement talks are underway.

Current law gives the safety bureau limited authority to issue the requested suspensions, which are generally reserved for instances when they are needed to install safety equipment, conduct environmental analysis or comply with judicial decrees, when activities pose a threat of harm or damage or there have been “inordinate delays” in obtaining permits.

Extend the term

Murkowski’s offshore drilling and oil exports bill would empower the Interior secretary to extend the initial term of federal leases in the Chukchi and Beaufort seas to 20 years.

Neither Statoil nor ConocoPhillips has launched exploratory drilling in the region, and neither has given the government a required blueprint for the activity.

Shell drilled two wells in the Chukchi and Beaufort seas in 2012 and is set to begin work on a third within days. But legal delays, equipment failures and other obstacles prevented Shell’s drilling in other years.

Without action, the Beaufort and Chukchi sea leases would begin expiring in 2017 and 2018.

In Murkowski’s home state of Alaska, oil revenue is a critical source of funding, but it is threatened by declining North Slope production and lower crude prices. Arctic production could send more dollars to state coffers, if lawmakers expand an existing offshore revenue sharing program now limited to four Gulf states. Murkowski’s bill would make that change, giving Alaska and other coastal states a share of offshore royalties that otherwise flow to the federal government.

SOURCE and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

0 Comments on “Senate bill would give oil companies a decade more to drill in Arctic leases”

Leave a Comment

%d bloggers like this: