Murkowski calls Shell pull-out a ‘kick in the gut’

Shell's Fennica vessel. Photo: John Ryan/KUCB.
Shell’s Fennica vessel. Photo: John Ryan/KUCB.

Sen. Lisa Murkowski says news that Shell is pulling out of the Alaska Arctic hit her hard.

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“Heartsick. Kick in the gut. Just really devastated,” she said, speaking as she walked through the Capitol on her way to a Senate vote Monday.

Murkowski says dry holes are a fact of oil exploration, but she blames the federal government for curtailing Shell, and for frustrating Alaskan efforts to portray itself as open for business.

“You’ve got a very, very difficult federal regulatory environment that can chase that business away,” she said. “And we saw that over the course of seven years and$7 billion of commitment from Shell.”

Murkowski, who as chairman of the Senate Energy Committee, helps shape the nation’s energy policy, named one government decision as a particularly troubling impediment. The company intended to run two drilling rigs at the same time, nine miles apart. The U.S. Fish and Wildlife Service said no, citing a pre-existing rule requiring a 15-mile buffer between rigs to protect walrus. Murkowski says forcing the company to use just one rig at a time was big blow to Shell.

“That wasn’t part of what they had anticipated. That was a huge financial setback for them — having that rig on standby,” she said.

Officials at the Interior Department said repeatedly they were holding Shell to rigorous standards to protect the environment.

Shell’s global priorities may have played a role in its decision, too. In April, Shell’s CEO said the company aimed to pare down to three types of businesses, which did not seem to include the Chukchi project. Company executives labeled the Arctic a “longer term option,” a category they slated for review and reduction.

Liz Ruskin is the Washington, D.C., correspondent at Alaska Public Media. Reach her at Read more about Liz here.

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