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Shell Pulls Out of Arctic Drilling

Washington (AP) — Shell is dropping plans to drill in the Arctic waters off Alaska this year after a 2012 drilling season marred by equipment failures and ongoing investigations by the Coast Guard, Interior Department and the Department of Justice.

Shell Oil Co. President Marvin Odum said the company was suspending its plans to drill in the region this year but would be back “at a later stage.”

“Shell remains committed to building an Arctic exploration program that provides confidence to stakeholders and regulators, and meets the high standards the company applies to its operations around the world,” Odum said in a statement yesterday. “We continue to believe that a measured and responsible pace, especially in the exploration phase, fits best in this remote area.”

Shell’s announcement came as the Justice Department investigates 16 safety and environmental violations the Coast Guard found in late November on the Noble Discoverer, one of the company’s two Arctic drilling rigs. The other rig, the Kulluk, is the subject of a Coast Guard investigation into the circumstances of its grounding Dec. 31 off Alaska’s Kodiak Island.

The Interior Department has launched a broader review of Shell’s Arctic problems, which include the containment dome on its spill response barge being “crushed like a beer can” during a test off Washington state. The Environmental Protection Agency says both Shell drilling rigs violated air-quality standards. And the Noble Discoverer rig dragged anchor and almost grounded in Alaska’s Dutch Harbor.

Environmental groups yesterday hailed Shell’s announcement that it would suspend drilling. They also said President Obama should withdraw his support.