Royal Dutch Shell is giving up Arctic oil drilling, for now. After spending $7 billion on the search and fighting for the right to drill in the waters off Alaskan shores, the company simply could not find enough oil to make the project financially advantageous.
Environmental groups in Alaska are ecstatic over the news, after battling to protect wildlife in the area.
The oil company drilled a well 80 miles off the coast, reaching 6,800 feet deep, but didn’t find anything. However, geologists believe that beneath the Arctic lies a quarter of the world’s fossil fuel reserves.
Shell still believes that exploration is important, and that the Alaskan Arctic will still be a key player in providing energy for the US. With oil prices dropping steadily, though, time will tell if Arctic oil drilling will ever be economically viable.
As renewable energy picks up momentum, it may emerge as the industry leader before fossil fuel companies ever find what they are looking for.
Some analysts disagree, though. Energy demands are growing, too, and it is likely that the world will consume an additional 10 billion barrels of oil a day during the decade between 2030 and 2040.
Environmental groups won’t let drillers into the area without a fight, though. Although their campaign to keep Shell out of Alaska was not successful, it was a large obstacle that may keep other oil companies at bay. Scientists are also concerned and outspoken about the effects that finding a new source of fossil fuels would have on the renewable energy market, advising against investing anymore time or energy into projects that are bad for the environment.
Image (c) AP/Don Ryan