US & Canada

US curbs Arctic offshore oil and gas drilling

Royal Dutch Shell hoped to use this rig for exploratory drilling during the summer open-water season in the Chukchi Sea off Alaska's north-west Image copyright AP
Image caption Shell had leased rigs for the Arctic but said it did not find sufficient amounts of oil and gas

The US government has announced new curbs on oil and gas exploration in Arctic waters off Alaska's northern coast.

It comes after oil giant Royal Dutch Shell last month stopped its Arctic activity citing "disappointing" tests.

The US interior department said it was cancelling two potential Arctic offshore lease sales and would not extend current leases.

The announcement has been welcomed by environmentalists.

Miyoko Sakashita, of the Center for Biological Diversity, said the decision was "great for the Arctic and its polar bears".

"We need to keep all the Arctic oil in the ground," she said.

US government leases are due to expire in the Beaufort Sea in 2017 and in the Chukchi Sea in 2020.

"In light of Shell's announcement, the amount of acreage already under lease and current market conditions, it does not make sense to prepare for lease sales in the Arctic in the next year and a half," Interior Secretary Sally Jewell said in a statement.

Image copyright AP
Image caption Environmental activists have long campaigned against offshore drilling in the Arctic

Shell has spent about $7bn (£4.5bn) on Arctic offshore development in the Chukchi and Beaufort seas.

However, last month it announced it had not found sufficient amounts of oil and gas in the region to warrant further exploration.

It said it would end exploration off Alaska "for the foreseeable future".

Correspondents say the Arctic is a risky and expensive place for oil companies to explore, and the current low price of oil makes it even less attractive.

The US Geological Survey estimates that the Arctic holds about 30% of the world's undiscovered natural gas, as well as 13% of its oil.

However, environmental groups say offshore drilling will pollute and damage a natural wilderness.

They also argue that fossil fuels such as oil and gas must be left in the ground if the world is to avoid runaway climate change.

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