Shell Frozen Out of Alaska

Royal Dutch Shell has been frozen out of Alaska
for oil exploration, but not because of the weather.
Rather, the regulatory enviornment is leaving the
oil company cold, not the freezing temperatures in
our northernmost state.

Shell reported that a recent exploratory well showed
that although there were some hints of oil there, that
there was not nearly enough to justify further explor-
ation. The costs of such projects is quite steep, and
when the additional costs of the regulatory environment
imposed by Washington in coastal Alaska are factored
in it doesn't seem worthwhile for an oil company to
look for oil there. So Shell is leaving Alaska to focus
its efforts elsewhere, and Alaska's economy and our
nation's energy production will be the worse for this.

Although the federal government finally allowed Shell
to do exploratory drilling in Alaska's Chukchi Sea this
summer, the company had already paid $2.1 billion to
obtain leases there, and now has to go home empty-handed
and with a lighter wallet.

Some of Shell's investors were not sorry to see Shell pack it
in up in Alaska with oil then going for a lower price. They
want Shell to concentrate on smaller, less costly projects which
will be more likely to increase the bottom line. But Shell's
work in Alaska was about the future price of oil, looking
ten years ahead, rather than current markets and prices.
Shell even applied to extend their offshore Alaska leases,
which are due to expire before the end of the decade.
And now Shell will take a cold bath for their venture in
Alaska's frigid waters.

Something more to bear in mind for President Trump.
He is certainly amenable to lightening the regulatory
burden to help us to become energy-independent
and therefore able to tell OPEC to take a hike, as some
hostile nations along with iffy ones make up much of its
membership. That's a good sign, because it's not just our
economy that requires it but our national security as well.
His predecessor seemed not to care much about either.


MEM