Reaction on Shell Announcement at the Arctic Energy Summit

The Arctic Energy Summit (AES), organized by the Institute of the North, was held in Fairbanks, Alaska, on Sept. 27-30. The event brought about 375 attendees to the Carlson Center, including scientists, academics, lawmakers, federal officials, diplomats, regulators, industry professionals, tribal leaders, business owners, and consultants.

 

Conference organizers said about 65 percent of the attendees were from the U.S., and all others were from the other seven Arctic nations, plus the United Kingdom, South Korea, China, Germany, and other Arctic Council observers. The full agenda and recorded sessions can be found online here.

 

While NSG’s The Arctic Report primarily focuses on DC events regarding Arctic issues, the reaction of this particular conference’s attendees to Shell’s Sept. 28 announcement—that it would cease all Arctic exploration operations—is worth noting, as the news broke on the conference’s first full day. Shell was a primary sponsor of AES, and approximately a dozen Shell executives attended.

 

Shell was greeted with open arms at Sunday’s reception and then with dodgy eyes on Monday morning—analogous to a “disappointing night in following a long, exciting courtship,” said an anonymous contact. Most presenters commented that they had to change their talking points given the announcement.

 

Despite the news—which executives said they knew on Thursday, Sept. 24, in advance of the conference—Shell did not “abandon” its AES attendance. Instead, the executives met the elephant in the room head on, and industry leaders and lawmakers—including Alaska Gov. Bill Walker—voiced disappointment alongside optimism for future exploration. Also of note was the optimism and support of ExxonMobil, which generated simultaneous news stories of its own promoting Arctic drilling.

 

At the conference, Shell executives highlighted the company’s collaborative efforts on technology, information sharing, and industry best practices. Peter Webb, an advisor in Shell’s International Organizations Government Relations office, said regulations should be specific to a nation, region or theater as the Arctic is a complex region, but  a shared understanding exists for moving forward to assess the risks comprehensively and holistically. Webb emphasized the company’s position that federal regulations created too many “unpredictable” barriers for Shell to continue its U.S. Arctic exploration activities.

 

Shell’s pullout does not mean there is no oil in U.S. Arctic waters. In his Sept. 30 speech at AES, Gov. Walker said he had a number of meetings with Shell following the announcement, and said Shell simply couldn’t find what it was looking for in that spot. “There is no question oil is out there,” he added.

 

Webb, however, said the regulatory environment needs to be addressed, and technology still needs to advance to reduce the cost of drilling in the Arctic.

 

For more on the responses from Gov. Walker and others to Shell’s announcement, see the Sept. 28 article in the Alaska Dispatch. Tara Sweeney of the Arctic Slope Regional Corporation also offered her views at the conference here via KUAC, echoing Shell’s troubles with federal regulations.

 

More links relating to this announcement can be found in the ICYMI section of this edition.