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U.S. Backs Away From Offshore Arctic Drilling

A Royal Dutch Shell oil drilling rig is towed toward a dock in Elliott Bay, Seattle, in May. Three weeks after Royal Dutch Shell announced it was walking away from exploratory drilling in U.S. Arctic waters, the Obama administration has taken steps to keep drill rigs out of Alaska's northern ocean for a decade or more.

The U.S. government is backing away from Arctic offshore oil and gas drilling on two fronts.

On Friday, the Department of the Interior announced the cancellation of two potential lease sales off the Alaskan coast in the Beaufort and Chukchi seas. The Bureau of Safety and Environmental Enforcement also denied lease extension requests from two companies, Shell and Statoil, that were exploring the seas for fossil fuels.

The decisions to nix the lease sales, which the statement attributed to "current market conditions and low industry interest," follows Shell's announcement that it will stop exploration in the Chukchi Sea for "the foreseeable future."

"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," said Secretary of the Interior Sally Jewell.

Lois Epstein, an engineer for the environmental group The Wilderness Society, characterized the government's decision as reasonable, according to a statement.

"Because of Shell's failure to find significant oil in the Chukchi Sea, new Arctic Ocean lease sales — which require extensive government preparation and costs — would likely be unsuccessful," Epstein said.

In explaining why Shell and Statoil were not given permission to retain their leases beyond 10 years, the Interior Department statement said that the companies "did not demonstrate a reasonable schedule of work for exploration and development."

Epstein praised the move, saying, "We applaud Interior's decision not to continue discussing extensions of their existing leases with Shell and other Arctic Ocean leaseholders."

The existing leases in the Beaufort and Chukchi seas will expire in 2017 and 2020, respectively.

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