Why Shell Quit Drilling in the Arctic

In late July, when Ann Pickard, Shell's top executive for the Arctic, explained the economics of drilling in the Chukchi Sea, she readily acknowledged that if oil prices remained below $50 a barrel, the off-shore adventure would be for naught. At $70, Chukchi oil would be "competitive," she told Bloomberg Businessweek, and at $110--a reasonable projection, according to the company's economists--it would be a huge winner. She was talking about prospective prices 15 years from now. Well, in recent weeks, Shell appears to have lost some of its bravado about where prices will be in 2030--according to a person familiar with the company's thinking. Otherwise, it wouldn't have given up altogether on the Chukchi... Possibly more significant than the immediate environmental activism is Shell's concern about who will oversee Arctic regulation come January 2017. In August, Hillary Clinton made her first major break with President Obama over the environment, announcing that she opposed Arctic drilling. "Given what we know, it's not worth the risk," Clinton said on Twitter. Despite the candidate's current struggle to shake off primary foe Senator Bernie Sanders, Shell may fear that a Clinton presidency would doom its chancy northern exploration.