On Friday, the US Interior Department announced that they would be canceling lease sales for oil companies - such as BP, Exxon, and others - that are seeking to drill in Alaskan waters.
While environmentalists hailed the decision, many Alaskans were angry.
The Interior Department cited a slow global oil market and lack of interest from oil companies as the reason for the change. In 2014, Royal Dutch Shell suspended its operations in Alaskan waters, after overall earnings for the company dropped by 74 percent, and in September Shell declared that they would cease further exploration in the Chukchi Sea.
“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,” Secretary of the Interior Sally Jewell said in a statement.
Not only will the Interior Department be canceling new lease sales, they also will not be extending Shell’s lease for exploration in the region, which was set to expire in 2020. This builds upon plans that President Obama’s administration announced early in the year to declare part of the Arctic National Wildlife Refuge a wilderness restricted from oil drilling.
Environmental groups are pleased with the decision.
"Secretary Jewell's [decision was] consistent with the law as well as economic and environmental realities." Mike LeVine, Pacific senior counsel at ocean advocacy group Oceana, told the Associated Press.
But many Alaskans don’t feel the same way. In conversation with Secretary Jewell regarding the proposed wilderness sanctuary, Gov. Bill Walker remarked, “I need to send you an invoice for the cost of doing business in Alaska, because you are taking away our ability to earn a living.”
The Alaskan state government depends on oil revenue almost exclusively for its income; in 2014, the state took in $5.4 billion from oil revenue. That revenue has gone towards, among other things, funding preventative and curative programs for at-risk Alaskan Native youth.
"[The Department of the Interior] just took real opportunity, significant opportunities that could benefit thousands if not tens of thousands of Alaskans off the table," Senator Dan Sullivan (R) of Alaska told the Associated Press. "That's not going to help the social problems. That's actually going to make them worse."
“Anytime that we’re told what we can’t do and what cannot happen in our state or off our waters by the federal government, it’s very disappointing,” Governor Walker told KTVA Alaska.
Shell is also concerned with the decision, in particular the impact it will have on their ability to make new explorations in Arctic waters, should they choose to do so.
“When it comes to frontier exploration in Alaska, one size does not fit all. We continue to believe the 10-year primary lease term needs to be extended,’ the company told KTVA Alaska in an email.
[Editor's note: The original post incorrectly stated the amount of oil revenue.]