In a major setback for Arctic drilling, the Obama administration cancels two oil lease sales

Citing Shell’s decision to indefinitely cancel plans to explore for oil in the Chukchi Sea after drilling an initial, unsuccessful test well, the Interior Department late Friday announced it was canceling two Arctic ocean oil lease sales scheduled for 2016 and 2017. The agency also cited a lack industry nominations of specific areas of exploration interest as a reason for not going forward.

The sales canceled involved one lease in the Chukchi Sea and another in the Beaufort Sea, to the northwest and north of Alaska, respectively.

“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 in a statement. The move represented a second major setback to Arctic oil drilling plans that as recently as a month ago had seemed to be moving forward smoothly.

Environmental organizations, which had widely protested Shell’s plans and lambasted the Obama administration for approving them, quickly applauded the news Friday.

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