The Obama administration has closed the door on oil drilling in the Arctic Ocean off the shores of Alaska.
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 announcement comes just weeks after Royal Dutch Shell said it would cease exploration in the Chukchi and Beaufort seas after spending upward of $7 billion on Arctic exploration. The company cited disappointing results from a well drilled in the Chukchi and the unpredictable federal regulatory environment.
"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," Interior Secretary Sally Jewell said.
The Interior Department also rejected longstanding appeals by Shell and Statoil, the Norwegian oil giant, to extend existing Arctic leases first obtained during the administration of George W. Bush.
Environmental organizations, which had widely protested Shell’s plans and lambasted the Obama administration for approving them, quickly applauded the news Friday.
Michael LeVine of oceans advocate Oceana said: "Secretary Jewell's decisions today are consistent with the law as well as economic and environmental realities."
But the decisions are a sharp blow to the Alaskan economy, which has been declining because of the fall in oil prices and the state’s slumping oil production.
Senator Lisa Murkowski of Alaska, a Republican, called it a “stunning, shortsighted move,” adding that it was “the latest in a destructive pattern of hostility” displayed by the Obama administration toward the energy industry in the state.