Pete Slaiby, Shell Exploration and Production

My name is Pete Slaiby and I am here on behalf of Shell Exploration and Production. As you might imagine by the 2.2 Billion we have spent on leases here in both the Beaufort and Chukchi Seas, we are strong supporters of OCS exploration in Alaska and also the new five-year plan that includes increased access to additional offshore OCS acreage here.

When I started in this industry 29 years ago, we imported 30% of our energy needs. We now import 65%. I don’t know how that can be acceptable to anyone in this room.

It’s our belief, as well as that of the MMS, that the Alaska offshore is home to some of the most prolific, undeveloped hydrocarbon basins in the world – reserves that would not only fuel Alaska’s economy for decades to come, but oil and gas reserves that would also provide the Nation with much-needed energy security.

We have yet to launch our full exploration program in Alaska but have been busy. We have completed several years of 3D seismic work and spent tens of millions on baseline science. Already, we are creating full-time jobs here as a result of our shovel-ready status. 

All of our work compliments the $300 million the Government has already spent in the Beaufort and Chukchi Seas.

We are now drill-ready. But litigation and a disjointed permitting process have kept us from turning a bit for three years now. That’s frustrating and expensive.

Shell has spent hundreds of millions of dollars attempting to drill again in areas that we have been before – including the Chukchi and Beaufort Seas. Industry has drilled some 30 wells in the US Beaufort, 5 wells in the Chukchi Sea and over a dozen wells in Southwest Alaska without adverse consequences. The majority of those wells were drilled by Shell.

Lately, it’s very en vogue to tell industry to “use it or lose it.” We would make the case that the roadblocks like we are experiencing with the 9^th Circuit Court and regulators have essentially put in place, a de facto moratoria. In other words, we are doing everything we can to use the leases we have.

I do want to share a recent economic study that detailed the potential benefits of OCS development in Alaska. The highlights include:

• 35,000 direct and indirect jobs
• Critical oil to keep the Trans-Alaska Pipeline viable
• Natural gas to underpin the reserves need for an Alaska Gasline to Lower 48

Given the state of the world economy and the hard truth that energy demand will dramatically increase in the years to come, I would make the case that the jobs and potential oil and gas reserves that lie beneath the Alaska offshore are needed more than ever.

Shell believes the offshore could be the next chapter in Alaska’s oil and gas history. And that tapping those potential reserves could prove a bold first step in reducing our reliance on foreign oil and gas.

Thank you.