Shell spent billions of dollars and significant political capital to obtain the licenses and approvals required to explore for oil and gas off the coast of Alaska. A US appeals court recently ruled the original lease sale flawed, which threw new obstacles in the company’s path toward offshore Alaskan oil and gas development.

The recent Ninth Circuit Court decision against the Department of the Interior raises substantial obstacles to Shell’s plans for drilling in offshore Alaska. As a result, Shell has decided to stop its exploration programme for Alaska in 2014. “This is a disappointing outcome, but the lack of a clear path forward means that I am not prepared to commit further resources for drilling in Alaska in 2014,” [CEO] van Beurden said. “We will look to relevant agencies and the Court to resolve their open legal issues as quickly as possible,” Shell said in a statement.

Alaskan Senator Lisa Murkowski was sympathetic to Shell’s plight and called on the Obama administration to streamline regulatory processes that have held back Arctic oil and gas development investments.

“Just this week, the president claimed that he was committed to an ‘all-of-the-above’ energy plan, but clearly that is not the case in Alaska. The fact is that all of the increase in oil production the president touts has come from state and private lands – not on federal lands, and certainly not from Alaska. Instead of taking credit that he does not deserve, the president should be fixing the very real problems he has created in our state.

“Companies willing to invest billions of dollars to develop our country’s resources must have confidence that the federal agencies responsible for overseeing their efforts are competent and working in good faith. I’m not convinced that has been the case for Alaska,” the senator said in a statement.