Shell announced Thursday it is pulling out of drilling in the Arctic Ocean for 2014.
The company cited a federal appeals court decision that found the environmental analysis developed by the Interior Department for Arctic lease sales is seriously flawed.
"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," said Ben van Beurden, Shell's CEO, in a statement.
“We will look to relevant agencies and the Court to resolve their open legal issues as quickly as possible.”
Sen. Lisa Murkowski (R-Alaska) on Thursday said she was disappointed that Shell would not be able to pursue drilling this year.
"I regret to inform my colleagues that we're not going to see the opportunity for exploration up in the Beaufort or the Chuckchi this year," Murkowski said at a Senate Energy and Natural Resources hearing.
Murkowski blamed "the lack of certainty from a regulatory and a permitting perspective from [the] administration" for pushing Shell to make this decision.
"It's very troubling to me," she said.
Green groups, specifically the Alaska Wilderness League, said the announcement came as no surprise.
"Given these recent events, the Department of the Interior should reevaluate its Arctic drilling efforts, including reconsidering Chukchi lease sale 193 through a full new Environmental Impact Statement," said Cindy Shogan, executive director of the wilderness league.
Check out more about the court decision here.