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Lawsuit threats loom over latest approval for Shell's Alaska drilling

Alex DeMarban
Courtesy: Shell Oil Co.

Shell Oil Co. appears to be steaming toward a summer of drilling off Alaska's shoreline, but environmental groups that have challenged the company's every move warn that they still hold important cards that could derail the plans.

The company cleared its latest regulatory hurdle on Friday, winning approval from the Bureau of Safety and Environmental Enforcement for a spill response plan in the Chukchi Sea. That decision comes in the wake of other federal endorsements won by the company, including air permits from the Environmental Protection Agency for the Noble Discoverer drill rig.

Shell drilled exploratory wells safely in Alaska's Arctic waters in the 1980s, discovering oil and gas, the company says. Development plans were put off as oil prices tanked. Now, the company hopes to drill more exploratory wells this summer in both the Beaufort and Chukchi seas, where a massive treasure is said to wait. Alaska's outer continental shelf is estimated to contain 27 billion barrels of oil and more than 100 trillion cubic feet of natural gas. For the sake of perspective, 16 billion barrels have flowed down the trans-Alaska pipeline since 1977.

A find might boost the dwindling flow in the trans-Alaska pipeline and create thousands of new jobs, the company said in a release issued Friday. But environmental groups have battled every permit, noting that no technology exists to clean oil from ice-clogged waters and that not enough is known about the marine mammals and other sea life that would be threatened by a spill.

However, in recent, after years of delay, the company's drilling plans suddenly seem to be on the move.

"There is clearly more certainty with the regulatory process than we've had in previous years," said Pete Slaiby, Shell's Alaska operations manager, in a recent interview with the Associated Press.

An official with Oceana, an environmental group that has fought the company's plans, warned that the rapid progress could backfire for the company. That's because key permits have only been challenged in the regulatory arena. Some approvals can still be taken to court, including the EPA's air permit for the Noble Discoverer or the company's Chukchi Sea exploration plan, said Susan Murray, senior director of the Pacific for Oceana, a group founded by actor Ted Danson.

Already, in federal court in Anchorage, Shell is locking horns with Alaska Native and environmental groups, including Oceana, over the federal government's 2008 lease sale in the Chukchi, when Shell snatched up many of its offshore leases.

"One of the outcomes of this headlong rush is that the conversation could shift from policy makers to courtrooms," Murray said.

Also heading to court might be this latest approval for the company's oil-spill response plan in the Chukchi, Murray said.

In the Friday news release, Slaiby called the company's Arctic oil spill response fleet "second to none." The plan includes assembling a round-the-clock near-shore and onshore fleet, working with the U.S. Coast Guard to test roles and responsibilities and specially built capping and containment systems.

The capping stack would be nearby during drilling and could be lowered over a spill, as BP did during the Macondo blowout, the Associated Press reported. The Associated Press story noted that the stack is being built in Louisiana and will be tested in Washington or Alaska waters.

Such testing should have been done before the permit was approved, Oceana officials maintain.

The only government test of an oil spill in waters came in 2000 off Alaska's coast, and it failed, contends Chris Krenz, Arctic project manager for Oceana. Here's a video of the test, which the group says was acquired from the state of Alaska under a Freedom of Information Act. In one part of the test, a boom meant to contain oil stretches across the water, but struggles to contain chunks of ice.

The approval process is backwards, Krenz said. "They have the dogsled in front of the dog," he said.

The Bureau of Ocean Energy Management has responded to environmentalists' concerns by proposing limited development, including shortened summer drilling seasons that must stop in late September before the ice moves in.

Shell still awaits other permits to drill off Alaska. And Interior Secretary Ken Salazar said Friday morning that the agency will still inspect individual equipment for the response plan before drilling can commence, including the capping stack.

Contact Alex DeMarban at alex(at)alaskadispatch.com.