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Shell Oil gets tentative Arctic offshore drilling green light from Feds

Jill Burke
File photo

On Thursday the Bureau of Ocean Energy Management, Regulation and Enforcement approved a 2012 Beaufort Sea exploratory drilling plan for Shell Offshore, Inc., a decision long awaited by the oil company, which saw its plans put on hold in the regulatory aftermath of the Gulf of Mexico's Deepwater Horizon oil spill in April 2010.

"The conditional approval of our Plan of Exploration is welcome news and adds to our cautious optimism that we will be drilling our Alaska leases by this time next year," said Curtis Smith, a spokesperson for Shell's Alaska operations.

Shell's plans in the Beaufort Sea call for drilling up to four exploratory wells over two years. The company is also pursuing drilling along Alaska's western Arctic Coast in the Chukchi Sea under a separate permit. 

Alaska's congressional delegation heralded the announcement. Sens. Lisa Murkowski and Mark Begich welcomed the decision, with a prepared statement from Begich's office calling it a "needed shot in the arm for Alaska's long-term economic good health." Rep. Don Young said BOEMRE's green light was "an important development" for Alaska:

I have always said that with less oil flowing through the trans-Alaska pipeline and North Slope production declining, it's crucial to Alaska's economic future that we start developing new areas in Alaska. Shell has invested billions of dollars and worked very hard with both state and federal officials in developing a plan to drill offshore in Alaska. While today's decision by BOEMRE is a welcome one, I remain cautiously optimistic that the Obama Administration will issue the necessary permits and authorizations needed in order for Shell to start drilling on time a year from now.

Meanwhile, drilling opponents who maintain too little is known about the Arctic marine environment and of the ability to clean up an oil spill in the region, are not pleased. A press release issued jointly by more than a dozen groups opposed to offshore Arctic drilling -- including the Sierra Club, Northern Alaska Environmental Center, Alaska Wilderness League, Oceana and the Natural Resources Defense Council -- blasted the federal decision, with one group accusing the government of putting Alaska's Arctic environment "on thin ice."

"The toxic pollution and noisy disturbance from the exploration wells threaten refuge resources dependent upon marine and nearshore estuary waters, as well as surrounding coastal habitats so vital to polar bears, migratory birds, caribou, Alaska Native subsistence, and recreation," said Pamela Miller, a spokesperson with the Fairbanks-based Northern Alaska Environmental Center.

"Our preeminent wilderness refuge deserves better care than the offshore agency has shown," she added, referring to the threat her group believed that Shell drilling posed for the Arctic National Wildlife Refuge.

Rebecca Noblin, Alaska's director for the Center for Biological Diversity, accused the Obama administration of "rubber-stamping" Arctic offshore drilling despite recommendations by the president's own oil spill commission, appointed in the wake of the Gulf spill.

In a prepared statement, BOEMRE director Michael Bromwich said the federal decision was based on the "best scientific information available" on Arctic energy exploration and development.

"We will closely review and monitor Shell's proposed activities to ensure that any activities that take place under this plan will be conducted in a safe and environmentally responsible manner," Bromwich added.

Shell spokesman Smith said the company had worked to "build confidence" in its Arctic explorations and stood ready "to deploy the most robust Arctic oil spill response system known to industry.

"Shell has shown that our oil spill response capability exceeds our calculated worst-case discharge volume for the wells being proposed," he added. 

Precautions Shell is pursuing include designing an "oil spill capping system, which is designed to capture hydrocarbons at the source in the extremely unlikely event of a shallow water blowout," according to Smith.

Those precautions must have impressed federal regulators. Thursday's announcement comes on the heels of a statement by Adm. Robert Papp, commander of the U.S. Coast Guard, to Congress that his branch of the military had "zero" capability of cleaning up an oil spill in icy Arctic waters.

Shell's drilling plan is not, however, entirely free from potential obstacles. Before any drilling takes place, the permit from BOEMRE requires Shell to also obtain permits from the Environmental Protection Agency, the U.S. Fish & Wildlife Service, and the National Marine Fisheries Service.

In making its permitting decision, "BOEMRE found no evidence that the proposed action would significantly affect the quality of the human environment," according to a press release from the agency, which notes it relied in part on new information about energy development in the Arctic released in a June 2011 report from the U.S. Geological Survey.

Contact Jill Burke at jill(at)alaskadispatch.com