Interior Department approves Shell’s initial drilling in Arctic

“Shell’s applications for permits to drill into potential oil reservoirs remain under review, and Shell will not be authorized to drill into areas that may contain oil unless and until the required spill containment system is fully certified, inspected and located in the Arctic,” said James Watson, director of Interior’s Bureau of Safety and Environmental Enforcement (BSEE).

ADVERTISEMENT
The company is still seeking certification of the containment system from the U.S. Coast Guard.

Shell’s long-planned, long-delayed project in the Chukchi and Beaufort seas off Alaska’s northern coast has faced intense scrutiny from regulators and politicians alike.

GOP lawmakers have cited the project to bash what they allege is federal red tape holding back more aggressive U.S. energy development.

The Republican convention in Tampa, Fla., has featured a parade of GOP officials accusing President Obama of stifling U.S. drilling.

But Salazar said Thursday’s announcement that Shell may proceed in the Chukchi wasn’t about political optics.

“This has nothing to do with whatever is happening in Florida,” he said on the call. “It has nothing to do with any political motivation.”

BSEE is giving Shell the go-ahead to conduct preparatory work, including creation of a so-called mudline cellar, which BSEE notes is needed for placement of a blowout-preventer, a failsafe device to control runaway wells.

The company may also begin drilling to set pipes known as casing strings to a depth of around 1,400 feet below the sea floor.

The approval won praise from Alaska’s senators, who are both strong advocates of Shell’s project, even though it remains unclear whether the company will get a green light to fully conduct exploratory drilling this year.

Murkowski called it a “positive step.”

“While we would all like to see a discovery this summer, the most important thing is for Shell to continue to make progress and demonstrate once again that Arctic drilling can be done safely,” she said.

The company faces a tight window — until Sept. 24 — to conduct drilling into oil-bearing zones in the Chukchi Sea.

The deadline is based on the anticipated return of sea ice to the region, and Shell has requested an additional two weeks beyond Sept. 24 to drill into the oil-bearing zones in the Chukchi.

“Ice forecast is indicating just under two more weeks of open water,” a spokeswoman told Bloomberg. “Because we could remain in the open water longer, it could also potentially allow us to drill even in the hydrocarbons zone past the Sept. 24 date.”

Salazar declined to say whether Shell might be granted more time to conduct the drilling into the oil-bearing region of the Chukchi.

“It is absolutely premature to even address the issue today,” he said, noting Shell has yet to receive certification for its Arctic Challenger containment barge.

He also did not address whether Shell will be able to conduct activities in the Beaufort this year. The company has a longer drilling window, until the end of October, in the Beaufort.

The company had initially hoped to drill five wells in Arctic waters this year but has faced numerous setbacks.

Environmentalists criticized the limited drilling approval announced Thursday.

“BSEE's interim decision to approve initial drilling in the Chukchi Sea is disappointing,” said Andrew Hartsig, the Arctic program director for the Ocean Conservancy.

“Shell will be authorized to drill approximately 1,400 feet down into the ocean floor even though its oil spill containment barge has not been certified and is still two weeks away from the drilling site. Secretary Salazar claims he is holding Shell to the highest standards, but today's decision tells a much different story,” he said.

But Salazar said Interior is committed to taking a tough stance with Shell on safety. “In terms of our approach, it has not changed at all. We are holding Shell’s feet to the fire,” he said.


More in Energy & Environment

Chevron cancels Arctic drilling plans

Read more »