Bloomberg News

Shell Spill-Plan Approval Advances Its U.S. Arctic Drilling

February 28, 2012

(Updates with the environmentalists comment in final paragraph.)

Feb. 17 (Bloomberg) -- Royal Dutch Shell Plc won U.S. approval for its oil-spill response plan in the Chukchi Sea, bringing the company closer to drilling off the north coast of Alaska after a five years of preparation.

Shell must obtain drilling permits from the Interior Department’s Bureau of Safety and Environmental Enforcement to start work as early as July. The company also needs U.S. Fish and Wildlife Service and National Marine Fisheries Service permission for “incidental” disruption of polar bears, walrus, whales and seals.

Shell, which has spent about $4 billion on leases, seismic studies and research of Arctic mammals since acquiring access to the Beaufort Sea in 2005, is seeking to drill as many as five wells this year in a region with an estimated 26.6 billion barrels of oil. The exploration plans for both Chukchi and Beaufort seas were approved last year.

“Approval of our Chukchi Sea oil-spill response plan is another major milestone on the path to drilling in the Alaska offshore this summer,” Pete Slaiby, Shell’s Alaska exploration manager, said in an e-mail. “We will continue to work with regulators and the Department of Interior to achieve the final permits needed to begin drilling in July.”

Environmental Opposition

Exploration by Shell in the region was delayed after environmentalists and Eskimos filed lawsuits to block permits, and by the administration of President Barack Obama after BP Plc’s Gulf of Mexico spill in April 2010.

Environmental groups including the New York-based Natural Resources Defense Council oppose the drilling, saying more research is needed to identify areas that need to be protected, such as habitats for bowhead whales. The NRDC, Sierra Club and residents in Point Hope, a North Slope village close to the drilling sites, sued to challenge a lease sale that gave Shell access to the Arctic waters.

“Drilling is a dirty and dangerous business and is a threat to the fragile environment of America’s Arctic Ocean,” Cindy Shogan, the executive director of the Washington-based Alaska Wilderness League, said today in an e-mailed statement. “President Obama has the ability to stop the next oil spill disaster before it happens by not granting Shell’s final drilling permits.”

--Editors: Steve Geimann, Daniel Enoch

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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