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Shell exploration in Arctic gets conditional approval

August 4th 6:13 pm | Margaret Bauman Print this article   Email this article   Create a Shortlink for this article

Shell Oil Co.'s plan to begin drilling exploration wells in Alaska's Beaufort Sea in July 2012 was given conditional approval today by the U.S. Bureau of Ocean Energy Management, Enforcement and Regulation, or BOEMRE.

The agency, formerly known as the Minerals Management Service, said the conditional approval of the revised exploration plan came on the heels of the bureau's completion of a site-specific environmental assessment to examine the potential environmental impacts of the plan.

The announcement was greeted with cheers from Alaska's congressional delegation, and much concern from a number of environmental organizations, who said they were studying whether to take legal action. Eric Grafe, an attorney for Earthjustice based in Anchorage, said they had a 60-day window to file litigation.

In a teleconference that followed the BOEMRE announcement Graf and others said Shell's drilling plans should have been subject to a full environmental impact statement, rather than the environmental assessment that the agency did conduct.

Conditions of approval require that Shell obtain all necessary permits from other agencies, including the Environmental Protection Agency, the U.S. Fish and Wildlife Service, and the National Marine Fisheries Service.

"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 Shell spokesman Curtis Smith.

"Shell's Beaufort Sea plan of exploration includes drilling up to four wells over two years in the Beaufort Sea beginning in July of 2012. In a separate plan of exploration, Shell is pursuing a drilling program in the Chukchi Sea that would also commence in 2012. Shell has taken extraordinary steps to build confidence around our exploration program. We stand ready to deploy the most robust Arctic oil spill response system known to industry and, in accordance with the BOEMRE's requirements, Shell has shown that our oil spill response capability exceeds our calculated worst-case discharge volume for the wells being proposed.

"Additionally, Shell remains committed to fabricating an oil spill capping system, which is designed to capture hydrocarbons at the source in the extremely unlikely event of a shallow water blowout," he said. "The capping system will remain staged in Alaska to allow for rapid deployment," Smith said.

Conditions of approval require that Shell obtain all necessary permits from other agencies, including the Environmental Protection Agency, the U.S. Fish and Wildlife Service, and the National Marine Fisheries Service.

Michael R. Bromwich, director of BOEMRE, said the decision was based on the best scientific information available on energy exploration and development in the Arctic.

"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."

Begich called the announcement "fantastic news for Shell, for Alaska's oil and gas industry," and "a welcome shot-in-the-arm for Alaska's long-term economic good health. "I'm confident this will ultimately be the first of many developments to keep oil flowing through Alaska's economic lifeline, the Trans-Alaska oil pipeline," Begich said.

"Development of natural gas in Alaska's coastal waters also is key to our state's long-awaited natural gas pipeline project."

Murkowski called the conditional approval "another positive step forward.

"If this plan is allowed to advance this time, it could help address many of our most pressing challenges, creating tens of thousands of new jobs, generating hundreds of billions of dollars in new tax revenues, reducing our dependence on foreign oil, and improving our trade balance," she said.

Young called the decision 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," Young said.

"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."

Several environmental groups responded critically to the announcement, calling the decision "a dangerous and disappointing leap towards drilling in the remote and fragile waters of America's Arctic Ocean."

The response from environmental groups was far less enthusiastic.

"Today's announcement is proof that all (Interior Secretary Ken) Salazar's promises of reform after the Deepwater Horizon amount to nothing," said Rebecca Noblin, Alaska director with the Center for Biological Diversity. "We are really disappointed. Shell has no capability for responding to an oil spill. Their oil spill response plan is completely unrealistic. They are assuming they can mechanically clean up 95 percent of the oil, which is ridiculous."

"REDOIL, Resisting Environmental Destruction on Indigenous Lands, is in opposition to the exploration activities of Shell Oil which have been approved by BOEMRE," said Robert Thompson, an Inupiat Eskimo resident of Kaktovik and chairman of REDOIL.

"We take this position as a means to protect indigenous culture. The Inupiat culture has thrived for thousands of years. We have a close relationship with the bowhead whales and marine life of our region.

"Climate change is happening. The proposed activities, which lack a credible plan to deal with oil spills, if allowed, can have a devastating effect on our already stressed ecosystem. Our ecosystem and culture should not be put in jeopardy for the profit of a foreign oil giant," Thompson said.

"The Obama administration continues its policy of selling off the environment and through that, Alaska Native peoples, to the highest bidder," said Carole Holley, Alaska program co-director with Pacific Environment. "We know that there's no way to clean up an oil spill in the Arctic. The Department of Interior knows it too. Approving Shell's exploration plan for the Beaufort Sea is a completely irrational decision, driven by industry greed and politicians rather than science and the health of people and the environment."

Pam Miller, arctic program director for the Northern Alaska Environmental Center in Fairbanks, and Nicole Whittington-Evans, Alaska regional director for the Wilderness Society, said Shell's oil drilling risks major spills that could devastate nearby coasts, including the Arctic National Wildlife Refuge, which is roughly a dozen miles away.

"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," Miller said.

"Because Congress and the Obama Administration have not implemented many significant post-BP spill reforms, we are not confident that everything is being done that can be done to prevent major spills in the Arctic, said Lois Epstein, arctic program director for The Wilderness Society in Anchorage.

"To make matters worse, with no coastal zone management program in existence in Alaska to help ensure local input and governmental transparency, and only a limited environmental assessment performed, this approval is entirely premature," Epstein said.

 

Margaret Bauman can be reached at mbauman@alaskanewspapers.com, or by phone at 907-348-2438.

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