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Seattle ruling won’t derail Shell’s Arctic quest, executive vows

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Screen Shot 2015-05-01 at 17.04.22Seattle ruling won’t derail Shell’s Arctic quest, executive vows

Posted on May 5, 2015 | By Jennifer A. Dlouhy

HOUSTON — A ruling by the city of Seattle may throw a wrench into Shell’s Arctic drilling plans, but it won’t delay the company’s plans to bore two new wells in the Chukchi Sea this summer, a top executive vowed Tuesday.

Although “it’s not my preferred approach . . . we have backup plans,” said Ann Pickard, Royal Dutch Shell’s executive vice president for the Arctic. “I don’t think this will delay the program.”

At issue is Seattle Mayor Ed Murray’s ruling this week that the city port must obtain a new land-use permit to serve as a home base for Shell’s Arctic drilling rigs and support vessels. Seattle’s Department of Planning and Development concluded that Shell’s plans to moor its ships at the port’s Terminal 5 — before sending them north to Alaska — fall outside the scope of the existing permit and underlying environmental analysis authorizing the site to function as a cargo terminal.

It could take weeks to obtain new permits. But Pickard insists that won’t derail Shell’s Arctic quest.

“The best place we figured out was Terminal 5, and we would like to see that come through,” Pickard said in an interview on the sidelines of the Offshore Technology Conference. “If that doesn’t work, there are other alternatives, but that is the ideal location, and it will provide a lot of jobs and income for Seattle, and I think it is the right way to go.”

Pickard did not volunteer specifics, but Shell’s contracted Polar Pioneer drilling rig is now moored at Port Angeles, Wash. And its contracted drillship Noble Discoverer is en route to the area. During its last round of Arctic drilling, in 2012, Shell briefly stationed its rigs at Dutch Harbor, Alaska, but most of its work to repair and refurbish drilling rigs was conducted at the Seattle port.

“It’s unfortunate,” Pickard said of the recent Seattle setback. “There are other ports that would like us to be there, and they continue to be supportive.”

In Seattle, Shell’s Arctic quest is clashing with the area’s environmental sensibilities. Environmentalists have raised objections to using Shell as a home base for an Arctic drilling campaign they say jeopardizes the area’s fragile ecosystem and risks unleashing more fossil fuels that contribute to climate change.

Activists have been planning to greet the 400-foot-long Polar Pioneer when it moves to the Port of Seattle, with some threatening to use a flotilla of kayaks to box the ship in.

Shell has spent some $6 billion in its latest quest for Arctic oil but its brief drilling program in 2012 left it with just one half-finished well in the Chukchi Sea. Although Pickard counts that initial “top hole” well as one of “several successful achievements in 2012″ the endeavor was marred by mishaps, including the grounding of its Kulluk drilling rig on an Alaskan island later that year.

Shell is planning to return to its same target, the Burger prospect about 70 miles off the Alaska coast. Although oil prices are relatively low now _ reaching above $60 per barrel in trading Tuesday _ the company has its eye on potential production years from now.


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