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Shell gets final nod to drill in Arctic Ocean

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Screen Shot 2015-08-13 at 11.35.25By Seattle Times staff

Seattle Times news services

WASHINGTON — The federal government Monday gave Shell the final permit it needs to drill for oil in the Arctic Ocean off Alaska’s northwest coast for the first time in more than two decades.

President Obama is ending restrictions on Shell’s drilling in the Arctic Ocean — even as he prepares a trip to Alaska to highlight the dangers of climate change.

The Interior Department, satisfied that Shell can handle any emergencies, is approving the oil company’s request to drill deep enough to hit oil in the waters off the northwest coast of Alaska. Shell is betting it will find a giant pool.

“Now that the required well-control system is in place and can be deployed, Shell will be allowed to explore into oil-bearing zones,” said Brian Salerno, director of the Interior Department’s Bureau of Safety and Environmental Enforcement.

The announcement comes just days after Obama said he plans to visit Alaska at the end of the month to focus on the dangers of global warming. Environmental groups said the president’s decision to open the Arctic Ocean to drilling conflicts with his rhetoric about climate change.

“Science tells us that Arctic oil must stay in the ground, untouched, to avoid adding to the already dire impacts of climate change,” said Cindy Shogan, executive director of the Alaska Wilderness League. “Key species like the walrus are already impacted by the disappearance of Arctic ice.”

The Interior Department originally restricted Shell to drilling only the top sections of wells and not going deep enough to hit oil.

The agency cited Shell’s lack of a capping stack, equipment to shut a well in an emergency.

Shell’s capping stack is on the M/V Fennica, a leased icebreaker that ruptured its hull last month and had to be diverted to Portland for repairs.

The Interior Department said Monday the icebreaker has been repaired and is now in the Arctic, with a capping stack “capable of being deployed within 24 hours.”

Shell is therefore being allowed to drill down into oil-bearing zones in its Burger J well, which is in about 140 feet of water off Alaska’s northwest coast some 70 miles from the village of Wainwright.

The Obama administration’s decision to allow drilling in the Arctic Ocean won praise from the oil and gas industry.

“Many agree that there is huge potential for oil and natural gas in the Arctic, but the only way to prove such resources exist is to actually explore,” said Randall Luthi, president of the National Ocean Industries Association.

The offshore-drilling trade group commended the Obama administration “for the logical decision allowing Shell to safely proceed with exploratory drilling.”

The decision comes four days after Obama released a video previewing his upcoming trip to Alaska. The president didn’t mention the Arctic Ocean drilling in the video, focusing only on climate change.

“Later this month, I’m going to Alaska, and I’m going because Alaskans are on the front lines of one of the greatest challenges we face this century — climate change,” Obama said in his video address.

The Interior Department said Shell will operate under strict requirements, and that in order to protect marine mammals it can’t drill its two wells at the same time because they are within 15 miles of another.

Shell will also need to have trained wildlife observers on board all drilling and support vessels “to minimize impacts to protected species,” the agency said.

The newly modified drilling permit, issued by the Bureau of Safety and Environmental Enforcement, gives Shell a chance to complete its Burger J well before a Sept. 28 deadline to finish the work.

Shell has been drilling the well for more than two weeks. But the safety bureau had limited the company’s work to the top 3,000 feet — short of its target about 8,000 feet down — because critical emergency equipment and the icebreaker used to deploy it were not on hand to safeguard the work.

Shell executives hope to find a multibillion-barrel cache of crude at the site, based partly on information gleaned during drilling decades ago.

After Sept. 28, the company cannot conduct exploratory drilling operations below the bottom of the last stretch of casing — pipe set into the well to stabilize it.

“It’s possible we will complete a well this summer,” said Shell’s Smith. “But we’re not attaching a timeline to the number of feet drilled. Safe, efficient operations will ultimately determine the progress we make.”

The company can do other work until Oct. 31 — including excavating a 20-foot by 40-foot hole at another well, Burger V, 9 miles away. That would provide a foundation for additional drilling in 2016, when Shell has said it intends to return to the region.

Shell had hoped to drill both wells at the same time, but Interior Department regulators ruled in June that existing wildlife protections require a 15-mile buffer zone between simultaneous drilling.

That limitation remains in place.

Environmentalists, who widely praised the Obama administration two weeks ago for imposing new rules capping greenhouse-gas emissions from power plants, blasted the president Monday, saying it was hypocritical for the government to allow the Shell drilling while promoting an agenda of combating climate change.

The approval comes just weeks before Obama will visit “melting glaciers in Alaska,” noted May Boeve, executive director of the climate-activist group

“If this White House is serious about its legacy on climate action,” Boeve said, “it’s time to stop the doublespeak and finally begin aligning the action with the rhetoric.”

Compiled from The Associated Press, McClatchy Washington Bureau (TNS) and the Houston Chronicle

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