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SHELL INCHES CLOSER TO DRILLING IN CHUKCHI SEA@

Associated Press Published: February 17, 2012
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SHELL INCHES CLOSER TO DRILLING IN CHUKCHI SEA@<

(For use by New York Times News Service clients)@<

By PUNEET KOLLIPARA@

C.2012 Hearst Newspapers@

WASHINGTON — The Interior Department said Friday it had approved Shell Oil Co.'s plan to respond to potential oil spills in the Chukchi Sea, bringing the company closer to drilling off the northern coast of Alaska. Shell hasn't yet received approval of its Beaufort Sea oil-spill response plan and must still get permits for each well it wants to drill. The Bureau of Safety and Environmental Enforcement said it also must inspect and approve various pieces of equipment Shell will use for the effort.

Royal Dutch Shell's Houston-based arm, which also has received approval of its Beaufort and Chukchi exploration plans, hailed the spill-response plan's approval as a major step toward starting to drill sometime in July. Shell wants to drill six exploratory wells over the next two summers in the Chukchi Sea in shallow waters about 70 miles from the coast. It must stop drilling 38 days before when ice starts building up in the water, typically around Nov. 1.

Shell has spent over $4 billion on its ambitious goal to drill in the Beaufort and Chukchi seas since 2005, when it first started acquiring leases. But litigation and appeals of various stages of Shell's application have delayed its plans.

"It's been a long process, perhaps a torturous process, for Shell," Sen. Lisa Murkowski, R-Alaska, said earlier this month. "I think it's safe to say they are close to the end."

Environmental and Alaskan native groups have opposed the drilling. They contend that no proven technology exists to clean crude from the icy waters or to contain a spill and that scientific gaps remain on how drilling would affect ecological, subsistence and cultural resources such as wildlife.

Pete Slaiby, Alaska exploration manager for Shell, said in an email his company's drilling plans "will continually be guided by our extensive Arctic expertise, solid scientific understanding of the environment and world-class capabilities."

Deputy Interior Secretary David Hayes said Shell had revamped its response plan so it could handle a spill five times bigger than under a previous proposal.

James Watson, director of the federal offshore safety bureau, said the spill plan builds on lessons from the 2010 Deepwater Horizon oil spill. He said Shell would have tougher preventative measures, such as stronger blowout preventers; systems to cap and contain a blowout; numerous vessels nearby; and an extra rig that could drill a relief well.

The officials said the Coast Guard, with its own vessels nearby and presence on land, would oversee spill response.

"It's truly a phenomenal collection of capability," Hayes said.

Representatives of environmental groups such as Ocean Conservancy said they weren't convinced.

Andrew Hartsig, the group's Arctic director, pointed to a recent blowout of the Spanish company Repsol's onshore exploratory well on Alaska's North Slope in arguing that Interior's optimism about Shell's plan is misplaced.

Although onshore, the Repsol incident "illustrates an important point that even major companies experience accidents," Hartsig said.

The Interior Department also defended "the extensive information that already exists on the Arctic" and said it was launching a program where companies that explore and drill there gather more data to inform future policy decisions. Hartsig said he'd still like to see a more comprehensive science plan.

But he offered cautious praise for another new plan announced by Interior for assessing and managing areas that "support special wildlife, land or water resources, as well as areas important for the subsistence and culture of local communities."

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(Email: puneet(at)hearstdc.com)