MMS approves Shell unit's exploration plan for Chukchi Sea

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Dec. 8 -- The US Minerals Management Service conditionally approved Shell Gulf of Mexico Inc.’s plan to drill three exploration wells in the Chukchi Sea off Alaska, US Interior Secretary Ken Salazar said on Dec. 7.

“By approving this exploration plan, we are taking a cautious, but deliberate, step toward developing additional information on the Chukchi Sea,” Salazar said. The Royal Dutch Shell PLC unit paid $2.1 billion for leases there during US Outer Continental Shelf Lease Sale 193 in 2008, which was part of the 2007-12 OCS leasing plan.

The approved exploration plan will allow Shell to drill as many as three exploration wells during the July-October open-water drilling season, Salazar said. It plans to use one drillship, one ice management vessel, an ice-class anchor handling vessel, and oil spill response vessels. The closest proposed drill site is more than 60 miles from shore and 80 miles from Wainright, Alas.

“Our approval of Shell’s plan is conditioned on close monitoring of its activities to ensure that they are conducted in a safe and environmentally responsible manner,” said Salazar. “These wells will allow [the US Department of the Interior] to develop additional information and to evaluate the feasibility of future development in the Chukchi Sea.”

The leases are not in a part of the 5-year OCS plan, which DOI is reviewing following a federal court’s ruling that MMS did not adequately evaluate impacts from development in deeper waters off Alaska’s coast. Salazar’s decision on the rest of the plan is forthcoming, DOI said.

‘Encouraging sign’
US Sen. Lisa Murkowski (D-Alas.), the Energy and Environment Subcommittee’s ranking minority member, welcomed the news. “This is progress. Today’s announcement from MMS is an encouraging sign that Alaska’s oil and gas resources can continue to play a major role in America’s energy security,” she said.

While MMS’s action is a step forward, Shell is in its fourth year of waiting for air permits from the US Environmental Protection Agency to explore off Alaska’s coast, Murkowski continued. “Significant hurdles remain before exploration can advance in the Chukchi,” she said.

Alaska’s other US senator, Democrat Mark Begich, also approved of MMS’s decision but added that the company needs to get other federal approvals as well as EPA’s before it could begin to drill exploratory wells next summer. “I will continue to work with Interior Secretary Salazar to include protection that address concerns Alaskans and the rest of the nation have to develop these resources in a responsible manner,” Begich said.

Environmental and some Alaska Native groups immediately criticized the action. “Oil and gas development is spreading rapidly across the Arctic,” said Erik Grafe, an attorney with Earthjustice. “Before moving forward, we need to develop the missing science about the Arctic Ocean and the impacts of drilling and a better comprehensive plan for protection of the Arctic.”

“The proposed oil and gas activities affect the very foundations of who we are as individuals and as a people,” said Caroline Cannon, president of the Village of Point Hope on Alaska’s North Slope. “We have a right to life, to physical integrity, to security, and the right to enjoy benefits of our culture. For this, we will fight; we just hope not to die as a people during the process.”

Contact Nick Snow at nicks@pennwell.com.

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