Shell's Beaufort exploration plan approved

The US Bureau of Ocean Energy Management, Regulation, and Enforcement conditionally approved Shell Offshore Inc.’s revised exploration plan to drill up to four shallow-water wells in the Beaufort Sea beginning in July 2012. Shell acquired the leases in sales held in 2005 and 2007.

Approval of the revised plan follows BOEMRE’s completion of an environmental assessment. Conditions include a requirement for Shell to obtain all necessary permits from the US Environmental Protection Agency, US Fish and Wildlife Service, National Marine Fisheries Service, and other agencies.

The plan covers anticipated timing of the operator’s activities, information about drilling vessels, the location of each planned well, and other information.

BOEMRE said that in addition to gaining approval of an exploration plan, a company must submit drilling permit applications for every well, each of which is analyzed based on the well’s unique characteristics, and must comply with safety and environmental standards. These standards address issues ranging from well design and workplace safety to requiring that operators show they can deal with blowouts and worst-case discharges.

The environmental assessment considered scientific information that had not been previously available for consideration or analysis, including the US Geological Survey’s June 2011 report, “An Evaluation of the Science Needs to Inform Decisions on Outer Continental Shelf Energy Development in the Chukchi and Beaufort Seas, Alaska”, BOEMRE said.

It said that based on its review of the plan, new information that included extensive input from stakeholders, and previous National Environmental Policy Act analyses, it found no evidence that the proposed action would significantly affect the quality of the human environment. Therefore, BOEMRE determined that an environmental impact statement (EIS) was not required and issued a finding of no significant impact.

BOEMRE said it received Shell’s proposed exploration plan on May 4 and deemed it submitted on July 5. A plan is deemed “submitted” once all supporting materials and documentation have been provided and have met regulatory requirements. BOEMRE said it has 30 calendar days to analyze and evaluate an exploration plan once it is deemed submitted.

Industry reacts

The American Petroleum Institute welcomed the news, but a spokesman cautioned that it was a small step in a multi-year permitting process for Shell.

"The slow pace and frequent hurdles to permitting projects like Shell's has cost jobs, revenue, and energy production," said Richard Ranger, API senior policy advisor.

US Sen. Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee's ranking minority member, emphasized Shell still needs approvals from other federal agencies. The company also awaits BOEMRE's decisions on a Chukchi Sea exploration plan, she said.

Contact Nick Snow at nicks@pennwell.com.

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