EPA issues new draft air permits for Shell Alaska offshore projects

The US Environmental Protection Agency issued new draft air quality permits on July 1 for Shell Oil Co.’s proposed oil exploration operations in the Beaufort and Chukchi Seas off Alaska.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, July 5 -- The US Environmental Protection Agency issued new draft air quality permits on July 1 for Shell Oil Co.’s proposed oil exploration operations in the Beaufort and Chukchi Seas off Alaska. EPA said it will accept public comments on the draft permits through Aug. 5 as well as hold a public hearing in Barrow on Aug. 4 before deciding whether to issue final permits.

A Shell spokesman said these were draft major permits specifically for the Discoverer drillship, and the company is still awaiting a draft minor permit for its Kulluk conical drilling unit.

He said in an e-mail that Shell appreciates the work EPA’s Region 10 staff did to prepare draft permits for the company’s upcoming Arctic offshore drilling program, and considers their issuance a critical milestone that keeps in motion events that will determine its ability to drill in 2012.

Shell previously received permits from EPA in March and April of 2010, but environmental and other organizations appealed the decision to the agency’s independent Environmental Appeals Board, which overturned them in December.

The permits are required under the Clean Air Act because the Discoverer drillship and supporting vessels are expected to emit more than 250 tons/year of pollutants, which would be limited under the permits, EPA said.

Pollutant reductions
It noted that EPA’s Region 10 office revised the draft permits to address issues raised in the appeal. These include reductions by more than 50% of most key pollutants from levels allowed in the 2010 permits, largely due to a new nitrogen dioxide standard which went into effect after EPA issued the original permits.

“Many years of work have gone into achieving these permits, and the support from Alaska to Washington, DC, has been tremendous,” the Shell spokesman said. “We believe the work we have done to further modify and reduce our air emissions to meet new standards meets the goal of having no impact on the environment or coastal villages.”

The EPA permits assure compliance with air quality regulations, but do not in and of themselves authorize drilling, the air quality regulator emphasized. That decision must come from the US Department of the Interior’s Bureau of Ocean Energy Management, Regulation, and Enforcement, it said.

Alaska officials nevertheless welcomed the news. “We’re cautiously optimistic that after years of effort, [it] has final issued permits that will hold up to the challenges of national environmental organizations,” Gov. Sean Parnell said on July 1. Shell acquired its leases which the permits would cover in 2005, he added.

‘Critical jobs’
The state’s two US senators expressed similar sentiments. “This isn’t a done deal yet, but I’m pleased EPA is moving these permits forward,” said Democrat Mark Begich. “These are critical jobs, and with North Slope production continuing to decline, we have to get to work.”

Republican Lisa Murkowski, the Senate Energy and Natural Resources Committee’s ranking minority member, said that EPA’s announcement was a positive step in what has been a long and frustrating process.

“I’m hopeful that EPA’s process will work this time, and I strongly encourage Alaskans to get involved by submitting comments for the record to the agency, since it is our shared future that is at stake,” she said.

EPA said its Region 10 office is working on two more air quality permits producers are seeking for offshore Alaska exploration during the 2012 and 2013 drilling seasons. Shell has applied for a permit to operate its Kullik vessel in the Beaufort Sea starting next year, and ConocoPhillips has applied for a permit covering oil and gas exploration planned in the Chukchi Sea in 2013, it said.

Contact Nick Snow at nicks@pennwell.com.

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