Shell Oil approved to drill off north coast of Alaska

The Interior Department has given Shell Oil approval to drill oil exploration wells in two leaseholds in the Beaufort Sea, the first time in more than a decade that drilling will be done in this area off the north coast of Alaska.

Shell Alaska vice president Pete Slaiby hailed the decision as "another positive step towards the ultimate goal of drilling in 2010."

But environmental groups criticized the move. "There is no safe way to drill in the Beaufort Sea," said Athan Manuel, director of lands protection at the Sierra Club. "Cleaning up an oil spill in the Arctic's broken sea ice is next to impossible, and where this is drilling, there are oil spills." He said a spill could threaten polar bears and bowhead whales.

The two leases were obtained by Shell in 2005 and 2007. The sales are not affected by a recent court decision that sent the current leasing program back to the Interior Department's Minerals Management Service for additional analysis.

Shell plans to drill two exploration wells in the far western area of Camden Bay during the July to October 2010 open water drilling season using a drillship retrofitted for operations in arctic Outer Continental Shelf waters. The leases are about 16 and 23 miles north of Point Thompson, Alaska. The company still needs some further permits.

"The Minerals Management Service is committed to responsibly developing offshore energy resources," said MMS director Liz Birnbaum said in a statement Monday. "Now that we have approved Shell's plan and reached this important milestone, we will continue to work with Shell to ensure that all activities are conducted in a safe and environmentally responsible manner."

"These opportunities in the Beaufort Sea together with other opportunities in the Chukchi Sea have the potential to positively and materially impact North Slope Borough residents, the State of Alaska and the nation," Shell's Slaiby added.

But the Sierra Club's Manuel said, "Instead of drilling for more dirty oil, we can shift to clean energy that will create jobs, combat global warming, and keep our wildlife and wild places intact."

Arco explored two sites in the Beaufort Sea in the late 1990s, but did not develop either one. Arco was later purchased by BP, which is still considering development. Last year BP acquired three exploration licenses in the Canadian portion of the Beaufort Sea.