An effort to bring oil rigs to waters off the Alaskan coast took a step forward Monday as the Obama administration granted conditional approval to a plan by Shell Gulf of Mexico to begin exploratory drilling in the Chukchi Sea.
The decision by the Interior Department’s Bureau of Ocean Energy Management removes a major obstacle to Shell’s years-long effort to begin oil and gas operations in U.S. Arctic waters. But the company must still obtain federal and state permits before any drilling can begin.
Shell’s plan calls for drilling up to six exploratory wells in waters off northwestern Alaska, about 70 miles northwest of the coastal village of Wainwright. Studies have suggested the region could hold as much as 30 billion barrels of recoverable oil.
While environmental groups blasted the decision, the tentative approval was widely expected. Shell was awarded federal leases for oil exploration in 2008, and the company has spent an estimated $6 billion in preparations for drilling. The Obama administration has banned drilling in some areas of coastal Alaska while signaling that it intends to honor oil- and gas-lease decisions, assuming the necessary permits are obtained.
BOEM Director Abigail Ross Hopper said the tentative approval was granted after consideration of “significant environmental, social and ecological resources” in the region, and contingent on Shell meeting tougher restrictions intended to prevent spills and leaks.
“As we move forward, any offshore exploratory activities will continue to be subject to rigorous safety standards,” Hopper said.
Shell officials welcomed the decision while acknowledging that additional hurdles remained. The company has been staging equipment in recent weeks in hopes that some exploratory work could begin this summer when the water is ice-free.
“This is a long-term energy project that both we and the federal government agree could deliver critical resources in the face of growing, future demand for oil.” Shell President Marvin Odum said in an email.
Odum said the company was “being held to the highest operating standards,” both for itself and its contractors. “We will continue to take this one step at a time,” he said.
Environmental groups have sought to block any drilling in Alaska’s Arctic waters, citing risks ranking from climate change to a catastrophic oil spill, like the Deepwater Horizon blowout in 2010 in the Gulf of Mexico. Activists pointed to the well-documented problems with Shell’s previous attempts to conduct exploratory drilling in Arctic waters. In 2012, a Shell-owned drilling platform broke from moorings and ran aground off Kodiak Island.
“No company deserves a license to despoil our last pristine ocean and spew massive amounts of carbon pollution into our atmosphere,” said Franz Matzner, director of the Beyond Oil Initiative at the Natural Resources Defense Council, an environmental group. He said the administration’s “wrong-headed decision” would raise the likelihood of catastrophic spills in an area 1,000 miles from the nearest Coast Guard base.
Margaret Williams, director of U.S. Arctic programs for the World Wildlife Fund, said the allowing offshore drilling Arctic drilling would be a backward move for an administration that is seeking to reduce the country’s greenhouse gas emissions.
We have so many better energy choices,” Williams said, “including promising technologies that provide clean ways to power our lives without harming the planet.”
Oil industry experts believe offshore Arctic oil and gas fields contain up to 30 percent of the world’s undiscovered natural gas and 13 percent of its undiscovered oil, a trove vastly larger than the North Sea’s oil and gas reserves.