Feds greenlight Arctic drilling

The Obama administration gave its stamp of approval Monday to Royal Dutch Shell’s plan to drill for oil and natural gas as soon as this summer in the Arctic Ocean north of Alaska.

The Interior Department’s Bureau of Ocean Energy Management (BOEM) approved the drilling plan, drawing intense criticism from environmental groups that say the risk of a spill or other disaster is too high.

{mosads}The decision is a major win for the oil and natural gas industry, and it comes as the Obama administration works to demonstrate a balanced approach to energy production that takes into account both environmental and economic factors.

The Arctic authorization came with five pages of conditions the company must follow to protect the environment, wildlife and nearby residents. Shell must also obtain other necessary approvals, including the actual permits to drill.

The company’s years-long quest to drill in Alaska’s Chukchi Sea is controversial, especially after a disastrous 2012 drilling attempt led to a rig running aground on a nearby island during a fierce storm.

“We have taken a thoughtful approach to carefully considering potential exploration in the Chukchi Sea, recognizing the significant environmental, social and ecological resources in the region and establishing high standards for the protection of this critical ecosystem, our Arctic communities, and the subsistence needs and cultural traditions of Alaska Natives,” BOEM Director Abigail Ross Hopper said in a statement.

“As we move forward, any offshore exploratory activities will continue to be subject to rigorous safety standards,” she added.

The Chukchi, federal officials estimate, contains 15 billion barrels of recoverable oil and 78 trillion cubic feet of recoverable natural gas.

The conditions attached to the approval largely mirror regulations BOEM proposed earlier this year for Arctic drilling, including mandating a backup rig be kept nearby to drill a relief well in the case of a blowout and being able to contain spills through purely mechanical means.

Those proposed rules, along with the new conditions for Shell’s permit, reflect the lessons regulators learned from Shell’s 2012 attempt. The approval allows Shell to drill up to six exploratory wells in an area about 70 miles off Alaska’s northwest corner.

Shell spokesman Curtis Smith said the approval “is an important milestone and signals the confidence regulators have in our plan.”

He added that “it’s imperative that the remainder of our permits be practical, and delivered in a timely manner,” and said Shell would continue to prepare to drill this summer.

Environmentalists quickly slammed the agency’s approval on Monday.

Green groups have been working on various fronts to block Shell’s drilling plan, saying the unique, treacherous conditions of the Arctic make drilling too risky. They also argue that Shell has a poor track record in the area.

“Once again, our government has rushed to approve risky and ill-conceived exploration in one of the most remote and important places on Earth,” Susan Murray, deputy vice president for the Pacific at the group Oceana, said in a statement.

“Shell has not shown that it is prepared to operate responsibly in the Arctic Ocean, and neither the company nor our government has been willing to fully and fairly evaluate the risks of Shell’s proposal,” she added.

“We can’t trust Shell with America’s Arctic,” added Cindy Shogan, executive director of the Alaska Wilderness League.

“As we all remember, Shell’s mishaps in 2012 culminated with its drilling rig running aground near Sitkalidak Island, Alaska. Events such as these demonstrated to the nation that drilling in the Arctic is reckless and irresponsible and that no oil company should develop there,” she said.

Green groups’ tactics to stop Shell’s drilling plans have included boarding a drilling rig traveling through the Pacific Ocean and using kayaks to block the Port of Seattle, where Shell plans to store its equipment.

Opponents scored a victory this month when Seattle officials ruled the company that plans to host Shell’s operations there would need a new permit for the rigs.

Sen. Lisa Murkowski (R-Alaska), chairwoman of the Senate Energy and Natural Resources Committee, welcomed the permit Monday, but said the administration needs to do more to make sure Shell can drill this year, including seven more minor approvals.

“With this latest milestone, I am cautiously optimistic and stand ready to continue working with the agencies to ensure exploration is conducted safely for the maximum benefit of Alaskans and our nation,” she said.

White House press secretary Josh Earnest, meanwhile, seemed caught off guard when reporters asked him about the Arctic drilling plan during Monday’s daily press briefing.

“I’m not aware of that breaking news,” Earnest told reporters who brought it up.

“You just barked out ‘Arctic drilling,’ so why don’t we … find out what the announcement is, and we’ll get back to you,” he said.

Other drillers are keeping a close eye on Shell’s lease as they weigh whether they should propose to drill in the United States’ portion of the Arctic, which has not seen drilling in decades. 

ConocoPhillips Co., Statoil and Chevron Corp. all have leases in the Arctic that have gone unused.

— This story was updated at 7:30 p.m.