Feds: Shell close to nabbing air permit for Alaska

Shell and the EPA are close to developing an essential air quality permit that would represent a major milestone for the company’s plans to drill in the Beaufort Sea near Alaska, an Obama administration official said today.

“I think we’re very close to an understanding between us and Shell about where their opportunity is, how they can structure their permit and how we can deliver a solid permit for them,” said Gina McCarthy, the assistant administrator of the Environmental Protection Agency.

Shell had hoped to launch work on its first Beaufort well after ice cleared this summer, but the company scrapped the plans in February, after two essential air quality permits issued by the EPA were revoked by the federal Environmental Appeals Board. The appeals board faulted federal regulators for not fully reviewing potential emissions from a drill ship and support vessels.

McCarthy told a House Energy and Commerce subcommittee that the EPA and Shell are working to get a plan and permit in place that would withstand any future appeals board scrutiny.

“The good news is that I believe we are very close to a strong permit that will actually allow them to have three drilling operations going on in the Arctic in a way that is protective of public health and consistent with current law,” McCarthy said.

McCarthy’s assertions match new optimism displayed by Shell Oil Co. president Marvin Odum about the company’s Arctic aspirations. On Thursday, Odum said he was “cautiously optimistic” that Shell and regulators would be able to move forward the planned drilling in the Beaufort and Chukchi seas, following a recent meeting with administration officials.

“The fact that we’ve had a coordinated meeting — looking across agencies, with interest from the White House in how this is progressing — is a positive sign,” Odum told reporters Thursday. “That’s something that we’ve been missing over the past several years, and I hope that means progress.”

Today, the House Energy and Power Subcommittee was studying legislation sponsored by Rep. Cory Gardner, R-Colo., that would streamline the Clean Air Act permitting process for offshore drilling operations. The measure is aimed at resolving Shell’s five-year quest to drill in the Arctic waters near Alaska, but it also would apply broadly to offshore drilling elsewhere.

The bill would limit Clean Air Act reviews of offshore drilling projects to their air quality impacts onshore, effectively blocking reviews at the shoreline. It also would insulate servicing vessels used offshore from several federal emissions control requirements.

Democrats said the measure also would force more legal challenges out of the hands of the Environmental Appeals Board and into federal courts — specifically the Court of Appeals based in Washington, D.C.

Several Democrats signaled they supported streamlining the permitting process — but said that legal requirement was a step too far.

“The permitting process in Alaska has taken too long,” said Rep. Henry Waxman, D-Calif.  “And appropriate clarifications in the Clean Air Act could be helpful.”

But Waxman said the bill would encourage more litigation, and unfairly force local permitting cases to be heard in Washington, D.C., far from the communities that may be affected.

Rep. Bobby Rush, D-Ill., said he also was “not opposed to streamlining the permitting process, provided we allow for appropriate community input and we do not weaken the air quality controls that the licensing process was implemented to protect.”

But, he said, moving the entire EPA permit appeals process to Washington, D.C., would be a hardship on local residents who may challenge the agency’s permit decisions. “It seems to me that forcing state and local stakeholders to travel all the way to the U.S. Court of Appeals here in Washington in order to air their grievances would provide an unreasonable burden on less affluent communities and stakeholders.”

Shell has just applied for a different set of permits — from the Bureau of Ocean Energy Management, Regulation and Enforcement — to drill up to four exploratory wells in the Beaufort Sea and six wells in the nearby Chukchi Sea.