Feds launch review of Shell’s Arctic drilling plan

WASHINGTON _ The Obama administration on Friday launched a formal, 30-day review of Shell’s broad plan for boring up to six exploratory oil wells in Arctic waters near Alaska, even as the company moves drilling rigs and equipment to the area.

The Interior Department’s Bureau of Ocean Energy Management now has until May 10 to decide whether to approve, deny or require revisions to the Shell Oil Co. plan, after officially deeming it complete and ready for review on Friday.

The move comes less than two weeks after Interior Secretary Sally Jewell validated the government’s 2008 auction of the Chukchi Sea oil leases Shell is now targeting — a decision essential to possible drilling later this year.

Read more: Shell’s Arctic drilling plans on track as Obama administration OKs lease sale

And it follows months of informal talks between bureau regulators and Shell about the company’s hopes of resuming an Arctic drilling campaign it halted in 2012, after one of its rigs ran aground on the rocky shore of an Alaskan island.

The public now has two brief opportunities to weigh in on the proposal: 10 days to comment on environmental issues that should be analyzed in light of Shell’s drilling blueprint and 21 days to comment on the exploration plan itself. The ocean energy bureau is bound by statute to make its decision on the plan within 30 days.

“The Interior Department is rushing an important process through and not giving the public enough time to review and comment in order for Shell to be able to drill this summer,” said Cindy Shogan, executive director of the Alaska Wilderness League.

This is the fourth time federal regulators have deemed Shell’s submitted Arctic exploration plans complete and ready for a formal review.

‘Near disaster’

Each time, “the government has approved the proposals, which has led to litigation, expense and near disaster,” said Michael LeVine, Pacific senior counsel for the conservation group Oceana. “Though we are skeptical, we hope that the government does the right thing this time around and rejects the plan.”

An ocean energy bureau approval of Shell’s Chukchi Sea exploration plan is essential for the company to resume drilling wells into its Burger prospect about 75 miles off the Alaska coastline. But it is far from the final required authorization. The company also must win individual drilling permits from the Bureau of Safety and Environmental Enforcement, get government approvals for the effects marine mammals and have its rigs certified.

“The execution of our plan remains contingent on achieving the necessary permits, legal certainty and our own determination that we are prepared to explore safely and responsibly,” said Shell spokeswoman Kelly op de Weegh. “We continue to work on securing the final permits needed to continue exploration.”

Oil spill response

Environmentalists opposed to offshore drilling are hoping to use each of those regulatory steps to convince regulators that Arctic oil exploration is a bad idea. Oil spill equipment geared toward removing crude from more temperate climates will not work as well to pull it out of slushy, icy Arctic waters, they say.

And even though Shell plans on bringing a fleet of vessels, an emergency containment system and workers with them to the region, the remote territory means any additional help could be far away if needed.

Environmental activists with Greenpeace are now huddled on Shell’s contracted Polar Pioneer drilling rig as it is carried to the Pacific Northwest, in a protest of the planned Arctic oil exploration.

A federal district judge in Alaska could rule as early as Friday evening on Shell’s bid for a temporary order against those protesters and blocking Greenpeace from encroaching on Shell’s Arctic fleet.

Read more: Shell files lawsuit against Arctic drilling protesters

Some analysts have suggested that Shell’s just-announced $70 billion purchase of Britain’s BG Group — and CEO Ben van Beurden’s desire to pare $30 billion in non-core assets by 2018 — may mean the end of its Arctic oil quest.

But the company has already sunk some $6 billion into the effort, with many assets already mobilized for drilling later this year in search of new oil reserves that could boost its balance sheet.

James Kendall, director of BOEM’s Alaska Outer Continental Shelf Region, promised the agency “will be carefully scrutinizing” Shell’s newly revised exploration plan.

Shell’s multiyear drilling blueprint envisions up to six wells in the generally shallow, 140-foot waters that cover its Burger prospect in the Chukchi Sea.

The company would use two drilling rigs, each working simultaneously on different wells: the Noble Discoverer, which participated in the 2012 drilling, and the newly contracted Transocean Polar Pioneer. The dual-rig approach allows one to be swiftly put to work drilling a relief well in case of an emergency.

Other emergency gear could be farther away, according to the plan, which lays out Shell’s decision to moor its containment system in Kotzebue Sound, an eight-day journey from the expected drilling operations.


Shell also does not plan on circulating cooled drilling fluid into its wells — a mitigation measure adopted in 2012 that the company says is not needed because permafrost is not likely there.

Instead of recycling those drilling fluids — using them in a second well after finishing the first — the company plans to discharge them into sea.

The company also is aiming to conduct less-frequent tests on its blowout preventers — emergency devices that are used as a last line of defense against unexpected surges of oil and gas. Those pressure tests would occur every two weeks, instead of weekly, under Shell’s exploration plan.

“The updated exploration plan makes a number of changes (to an early 2014 draft), all of which point in the direction of less protection for the environment and greater impacts on wildlife,” said Greenpeace Senior Research Specialist Tim Donaghy. “These changes make an already inadequate plan even worse.”

Shell also plans on adding an additional helicopter to the one employed during its 2012 operations, with more frequent crew change flights to and from rigs in the Chukchi Sea.

Marilyn Heiman, director of the U.S. Arctic Program at Pew Charitable Trusts, stressed the importance of nearby safety equipment and allowing time for Shell to respond to a blown-out well or other emergency, before ice starts encroaching on the drilling site.

“We will be looking for certain key elements,” she said, “including an end-of-season date that ensures that a blowout can be controlled before the fall ice freeze-u and adequate trained personnel and equipment tested in the Arctic that could handle challenging conditions that go beyond extreme cold, sea ice, high seas, strong currents and minimal infrastructure.”