Obama administration gives OK to Shell to drill deeper in Arctic

WASHINGTON — The Obama administration is giving Shell permission to fully drill an exploratory well in the Arctic Ocean and burrow into potential oil-bearing rock thousands of feet below the seafloor that previously was off limits.

The newly modified drilling permit, issued Monday by the Interior Department’s Bureau of Safety and Environmental Enforcement, gives Shell a chance to complete its Burger J well before a Sept. 28 deadline to finish the work.

Shell has already been drilling the well for more than two weeks. But BSEE had ordered the company to halt after completing the top 3,000 feet, because critical emergency equipment — and the icebreaker used to deploy it — were not nearby to safeguard the work.

That icebreaker, the MSV Fennica, was damaged in Dutch Harbor, Alaska, and sent to a Portland shipyard for repairs. It arrived near Shell’s ongoing drilling in the Chukchi Sea on Aug. 11.

“Now that the required well control system is in place and can be deployed, Shell will be allowed to explore into oil-bearing zones for Burger J,” said BSEE director Brian Salerno, in a statement.

Related story: Shell asks feds for go ahead to drill deeper in Arctic

Salerno stressed that the Arctic drilling taking place about 70 miles from Alaska’s northwest coastline is “being held to the highest safety, environmental protection, and emergency response standards.”

BSEE officials are stationed around the clock on the Transocean Polar Pioneer, which is drilling the Burger J well.

Shell spokesman Curtis Smith said crews aboard the rig “continue to make progress” on the well.

“We remain committed to operating in a safe, environmentally responsible manner and look forward to evaluating what could potentially become a national energy resource base,” Smith said.

Shell executives are hoping to find a multi-billion barrel cache of crude at the site, based on information gleaned during earlier drilling in the late 1980s and later geophysical research.

‘Huge’ potential

Royal Dutch Shell CEO Ben van Beurden told reporters in a July 30 earnings call that the Burger prospect “is huge.” But he stressed that it is a long-term play; if the company finds oil and decides to develop it, the project would not deliver oil production until 2030, at the earliest.

Shell has until Sept. 28 to finish the bulk of its drilling. After that deadline, regulators say the company can not conduct exploratory drilling operations below the bottom of the last stretch of casing, or pipe, set in the well.

“It’s possible we will complete a well this summer,” said Shell’s Smith. “But we’re not attaching a timeline to the number of feet drilled. Safe, efficient operations will ultimately determine the progress we make.”

The company still can do other work after Sept. 28 — and up to Oct. 31 — including excavating a 20-foot by 40-foot hole at another well known as Burger V that is about nine miles away. That would provide a foundation for additional drilling in 2016, when Shell has said it intends to return to the region.

Shell had hoped to bore both of those wells at the same time, but Interior Department regulators ruled that existing wildlife protections require a 15-mile buffer zone between simultaneous drilling.

That limitation remains in place.

Monday’s approval was widely expected but still marked a defeat for environmentalists who have challenged Shell’s Arctic drilling venture. Federal regulators had reviewed Shell’s drilling plan and well design as a part of their initial permit review, before the icebreaker carrying an emergency capping stack was damaged.

Michael LeVine, Pacific senior counsel for the conservation group Oceana called the announcement “disappointing.”

“Calls for the government to prioritize stewardship ahead of Shell have fallen on deaf ears,” LeVine said.

Related story: Environmentalists say Arctic drilling doesn’t fit in with Obama’s climate change crusade

Greenpeace USA executive director Annie Leonard said the Obama administration was being “deeply hypocritical” by allowing the additional Arctic drilling a week after President Barack Obama detailed his plans to tour the Alaska Arctic and talk with residents on the front lines of climate change.

“This approval means the Obama administration is leaving the fate of the Arctic up to Shell this summer,” Leonard said. “But that doesn’t mean the future of the Arctic has to be in Shell’s hands.”