Salazar OKs Shell plans for drilling in Chukchi

ANCHORAGE - The Minerals Management Service on Monday conditionally approved plans by Shell Oil Co. to drill three exploratory wells next year in the Chukchi Sea off Alaska's northwest coast.

Interior Secretary Ken Salazar announced the decision in Washington, D.C., and said a key component of reducing America's dependence on foreign oil is the environmentally responsible exploration and development of renewable and conventional resources.

"By approving this exploration plan, we are taking a cautious but deliberate step toward developing additional information on the Chukchi Sea," he said in a release.

Offshore exploration in the Chukchi Sea and elsewhere could also provide crucial additional flow to the trans-Alaska pipeline, which may face technical and economic challenges as aging North Slope fields produce less oil.

"The successful development of these reserves and those of the Beaufort Sea are key to the long term viability of the Trans-Alaska Pipeline and the future of the Alaska natural gas pipeline," said Sen. Mark Begich, who praised the MMS decision Monday.

Drilling is bitterly opposed by environmental groups. They say there has not been enough work to assess environmental risks in a sensitive marine ecosystem already stressed by climate change.

"There hasn't been enough science," said Marilyn Heiman, director of the Pew Environment Group's U.S. Arctic program. "We don't know enough about the Arctic Ocean, particularly the Chukchi Sea, in the face of climate change."

Pew and other groups also say petroleum companies have not demonstrated an ability to clean up a spill in broken ice conditions, especially in the waters off northern Alaska, where a cleanup much of the year would be hampered by low light, dangerous seas and little available infrastructure such as ports, response vessels and airports.

"You can have a spill from an exploration well just as easily as a production well," Heiman said.

Shell's subsidiary, Shell Gulf of Mexico, Inc., in 2008 paid $2.1 billion for leases in the Chukchi. The 2008 sale was included in the Bush Administration's 2007-2012 five-year oil and gas leasing program.

Shell proposes exploratory drilling in open water using a drill ship, an ice management vessel, an ice class anchor handling vessel, and oil spill response vessels. The closest proposed drill site is 60 miles off shore and about 80 miles from Wainwright, Alaska, an Inupiat Eskimo village of 534 about 710 miles northwest of Anchorage and 90 miles southwest of Barrow.

Salazar said the approval of Shell's plan is conditional upon close monitoring of drilling activities to ensure that they are conducted in an environmentally safe manner.

Shell officials called the MMS conditional approval a positive step but noted the company is still waiting for an air discharge permit from the Environmental Protection Agency.

"It's critical that we achieve this permit in a timeline manner to enable a go-ahead decision on our 2010 program," said Shell Alaska Vice President Pete Slaiby.