|Arctic OCS Exploration Hopeful|
With the Environmental Protection Agency air discharge permits in hand, Shell oil is gearing up for plans to drill up to 6 wells in Alaska’s Chuckchi Sea Outer Continental Shelf (OCS) area. The air discharge permits, which have been stalled by review for a number of years are the second to last major regulatory hurdle necessary to allow Shell to conduct exploratory work.
The Bureau of Ocean Energy Management recently accepted Shell’s exploration plan in the Beaufort Sea but is now reviewing the plan for the neighboring Chuckchi Sea operation which is currently going through a public comment period (ending December 7th) . Upon approval by BOEM of the Chuckchi plan and given the complete acquisition of roughly 35 federal and state permits for operations in both seas Shell will be given the green light to drill. BOEM has 30 days to come to a decision on the Chuckchi Sea plan. Shell is the largest lease holder in both the Chuckchi and Beaufort Seas off Alaska’s northern coast and has spent $2.3 billion on leases and another $1 billion on administrative work to acquire its federal permits in the Chuckchi Sea area alone. To date not a single well has been drilled from the most recent OCS lease sale (2008) from the area due to permitting delays. With leases lasting only 10 years and the fate of the Trans Alaska Pipeline in balance it has been crucial to Shell and the State that federal permits be granted and exploratory work commence in an expedient manor. Shell will likely send the exploration drilling vessel Noble Discoverer to the Chuckchi next summer to start operations if given to the go ahead.
Just as was done soon after the 2008 198 lease sale environmental groups have filed a new law suit against the federal government to try and stop the BOEM from going ahead with exploration go aheads. Secretary of Interior Ken Salazar, who has been against oil and gas exploration in Alaska in general, stated the concerns raised by law suits toward the BOEM (formerly the MMS) in 2010, namely a lack of comprehensive environmental impact study, had been met toward Shell’s newly revised EIS. Environmental groups still argue not enough knowledge is known about the impact of oil and gas exploration on the ecosystem and sue the federal agencies involved in granting permits in an attempt to stop exploration taking place. The BOEM argues that any information missing in the OCS environmental impact statements do not affect the ability to make a reasoned decision on the issue.
Conoco Philips and Norway’s Statoil are the two other major players in Arctic OCS development and are further behind Shell in their lease permit acquisitions.
BOEM website explaining Shell Chuckchi lease procedure and relevant permits acquired and pending
BSEE web site with public comment section
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