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Bloomberg: Shell’s Alaska Drilling Plan Prompts Protests at Whaling Meet

By Tony Hopfinger

(Bloomberg) — Drilling plans by Royal Dutch Shell Plc and other oil companies in Alaska are drawing complaints from activists, fishermen and Eskimos at the International Whaling Commission meeting in Anchorage, Alaska.

Shell and the government haven’t prepared for spills in the Arctic, while exploration will disturb whale habitats, Betsy Goll, a spokeswoman for Alaska Wilderness League, said in a statement. The World Wildlife Fund is opposing U.S. plans to extend the exploration to Bristol Bay in southwestern Alaska by 2011, Margaret Williams, a fund director, told reporters yesterday.

“We’re worried about the noise from seismic and the effect it would have on whales,” Williams said. Seismic exploration uses sound waves to gather clues about underground oil deposits.

Dwindling discoveries have pushed oil companies into remote and more hostile regions to benefit from record demand and prices. U.S. President George W. Bush this year lifted a moratorium on drilling in Bristol Bay to tap reserves that may reduce reliance on Middle East supplies. Shell, Europe’s largest oil company, has shown the most interest in offshore exploration in Alaska.

Shell announced earlier this year a plan to navigate a small fleet of exploration ships into the Arctic’s Beaufort Sea. The company is waiting on permits to allow as many as three exploration wells this summer, Shell spokeswoman Terzah Poe said in an e-mail.

Bowhead Whales

Eskimos living along the coastline said the noise may disturb migrating bowhead whales, walruses and seals, which they depend on for food. They also questioned whether Shell is prepared for a potential oil spill in the Beaufort Sea.

Noise shouldn’t cause any problems and the company will closely monitor sea mammals near its rigs, Poe said.

“In over 60 years of offshore oil and gas exploration and production in the U.S., there is not a single documented case of these activities resulting in serious harm to a whale,” Poe said. Shell’s fleet will include spill clean-up equipment, planes and about 16 oil-response barges, she said.

“They’ve never had a spill in Arctic waters, so how do they know they can clean it up?” Robert Thompson, 60, a whaler in the Alaska village of Kaktovik, said in a phone interview May 28.

Since 2005, Shell has spent $44 million on 84 federal oil leases in the Arctic’s Beaufort Sea, according to the Mineral Management Service, which oversees offshore oil leases in federal waters. In February, the service accepted Shell’s exploration plan.

Appealed Decision

North Slop Borough, which includes Kaktovik, Barrow and several other villages, have appealed the Mineral Management Service’s decision to allow Shell to drill this summer. If Shell’s plans are delayed, it will probably have to wait until next year because the Beaufort Sea will be starting to ice over.

Shell has also indicated it wants to explore in the Chukchi Sea, off the coast of northwest Alaska.

“Our people have never really been consulted by the government or the oil company on how we feel about what they’re doing,” said Enoch Adams Jr., vice mayor of Kivalina, an Eskimo village in northwest Alaska. “There have been no hearings. There have been no attempts to inform us specifically what they’re going to do. We have not been offered any timelines.”

An International Whaling Commission committee prepared a report for this week’s meeting expressing concerns about oil development in Bristol Bay, particularly for the endangered North Pacific right whale. The committee has recommended to the commission that more research be done to better understand the impact of seismic exploration on whales.

Endangered Species

Bristol Bay is part of the Bering Sea, one of the world’s largest commercial fisheries. Several whale species endangered in the U.S. migrate through the sea.

In the 1980s, Shell, Exxon Mobil Corp., BP Plc and other companies drilled dozens of exploration wells off the Arctic coast, including some that showed potential for producing commercial amounts of crude. The drilling program slowed when the ExxonValdez oil tanker ran aground in Prince William Sound, Alaska, in 1989.

Before ExxonValdez, Shell helped discover a large oil deposit off the coast of the northern Alaska. BP, Europe’s second-largest oil company, subsequently developed the field and named it Northstar, the first offshore field in Alaska’s Arctic.

The World Wide Fund has previously campaigned against funding by the European Bank for Reconstruction and Development for a Shell project in Sakhalin, Russia because of alleged harm to Pacific gray whales.

The European Bank Jan. 11 canceled plans to lend about $300 million to Russia’s $22 billion Sakhalin-2 oil and gas venture after state-owned OAO Gazprom took control from Shell. The withdrawal threatened a further $7 billion in loans from other state-owned credit agencies and commercial banks, which had expected the European Bank to take the lead. Environmental clearance for the project by the bank would influence larger loans from other government and private-sector banks in Japan, the U.S. and Europe, the European Bank said last year.

To contact the reporter on this story: Tony Hopfinger in Anchorage, Alaska at [email protected] .

Last Updated: May 30, 2007 02:21 EDT

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