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Shell gets key Alaska permit for Beaufort drilling


Sat Apr 10, 2010 2:53pm EDT

By Yereth Rosen

ANCHORAGE, Alaska, April 10 (Reuters) – Royal Dutch Shell Plc (RDSa.L) has been granted a long-awaited federal air-quality permit the oil company needs to conduct exploratory drilling this year in Alaska’s Beaufort Sea, government officials said late on Friday.

The U.S. Environmental Protection Agency issued the permit to Shell to cover air pollutants emitted from the drill ship and fleet of support vessels that the company plans to mobilize to drill two exploratory wells on leases 16 to 22 miles (26 to 35 km) offshore from Alaska’s northern coast.

The Beaufort Sea permit — which Shell has been seeking for nearly four years — was granted a week after the EPA issued a similar permit for the company’s planned drilling operations this year in the Chukchi Sea off Alaska’s northwestern cost.

The permit requires Shell to use technological advances, ultra-low-sulfur diesel fuel and to commit to other protective measures, EPA officials said in a statement.

“This permit ensures that exploration and drilling will occur in a way that protects air quality,” Rick Albright, director of the air, waste and toxics issues for EPA’s Seattle regional office, said in a statement.

The Beaufort permit is an important milestone, a Shell spokesman in Anchorage said, after the company spent $84 million on its Beaufort Sea leases and intends to drill prospects there called Sivulliq and Torpedo that are known to contain hydrocarbons.

“The issuance of our final Beaufort Sea air permit means we can continue to advance our exploration program with the ultimate goal of drilling in the Chukchi and Beaufort Seas in 2010,” Shell spokesman Curtis Smith said.

The permit is subject to a public-review period and could be appealed by critics.

Shell is seeking to use a single drill ship and a fleet of icebreakers, oil-spill-response ships and other support vessels to explore the Chukchi and Beaufort prospects. Drilling is planned for the summer and fall, times when sea ice is absent. The company plans to drill up to three wells about 75 miles (120.7 km) offshore in the Chukchi, where it spent $2.1 billion in 2008 to acquire leases, and two wells in the Beaufort.

Environmentalists and the native Inupiat Eskimo people of the region expressed concerns, as the permit was being drafted by the EPA, about carbon-dioxide emissions into a region already strongly affected by climate change, and the potential impact of pollutants on people who hunt and fish in the region for traditional foods.

Other permits are required before Shell is authorized to drill at either site, but those permits are considered smaller in scope than the air-quality permits.

(Editing by Bill Rigby and Eric Walsh)


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