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Interior approves updated OCS Lease Sale analysis, clears one hurdle for Shell

Screen Shot 2014-10-31 at 17.18.55Article by Tim Bradner published 31 March 2015 by The Alaska Journal of Commerce:

Interior approves updated OCS Lease Sale analysis, clears one hurdle for Shell

The U.S. Interior Department published a long-awaited Record of Decision Tuesday on a contested 2008 Arctic offshore lease sale that had blocked Shell Oil’s exploration plans on leases it purchased.

The decision, or ROD, gave formal approval to a Supplementary Environmental Impact Statement published in February by the U.S. Bureau of Ocean Energy Management. The revised environmental document corrected a defect in the environmental study for the 2008 lease sale over which environmental groups sued.

Federal courts agreed the 2008 environmental impact document needed revision, and the U.S. BOEM opted to pursue the supplementary impact statement.

Completion of the process allows the BOEM to begin processing applications by Shell for permits to drill on its leases in the Chukchi Sea. Shell drilled one partially-complete well in the Chukchi in 2012 along with a partially-complete well in the Beaufort Sea where the company also holds leases.

U.S. Interior Secretary Sally Jewell said the revised document reflects a balanced and thoughtful approach to Arctic exploration by the government.

“The Arctic is an important component of the administration’s national energy strategy,” Jewell said in a statement. “This unique, sensitive and often challenging environment requires effective oversight to ensure all activities are conducted safely and responsibly.”

Environmental groups criticized the action.

“It is unconscionable that the federal government is willing to risk the health and safety of the people and wildlife that live near and within the Chukchi Sea for Shell’s reckless pursuit of oil,” said Marissa Knodel, Earth Climate Campaigner for the Friends of the Earth. “Shell’s dismal record of safety violations and accidents, coupled with the inability to clean up or contain oil in the remote and dangerous Arctic waters, equals a disaster waiting to happen.”

Shell paid more than $2 billion for its leases in the Chukchi Sea in 2008 but has been unable to completely drill an exploration well because of legal and regulatory hurdles. Overall the company has spent more than $5 billion on its Arctic program.

The company’s hopes are to return to the Chukchi Sea this summer 2015 to complete the well started in 2012 and to drill additional wells.

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