Federal Government Greenlights Shell Artic Spill Response Plan (NYSE: RDS.A)
One of the last remaining hurdles to Shell Oil’s ability to drill for oil offshore in the Artic has been cleared as the federal government announces that it has approved the company’s Chukchi Sea spill response plan. Experts have estimated that there are 26.6 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas located in the outer continental shelf reserves of the Arctic Ocean. The total includes the Chukchi Sea in the northwest and the Beaufort Sea to the north.
Shell Oil is planning to drill up to three wells in the Chukchi area and two wells in the Beaufort area. The drilling has been bitterly opposed by environmentalists and Alaska Natives living along the Arctic Coast. Shell is still awaiting a decision on an appeal by environmental groups of EPA air permits for a second drill ship, which Shell will use for drilling in the Beaufort Sea.
A prepared statement by Interior Secretary Ken Salazar said that the federal government was taking a cautious approach to the situation. He said, “In the Arctic frontier, cautious exploration — under the strongest oversight, safety requirements, and emergency response plans ever established — can help us expand our understanding of the area and its resources, and support our goal of continuing to increase safe and responsible domestic oil and gas production.”
Approval from the Bureau of Safety and Environmental Enforcement must still be obtained. The Bureau must inspect and approve the equipment that is intended for use in a spill response, including Shell’s capping stack, a device that could be lowered onto a well after a blowout. Rebecca Noblin, an attorney for the Center for Biological Diversity in Anchorage, expressed concern that Shell’s spill response plan relies on technology that has not even been built, much less tested. She said, “The reality is, we don’t know how to deal with an oil spill in the Arctic.”
Chris Krenz of Oceana, an ocean-focused environmental group, questioned why officials would approve the spill prevention plan before the tests have been completed. He said, “It’s really ludicrous to approve Shell’s spill plan before those in-water tests are done.” Krenz stated that the last public test of cleaning a spill in ice-filled waters was in 2000 and was a failure. Krenz said, “It’s just not going to be possible. It seems like the Obama administration had joined Shell in oil response dreamland.”