On Dec. 16 the Bureau of Ocean Energy Management issued its conditional approval for Shell’s plan to drill up to six exploration wells in the Alaska Chukchi Sea, starting in the 2012 open water season. However, the agency has placed a number of conditions on its approval, including a requirement that Shell stops any drilling activities into potential oil bearing zones within 38 days of a projected date of first ice encroachment in the area of the drilling. BOEM says that this stipulation will assure “a greater opportunity for response and cleanup in the unlikely event of a late season oil spill.”
For 2012 BOEM’s projected date of ice encroachment is Nov. 1. So, with Shell having said that it anticipates continuing drilling into late October, depending on weather and ice conditions, the BOEM stipulation appears to cut 38 days from the end of Shell’s planned drilling season. And, according to BOEM’s environmental assessment for Shell’s plan, the shortening of the drilling season would likely limit Shell to the drilling of up to two wells in 2012.
Other conditions associated with the plan approval include the requirement for an approved oil spill prevention and response plan; a permit to drill for each well; the availability of a well capping and containment system; and contingency arrangements for relief well drilling.
“Our scientists and subject matter experts have carefully scrutinized Shell’s proposed activities,” said BOEM Director Tommy Beaudreau in announcing the conditional approval. “We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed on its exploration plan and all other applicable safety, environmental protection and emergency response standards.”
Shell: important step
“The conditional approval of Shell’s revised Chukchi Sea exploration plan is an important step towards our goal of drilling our Chukchi leases starting in July of next year,” Shell spokesman Curtis Smith told Petroleum News in a Dec. 16 email. “Our Chukchi acreage makes up a significant portion of our Alaska investment portfolio and we look forward to validating the confidence we have in this highly prospective area.”
Smith said that Shell was still evaluating the conditions associated with the approval, including the stipulation that potentially limits the length of Shell’s Chukchi Sea drilling season.
“We are concerned this unwarranted restriction could severely impact our ability to deliver a complete Chukchi program,” Smith said. “Shell remains committed to employing world-class technology and experience to ensure the delivery of a safe, environmentally responsible Arctic exploration program — a program that has the potential to create over 50,000 jobs and deliver new, domestic supplies of energy for decades to come.”
System approval needed
Shell has already committed to building a well capping and oil containment system to act as a backup line of defense, should a well blowout occur and the well’s blowout preventer fail. BOEM says that before Shell starts drilling the Bureau of Safety and Environmental Enforcement must approve the system and Shell must demonstrate field deployment of the system.
And also before the commencement of drilling operations, Shell must confirm the staging location and schedule for mobilizing a drilling rig for relief well drilling, as well as demonstrating that the relief well rig meets regulatory requirements.
Other conditions attached to the approval of Shell’s exploration plan include approvals under the Marine Mammals Protection Act for the incidental harassment of marine mammals, a plan of cooperation with subsistence hunters in the Chukchi Sea and the use of marine mammal observers on vessels in the Chukchi Sea.
AK politicians disappointed
Alaska Gov. Sean Parnell expressed his concerns about the requirement to shorten the drilling season.
“I am deeply concerned that curtailing an already short drilling season will put the entire project in jeopardy, cost jobs and ultimately result in more dependence on foreign oil, which serves neither Alaska nor our country,” Parnell said. “This is yet another example of federal regulatory overreach that may unnecessarily hamper economic development for our state, and reduce our ability to produce more domestic energy.”
The Alaska Congressional delegation expressed similar views.
“Some of the conditions attached to this decision seem to be a response to newspaper ads, rather than founded in science,” said Sen. Lisa Murkowski, R-Alaska. “This arbitrarily curtails an already very short drilling season, unnecessarily putting the project at risk. … As the commandant of the U.S. Coast Guard has testified, the homework is done and we are ready and waiting to move forward with safe and responsible exploration of Alaska’s huge energy resources.”
“I am concerned that today’s short-sighted decision is influenced by election year politics instead of the long-term energy and jobs needs of our country,” said Sen. Mark Begich, D-Alaska. “I am disappointed that the administration has diverted from months of positive progress and thrown this last-minute monkey wrench into Arctic development. … Alaska has done off-shore exploration before, we’ve done it safely, and the technology is better now than it has ever been.”
“While today’s news that BOEM has issued conditional approval for Shell’s Chukchi leases might seem welcoming at first glance, the devil is in the details,” said Rep. Don Young, R-Alaska. “What Alaskans and the companies who have invested billions of dollars are looking for is certainty and progress, and unfortunately this ‘conditional’ approval won’t bring much of either. The fact of the matter is that Alaskans know how to do this in a safe and responsible way, and to ignore the progress that has been made to increase safety and technology is short-sighted.”
