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February 1989: Officials approve Shell’s Chukchi oil search
Anchorage Daily Times
The federal government has approved Shell Western E & P Inc.’s plans to search for oil in the Chukchi Sea, an unexplored region noted for its harsh climate and rugged ice conditions.
Shell has selected 16 possible drill sites and wants to sink up to eight wildcat wells over four years at an estimated cost of $400 million.
The company plans to begin drilling this summer from the ship Canmar Explorer III on federal leases up to 200 miles from Alaska’s northwest coast.
The federal Minerals Management Service approved the company’s plans Tuesday, following a month-long review. The agency will now wait for the state to issue its findings before deciding whether to grant Shell a drilling permit.
“Overall, it’s a good plan … and I’m pleased Shell made the financing available and is going ahead,” MMS Director Alan Powers said.
Because of weather conditions and subsistence whale hunting in areas of the Chukchi Sea, Powers said MMS attached a number of stipulations to Shell’s plans, including required practice drills to assure the company can handle any oil spills.
“Generally, we require one right at the start of drilling, to assure the people are trained … and will be used to the equipment,” he said. “If environmental conditions change, we’ve required they go through another response to make sure they are equipped to deal with the change.”
Powers also said MMS wants Shell officials to coordinate their drilling activities with the Alaska Whaling Commission and subsistence communities in the region, including Wainwright and Point Lay.
“This will reduce any interference with subsistence whaling,” he said.
But Powers and Shell’s immediate plans call for drilling on remote parcels far from the whale migration corridor.
“Drilling isn’t expected to start until late June or July, and by that time spring subsistence whaling would be completed, so we don’t expect much interference,” he said.
Powers said the Biological Task Force, consisting of several federal agencies, also will review Shell’s plans to decide whether a survey needs to be conducted to measure the effects of drilling on wildlife.
The Alaska Division of Governmental Coordination currently is reviewing Shell’s plans and is expected to issue a finding March 10, Director Bob Grogan said.
Grogan said the division, which is attached to the governor’s office, wants to make sure the plan is consistent with state and federal coastal zone management programs.
“We’re dealing with an area out there that has never been explored, and it’s the most hostile offshore area,” he said.
“It raises technical questions about how exploration will take place. There are environmental concerns as well. But we’ll try to figure out a way we can go forward. We try to cooperate.”
The government has said the Chukchi Sea may hold up to five billion barrels of recoverable crude oil, making it one of the hottest offshore prospects in the world.
“There are a lot of good-looking prospects out there,” Powers said.
Meanwhile, Billye Lynn Ratliff of Shell’s office in Houston, Texas, said the company is gearing up to explore.
“We’re happy to be at this stage of the permitting process and on schedule,” she said. “We’re pleased with the approval.”
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