Feds to Shell: Drill, Baby, Drill in the Arctic

The Obama administration gave the oil giant a preliminary green light for controversial drilling off Alaska’s coast this summer.

National Journal
May 11, 2015, 10:23 a.m.

The Obama ad­min­is­tra­tion has ap­proved Roy­al Dutch Shell’s plan to drill off Alaska’s north­ern coast, es­cal­at­ing a col­li­sion with en­vir­on­ment­al­ists who say de­vel­op­ment in the re­mote Arc­tic wa­ters poses big risks to whales, po­lar bears, and oth­er spe­cies.

The In­teri­or De­part­ment’s off­shore-drilling branch on Monday offered a pre­lim­in­ary green light for Shell’s plans to drill ex­plor­a­tion wells this sum­mer in the Chuk­chi Sea, a re­gion that reg­u­lat­ors es­tim­ate could hold more than 15 bil­lion bar­rels of re­cov­er­able oil, and large nat­ur­al-gas re­sources too.

Shell is not in the clear yet. The com­pany would still have to ob­tain spe­cif­ic drilling per­mits, re­ceive au­thor­iz­a­tions un­der the Mar­ine Mam­mal Pro­tec­tion Act, and clear oth­er reg­u­lat­ory hurdles be­fore it could com­mence with mul­ti­year plans to even­tu­ally drill up to six wells in re­l­at­ively shal­low wa­ters about 70 miles off­shore.

But the ex­plor­a­tion plan‘s ap­prov­al lays bare the split between the White House and the green move­ment over Arc­tic drilling and pro­tec­tions.

En­vir­on­ment­al­ists, who fear oil spills in the eco­lo­gic­ally sens­it­ive re­gion, cri­ti­cized In­teri­or’s de­cision. “Shell has a his­tory of dan­ger­ous mal­func­tion­ing in the Arc­tic, while glob­al sci­ent­ists agree that Arc­tic oil must stay in the ground if we’re to avoid cata­stroph­ic cli­mate change,” said Tim Don­aghy of Green­peace.

It’s a ten­sion that Demo­crat­ic White House front-run­ner Hil­lary Clin­ton could face too. While Shell has been the most ag­gress­ive among en­ergy com­pan­ies in seek­ing to de­vel­op costly leases ob­tained dur­ing the George W. Bush ad­min­is­tra­tion, oth­er com­pan­ies hold leases there as well.

In ad­di­tion, more Arc­tic lease sales are tent­at­ively sched­uled in 2016 and 2017, and a re­cent Obama ad­min­is­tra­tion draft pro­pos­al en­vi­sions oth­er auc­tions of drilling rights in Arc­tic wa­ters in 2020 and 2022. Clin­ton has yet to un­veil her en­vir­on­ment­al and en­ergy plat­form, but her cam­paign chair­man, the in­flu­en­tial Demo­crat­ic strategist and act­iv­ist John Podesta, op­poses Arc­tic drilling.

The ex­plor­a­tion plan’s ap­prov­al Monday comes three years after Shell’s mis­hap-laden de­vel­op­ment ef­forts in the ad­join­ing Beaufort and Chuk­chi Seas. The com­pany suffered sev­er­al set­backs and nev­er won In­teri­or’s per­mis­sion to drill in­to oil-bear­ing sub­sea lay­ers.

Shell’s woes in­cluded dam­age to spill-con­tain­ment equip­ment dur­ing test­ing off Wash­ing­ton state’s coast, and a drilling rig that ran aground in Decem­ber 2012 on its way back from the Arc­tic re­gion.

But the spill-con­tain­ment sys­tem per­formed well in re­cent test­ing wit­nessed by fed­er­al of­fi­cials, the Hou­s­ton Chron­icle re­por­ted in April.

In­teri­or’s off­shore drilling reg­u­lat­ors are still craft­ing drilling-safety rules tailored spe­cific­ally for the Arc­tic, but say they will hold Shell to high stand­ards even though the rules are un­likely to be in place be­fore Shell re­starts de­vel­op­ment.

“We have taken a thought­ful ap­proach to care­fully con­sid­er­ing po­ten­tial ex­plor­a­tion in the Chuk­chi Sea, re­cog­niz­ing the sig­ni­fic­ant en­vir­on­ment­al, so­cial, and eco­lo­gic­al re­sources in the re­gion and es­tab­lish­ing high stand­ards for the pro­tec­tion of this crit­ic­al eco­sys­tem, our Arc­tic com­munit­ies, and the sub­sist­ence needs and cul­tur­al tra­di­tions of Alaska Nat­ives,” said Abi­gail Ross Hop­per, dir­ect­or of the Bur­eau of Ocean En­ergy Man­age­ment.

She said that “any off­shore ex­plor­at­ory activ­it­ies will con­tin­ue to be sub­ject to rig­or­ous safety stand­ards.”

Shell wel­comed the ap­prov­al but warned that reg­u­lat­ors should not drag their feet on the per­mits that are still needed.

“The ap­prov­al of our Re­vised Chuk­chi Sea Ex­plor­a­tion Plan is an im­port­ant mile­stone and sig­nals the con­fid­ence reg­u­lat­ors have in our plan. However, be­fore op­er­a­tions can be­gin this sum­mer, it’s im­per­at­ive that the re­mainder of our per­mits be prac­tic­al, and de­livered in a timely man­ner,” spokes­man Curtis Smith said.

While it’s seek­ing to drill in the com­ing months, Shell pre­dicts that ac­tu­al oil pro­duc­tion from its leases in U.S. wa­ters in the Arc­tic is a dec­ade away.

What We're Following See More »
Trump Signs Border Deal
1 days ago

"President Trump signed a sweeping spending bill Friday afternoon, averting another partial government shutdown. The action came after Trump had declared a national emergency in a move designed to circumvent Congress and build additional barriers at the southern border, where he said the United States faces 'an invasion of our country.'"

Trump Declares National Emergency
1 days ago

"President Donald Trump on Friday declared a state of emergency on the southern border and immediately direct $8 billion to construct or repair as many as 234 miles of a border barrier. The move — which is sure to invite vigorous legal challenges from activists and government officials — comes after Trump failed to get the $5.7 billion he was seeking from lawmakers. Instead, Trump agreed to sign a deal that included just $1.375 for border security."

House Will Condemn Emergency Declaration
2 days ago

"House Democrats are gearing up to pass a joint resolution disapproving of President Trump’s emergency declaration to build his U.S.-Mexico border wall, a move that will force Senate Republicans to vote on a contentious issue that divides their party. House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) said Thursday evening in an interview with The Washington Post that the House would take up the resolution in the coming days or weeks. The measure is expected to easily clear the Democratic-led House, and because it would be privileged, Senate Majority Leader Mitch McConnell (R-Ky.) would be forced to put the resolution to a vote that he could lose."

Where Will the Emergency Money Come From?
2 days ago

"ABC News has learned the president plans to announce on Friday his intention to spend about $8 billion on the border wall with a mix of spending from Congressional appropriations approved Thursday night, executive action and an emergency declaration. A senior White House official familiar with the plan told ABC News that $1.375 billion would come from the spending bill Congress passed Thursday; $600 million would come from the Treasury Department's drug forfeiture fund; $2.5 billion would come from the Pentagon's drug interdiction program; and through an emergency declaration: $3.5 billion from the Pentagon's military construction budget."

House Passes Funding Deal
2 days ago

"The House passed a massive border and budget bill that would avert a shutdown and keep the government funded through the end of September. The Senate passed the measure earlier Thursday. The bill provides $1.375 billion for fences, far short of the $5.7 billion President Trump had demanded to fund steel walls. But the president says he will sign the legislation, and instead seek to fund his border wall by declaring a national emergency."


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.