ANCHORAGE, Alaska (AP) — Shell Oil announced Wednesday that it
has scaled back its Arctic Ocean exploration plans in 2011 to
promising sites in the Beaufort Sea, backing off prospects in the
Chukchi Sea until legal clouds are cleared.
“Our plan is to drill in the Beaufort in 2011,” said Shell
Alaska Vice President Pete Slaiby.
The company has applied for one exploration well in the Beaufort
off Alaska’s north coast and will seek a permit for a second. The
company will hold off applying for well permits in the Chukchi of
Alaska’s northwest coast until two court cases are resolved.
Shell’s plans to drill exploration wells in the both areas this
year were put on hold by Interior Secretary Ken Salazar after the
Deepwater Horizon disaster in the Gulf of Mexico. Salazar suspended
applications for permits, and has set no timetable for lifting the
suspension.
Drilling in Arctic waters is bitterly opposed by environmental
groups and some Alaska Native groups, who say petroleum companies
have not demonstrated an ability to clean up a spill in ice-choked
waters. They also say the remote location of drilling sites, the
area’s notorious inclement weather and the lack of infrastructure,
including a deep-water port, would make a cleanup of a major spill
nearly impossible.
Shell has invested more than $3.5 billion in the Arctic outer
continental shelf, including $2.2 billion in leases in the Chukchi
that have been challenged.
Slaiby said Shell will need a decision by December to move
forward with its 2011 plans, which involve moving north a drilling
ship and a small fleet of support vessels, including spill response
boats.
Shell has continuously stressed that Arctic drilling would be in
shallow water and that the risk of a spill is minimal. Slaiby said
the company since the Deepwater Horizon blowout has taken
“extraordinary steps to build confidence around our 2011
program.”
The company also will position a second drilling ship in Alaska
as an additional safety measure. If the first drilling ship were
crippled by a blowout, a second ship could drill a relief well.
“We also confirmed our commitment to engineer an oil spill
containment system, which is designed to capture hydrocarbons at
the source in the unlikely event of a shallow water blowout,”
Slaiby said.
Some of Shell’s Chukchi prospects are 140 miles offshore, but
Slaiby said the distance did not contribute to the decision not to
seek permits there for the 2011 drilling season. Rather, it was a
lawsuit in Washington, D.C., that found flaws in the federal
government’s 5-year leasing plan, and a second lawsuit filed in
Anchorage that ruled the former Minerals Management Service had not
required adequate environmental reviews for the Chukchi leases.
Slaiby said Shell is optimistic they will be resolved.
“All of these issues that we’ve got, legally, in the Chukchi, I
think are fairly small and narrow,” he said.
