The U.S. Bureau of Ocean Energy Management gave Shell conditional approval to work next year in the Chukchi Sea. Shell can drill six exploration wells in the region provided it gets its oil spill response plan and other environmental protection measures approved by U.S. regulators.
The U.S. Environmental Protection Agency already awarded Shell an air permit for drilling vessel Noble Discoverer to start work next year off Alaska's northwestern coast.
The American Petroleum Institute estimates as much as 700,000 barrels of oil per day could be produced from Alaska's Beaufort and Chukchi seas for 40 years.
Environmental groups say they worry about the consequences of potential disasters in arctic waters.
The Environmental Protection Agency said that, under the new permits, Shell is committed to reducing fleet emissions "in most key air pollutants" by more than 50 percent of the levels allowed in 2010 permits.
"Our scientists and subject matter experts have carefully scrutinized Shell's proposed activities," BOEM Director Tommy Beaudreau said in a statement.
"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."
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