Shell's Arctic drilling on hold

May 7, 2010 at 4:02 PM
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WASHINGTON, May 7 (UPI) -- Shell Oil's plan to drill three exploratory wells in the Arctic is uncertain in the wake of BP's Deepwater Horizon rig explosion in the Gulf of Mexico.

A Shell spokesman said Wednesday that the company had intended "to mobilize and move forward" on its three exploratory wells off Alaska's northern coast in July.

But Thursday the U.S. Department of Interior's Minerals Management Service informed Shell it wouldn't make a final decision on the requested permits until the Interior Department's report to President Barack Obama has been submitted and evaluated, The Hill newspaper reports.

The report, ordered by the president following the Deepwater Horizon well leak, is to be a review of "additional precautions and technologies" that may be needed for offshore development and is scheduled to be submitted later this month.

The notification to Shell followed an appeal from a coalition of environmental organizations to U.S. Interior Secretary Ken Salazar to suspend Shell Offshore Inc.'s plan to drill the exploratory wells.

The task of responding to an oil rig blowout in remote Arctic waters "would far surpass those related to BP's Deepwater Horizon explosion," the coalition -- which includes the Sierra Club, the Wilderness Society and the Natural Resources Defense Council -- said Wednesday.

"Expanding exploration and drilling into previously protected and remote areas is unacceptable," said William H. Meadows, president of The Wilderness Society. "The Deepwater disaster shows that drilling cannot be done in an environmentally safe manner, despite industry claims."

Oil has been spewing from the Gulf of Mexico well at a rate of about 5,000 barrels a day since the April 20 explosion.

Shell in 2008 spent $2.1 billion on the Arctic leases in the Beaufort and Chukchi seas. The U.S. Minerals Management Service estimates that the two Arctic seas hold up to 19 billion barrels of oil and up to 74 trillion cubic feet of natural gas.

Shell contends that a blowout of the type that occurred at Deepwater Horizon would be highly unlikely in Alaska, mostly because the Arctic project would be carried out in shallower water -- 150 feet, compared with Deepwater's 5,000 feet -- and at a much lower well pressure.

"The barriers and contingencies we have in place and the significantly different characteristics of the wells we plan to drill here gives us tremendous confidence that the chances of a similar event taking place in the Alaska offshore is extremely remote," said Curtis Smith, spokesman for Shell Alaska, the Los Angeles Times reports.

But the WWF's recent report, "Not So Fast: U.S. Ill-Prepared for Arctic Offshore Development," states that Shell's proposed drill sites located up to 140 miles off-shore in "hostile conditions" of extreme storms, gale-force winds, moving sea ice, darkness and subzero temperatures would "make it difficult, if not impossible to mount a robust response effort in the event of a major oil spill."

WWF said such a disaster in the Arctic would "devastate" an ecosystem that is home to a wide variety of wildlife including walruses, fur seals and polar bears and that also supports the livelihoods of native Alaskan communities.

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