February 18, 2012 in Nation/World

Shell moves closer to Arctic oil exploration

Company receives response plan approval
Kim Murphy Los Angeles Times
 
Gulf spill update

 A minority stakeholder in the Macondo well project agreed to pay $90 million in civil penalties for its liability in the Gulf of Mexico oil spill, federal officials said Friday.

 The agreement reached with MOEX Offshore LLC 2007, a subsidiary of the Japanese oil company Mitsui, is the first of several settlements expected to come as a major trial over the disaster prepares to open in 10 days.

 On Feb. 27, opening arguments are scheduled to begin in New Orleans in the civil lawsuit brought against BP and other companies by the Justice Department and thousands of Gulf-area residents.

One of the last significant hurdles to offshore oil drilling in the Arctic was cleared Friday with approval of a plan to deal with a nightmare scenario – an oil spill at the top of the world.

The Obama administration accepted Shell Gulf of Mexico Inc.’s plan for responding to an accident should it occur in the Chukchi Sea. The company hopes to begin exploratory drilling there, 70 miles off the northwest coast of Alaska, in June.

The issue of how to clean up a spill in the remote waters, 1,000 miles from the nearest U.S. Coast Guard base, has been the biggest impediment to opening the most significant new frontier in U.S. energy development. But Interior Department officials said Shell’s plan could protect the fragile environment even in the event of a large blowout.

“After an exhaustive review, we have confidence that Shell’s plan includes the necessary equipment and personnel pre-staging, training, logistics and communications to act quickly and mount an effective response should a spill occur,” said James Watson, director of the Bureau of Safety and Environmental Enforcement.

The plan calls for a fleet of six oil-spill response vessels to be on hand at all times, along with a Coast Guard vessel. It also calls for a specially designed capping and containment system that would be able to contain and store an accidental release of up to 80,000 barrels a day.

The worst-case flow volume anticipated from any blowout is 25,000 barrels a day, Watson said.

He said experience with the Deepwater Horizon spill in the Gulf of Mexico prompted a number of changes to Shell’s oil spill response plan for the Arctic. Among them: beefed-up well-drilling standards; the permanent presence of a full-time federal inspector on board; standards and inspections on blowout preventers; and the existence of a second drilling rig nearby to drill a relief well in the event of a blowout.

Conservationists say the plan, as approved, provides no real guarantee that an oil spill would not devastate one of the world’s most fragile environments.

“This is a premature decision,” said Marilyn Heiman, director of the U.S. Arctic program for the Pew Environment Group.


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