Shell will delay Arctic drilling again

ANCHORAGE, Alaska – Shell announced Thursday that it will again postpone its Arctic drilling program, this time to at least 2012, blaming “process” delays in obtaining an air pollution permit from the U.S. Environmental Protection Agency.

Peter Slaiby, Shell Alaska’s vice president, said at a news conference in Anchorage that the decision to forgo exploratory drilling off Alaska’s Arctic coast this summer means a loss of about 800 jobs.

Shell’s decision also sets back the day when the company’s offshore production could begin to help refill the trans-Alaska pipeline as output declines from aging North Slope oil fields, Slaiby said – assuming Shell’s exploratory program leads to development.

Shell has federal leases in the two Arctic Ocean seas on Alaska’s continental shelf: the Beaufort to the north and the Chukchi to the northwest. Slaiby said the company believed about a year ago that the regulatory stars would align for drilling five exploratory wells in the summer of 2010. Then came BP’s disastrous oil spill in the Gulf of Mexico and an unfavorable court ruling, and Shell was back to resetting its plans to this coming summer.