Shell gets permits for limited oil drilling in Arctic waters

ANCHORAGE, Alaska – The Obama administration has given Royal Dutch Shell PLC approval to begin limited exploratory oil drilling off Alaska’s northwest coast.

The two permits issued Wednesday clear the way for drilling in Chukchi Sea, but with conditions.

Shell can only drill the top sections of wells because the company doesn’t have critical emergency response equipment on site to cap a well in case of a leak. That equipment is aboard a ship headed to Portland for repairs.

The Interior Department’s Bureau of Safety and Environmental Enforcement said in a statement that Shell could submit an amended application for deeper drilling when the capping stack can be deployed within 24 hours.

“Without question, activities conducted offshore Alaska must be held to the highest safety, environmental protection and emergency response standards,” said the bureau’s director, Brian Salerno.

The department had given a conditional OK to Shell’s drilling plan in May, pending the company’s ability to obtain all necessary permits from state and federal agencies.

Some environmental groups worry the Arctic’s remoteness and rugged conditions will hamper cleanup efforts in the event of a spill, risking devastation of a fragile ecosystem.

Cindy Shogan, executive director of the Alaska Wilderness League, called it the wrong choice.

“This decision puts the fate of the fragile Arctic Ocean, and our climate future, in the hands of Shell Oil,” she said in a statement.

Proponents say drilling can be conducted safely with existing technologies and that future production decades from now will help sustain the country’s energy needs and limit reliance on imports.

Shell spokeswoman Kelly op de Weegh said by email that receipt of the drilling permits signals the end of the permitting process, and drilling will begin when the area is clear of sea ice.

Shell and other companies hope to tap into one of the country’s last great petroleum reserves. The U.S. Geological Survey estimates the Arctic offshore reserves in the Chukchi and Beaufort seas at 26 billion barrels of recoverable oil.