The federal government on Friday gave Shell Oil Co. the green light to drill up to six exploratory wells in the Chukchi Sea near Alaska, but major hurdles still remain before the company can launch its Arctic drilling program when ice clears next summer.

Under regulators' conditional approval, Shell must comply with a dozen conditions, including a mandate that it shorten its drilling season so it has time to respond to any emergency before waters ice over.

Environmentalists also have mounted legal challenges against the Environmental Protection Agency's issuance of essential air pollution permits that would govern Shell's drilling in the Arctic waters as well as regulators' separate approval of Shell's drilling plan for the nearby Beaufort Sea.

Shell still has to persuade the federal government to endorse its oil spill response plan for dealing with any accidents in the region. While regulators have now endorsed Shell's broad drilling blueprints for the Chukchi and Beaufort seas, the company still would have to secure separate permits to drill before launching work on individual wells.

In approving Shell's drilling blueprint for the Chukchi Sea, the Interior Department's Bureau of Ocean Energy Management said the company must launch exploration early enough next summer to allow time to drill a relief well or clean up any spill before waters ice over - when cleanup would be difficult, if not impossible. According to the bureau, Shell would have to stop any drilling 38 days before the first day when ice is expected to encroach over the drilling site, typically Nov. 1 or later.

Shell spokeswoman Kelly op de Weegh said that while the company welcomed the bureau's conditional approval as "an important step" toward drilling next July, it was concerned about the requirement that it cut short its drilling season.

"Shortsighted"
"We are concerned this unwarranted restriction could severely impact our ability to deliver a complete Chukchi program," op de Weegh said.

Other Arctic drilling advocates also panned the requirement. Sen. Mark Begich, D-Alaska, said the mandate that Shell pare its drilling season by 38 days was "shortsighted" and "influenced by election-year politics instead of the long-term energy and jobs needs of our country."

All told, the ocean energy bureau laid out 12 requirements for Shell, including some mandates that apply to all offshore drilling programs, such as securing necessary additional permits for the work.

Fishing concerns
Shell must convince regulators it won't harm local subsistence fishing and other activities and prove that it has an adequate system for trapping and siphoning off gushing crude from a runaway underwater well. The ocean energy bureau said Shell would have to prove its ability to deploy that system in a field exercise.

But Arctic drilling foes questioned whether the Interior Department and the bureau would hold firm to those requirements even after Shell has moved drillships to the region and is ready to begin work.

Tommy Beaudreau, the bureau director, stressed that regulators are keeping a close watch on Shell.

Over the next two summers, Shell is proposing to drill up to six wells within the Burger Prospect, which is 70 miles off the coast of Alaska in 140 feet of water. The company also plans to drill up to four wells in the Beaufort Sea.

The waters are shallow but remote - and environmentalists say there is no proven technology adequate for cleaning up crude from the slushy region or containing oil gushing out of a damaged subsea well.

Conservationists also have long complained that there is a lack of baseline data about wildlife in the region and how oil would affect the environment.

But Shell insists it is taking extra steps to prevent spills and respond to them. For instance, the company would use two drillships in the region, ensuring one would be on hand to drill a relief well if necessary.

Separately Friday, Congress moved to exempt Arctic drilling operations from the Clean Air Act, by putting the Interior Department instead of the Environmental Protection Agency in charge of air pollution permits in that region. That is already the practice in the Gulf of Mexico, where the Interior Department has control and air pollution permits typically extend only to the shoreline.

(By Jennifer A. Dlouhy, Washington Bureau / Houston Chronicle, 16/12/2011)