Shell gets OK for Arctic drilling OIL EXPLORATION

The Kulluk is nearly ready for Arctic oil exploration off Alaska's north coast. The orange life rafts carried on the rig are sealed to protect against fire and oil. Each unit carries up to 60 people and can motor away from the rig to safety. Shell now is waiting for one final federal permit and favorable ice conditions to set up in the Beaufort and Chukchi with drilling equipment, support vessels and aircraft. (Mike Siegel/Seattle Times/MCT) less The Kulluk is nearly ready for Arctic oil exploration off Alaska's north coast. The orange life rafts carried on the rig are sealed to protect against fire and oil. Each unit carries up to 60 people and can ... more Photo: Mike Siegel, McClatchy-Tribune News Service Photo: Mike Siegel, McClatchy-Tribune News Service Image 1 of / 3 Caption Close Shell gets OK for Arctic drilling 1 / 3 Back to Gallery

The Obama administration Thursday agreed to immediately allow Shell to drill in Arctic waters, even though a critical spill-containment barge is still a two-week trip away.

Administration officials stressed that Shell is allowed to begin initial site work and to only drill 1,400 feet below the surface of the Chukchi Sea, without penetrating underground oil reservoirs, until that emergency equipment wins Coast Guard certification and is on the site.

Shell Alaska Vice President Pete Slaiby celebrated the development as a major milestone in the company's six-year quest to begin drilling in remote Arctic waters last tapped in the early 1990s.

"Today's announcement is extremely exciting," he told reporters on a conference call. "And our goal of being able to drill in the Chukchi is about to take place."

Administration officials rebuffed criticism from environmentalists who accused the White House of bending over backward to satisfy Shell Oil Co. and drilling advocates in an election year.

"Shell will not be authorized to drill into areas that may contain oil unless and until the required spill-containment system is fully certified, inspected and located in the Arctic," said James Watson, director of the Interior Department's Bureau of Safety and Environmental Enforcement.

But the company will be able "to move forward with limited activities well short of oil-bearing zones that can be done safely now prior to the certification and arrival of the containment system."

The move will allow Shell to salvage what's left of an already brief season for drilling in the remote Beaufort and Chukchi seas before ice covers the water this fall.

But it looks increasingly unlikely that Shell will be able to complete a single Chukchi Sea well, unless regulators relax a Sept. 24 deadline for drilling in hydrocarbon zones there.

Slaiby said it would be "very, very difficult" to finish a well in the Chukchi Sea unless the Interior Department grants the company more time.

The safety bureau authorized Shell to begin initial preparation work at its Chukchi Sea drilling site, including excavations designed to hold a critical emergency device known as a blowout preventer just below the sea floor.