Obama Administration Approves Shell Drilling in Arctic Ocean

by Coral Davenport / New York Times

The Obama administration gave conditional approval on Monday to allow Shell Gulf of Mexico Inc. to start drilling for oil and gas in the Arctic Ocean this summer.

The approval is a major victory for Shell and the rest of the petroleum industry, which has sought for years to drill in the remote waters of the Beaufort and Chukchi seas, which are believed to hold vast reserves of oil and gas.

Activists trained on kayaks last week in Puget Sound in advance of a floating protest of Royal Dutch Shell in the Port of Seattle.

The Port of Seattle has agreed to a lease with Royal Dutch Shell that would allow the petrochemical giant to bring its Arctic Ocean drilling rigs to the city’s waterfront.

“We have taken a thoughtful approach to carefully considering potential exploration in the Chukchi Sea, recognizing the significant environmental, social and ecological resources in the region and establishing high standards for the protection of this critical ecosystem, our Arctic communities, and the subsistence needs and cultural traditions of Alaska Natives,” Abigail Ross Hopper, director of the Interior Department’s Bureau of Ocean Energy Management said in a statement. “As we move forward, any offshore exploratory activities will continue to be subject to rigorous safety standards.”

The Interior Department decision is a devastating blow to environmentalists, who have pressed the Obama administration to reject proposals for offshore Arctic drilling. Environmentalists say that a drilling accident in the icy and treacherous Arctic waters could have far more devastating consequences than the deadly Gulf of Mexico oil spill of 2010, when an oil rig explosion killed 11 men and sent millions of barrels of oil spewing into the water.

The move came just four months after the Obama administration opened up a portion of the Atlantic coast to new offshore drilling, adding a new chapter to the president’s environmental legacy.

On some fronts, President Obama has pursued the most ambitious environmental agenda of any president, issuing new regulations designed to curb climate change, working toward an international global warming accord, and using his executive powers to put public lands off-limits from development. But he has also sought to balance those moves by opening up untouched federal waters to new oil and gas drilling.

The Interior Department’s approval of the drilling was conditional on Shell’s receiving approval of a series of remaining drilling permits for the project.

“The approval of our Revised Chukchi Sea Exploration Plan is an important milestone and signals the confidence regulators have in our plan,” said Curtis Smith, a spokesman for Shell. “However, before operations can begin this summer, it’s imperative that the remainder of our permits be practical, and delivered in a timely manner. In the meantime, we will continue to test and prepare our contractors, assets and contingency plans against the high bar stakeholders and regulators expect of an Arctic operator.”

Environmental groups denounced the move and said that Shell had not demonstrated that it can drill safely in the Arctic Ocean.

“Once again, our government has rushed to approve risky and ill-conceived exploration in one of the most remote and important places on Earth,” said Susan Murray, a vice president of Oceana, an environmental group. “Shell’s need to validate its poorly planned investment in the U.S. Arctic Ocean is not a good reason for the government to allow the company to put our ocean resources at risk. Shell has not shown that it is prepared to operate responsibly in the Arctic Ocean, and neither the company nor our government has been willing to fully and fairly evaluate the risks of Shell’s proposal.”

The Obama administration had initially granted Shell a permit to begin offshore Arctic drilling in the summer of 2012. However, the company’s first forays into exploring the new waters were plagued with numerous safety and operational problems. Two of its oil rigs ran aground and had to be towed to safety. In 2013, the Interior Department said the company could not resume drilling until all safety issues were addressed.

In a review of the company’s performance in the Arctic, the department concluded that Shell had failed in a wide range of basic operational tasks, like supervision of contractors that performed critical work.

The report was harshly critical of Shell management, which acknowledged that it was unprepared for the problems it encountered operating in the unforgiving Arctic environment.