The Beaufort Sea contains an estimated 8.22 billion barrels of oil and 27.65 million cubic feet of natural gas. Oil operations on the North Slope at Prudhoe Bay have already begun to move into the near-coastal waters, but Shell's drilling plan would take place in two leases located 16 and 23 miles offshore.

"We sincerely believe this exploration plan reflects concerns we have heard in the North Slope communities which have resulted in the programs being adjusted accordingly," Pete Slaiby, Shell Alaska's vice president, said in a statement.

The company has agreed to take a mid-season break in its drilling program, scheduled to begin in July 2010, to accommodate the fall hunting season on bowhead whales undertaken by Native Alaskan villagers, who had feared that noisy drilling activities could injure or scare off the whales.

Conservationists have been fighting in the courts to delay further offshore oil development until studies of the Arctic's fragile and interconnected ecosystem can be done. But the minerals agency said it will work with the company to make sure the development can be conducted "in a safe and environmentally responsible manner."

The march of offshore oil development into the Arctic has been given a boost by the federal Minerals Management Service, which approved Shell Offshore Inc.'s plan to drill exploratory wells in the Beaufort Sea off the coast of Alaska.

The plan calls for an ice-breaking drilling rig as part of a fleet of 14 ships, boats, tankers, barges, tow vessels and specialized ice and water containment equipment.

"We just don't know enough to be going forward with industrial activities in the Arctic," said Michael Levine of Oceana, which has urged a time-out in offshore drilling until effects on endangered whales and polar bears and other Arctic species can be assessed, along with the potentially devastating effects of climate change on the region.

"The reality of offshore oil drilling is that accidents will happen. And when oil spills in Arctic ice, there is no cleaning it up," Chuck Clusen, director of Alaska projects at the Natural Resources Defense Council, said in a statement. "A blow-out like the one that recently despoiled waters off the coast of Australia would leave oil in the waters off the coast of the Arctic National Wildlife Refuge for decades, illing whales, seals, fish and birds and turning irreplaceable spawning and feeding grounds into an ecological wasteland."

In its official comments on the Minerals Management Service's 2010-15 leasing plan for the entire outer continental shelf, the National Oceanic and Atmospheric Administration in September also urged the agency to "more directly address the challenges of Arctic and subarctic spill response...before proposing further oil and gas development in Alaska."

The agency said "no leasing should occur in the Arctic Sea under this proposed plan until additional information is gathered and additional research is conducted and evaluated regarding oil spill risk...and possible human dimension impacts on Alaska Native cultures from oil and gas exploration activities and potential oil spills." Download NOAA comments

The two Shell leases were sold under a previous five-year leasing program for the 2002-07 period.

Alaskan officials have long sought to expand both onshore and offshore oil development in the Arctic, and U.S. Sen. Mark Begich (D-Alaska) applauded the agency's approval, saying it will allow the state to help meet the nation's shortfall in domestic energy production.

"This decision shows...the Obama Administration recognize[s] the importance of Alaska’s abundant offshore oil and gas resources, and it brings us one step closer to environmentally-responsible development offshore of Alaska," Begich said. "They are getting the balance right: including safeguards for important subsistence resources and allowing drilling to go forward."

--Kim Murphy

Photo: British Petroleum's Northstar Island was one of the first near-shore drilling operations in the Beaufort Sea. Credit: copyright BP plc