Shell Secures Final U.S. Arctic Drilling Permit, With Conditions

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People on a boat protest against the Shell Oil Company's drilling rig Polar Pioneer, first of two Royal Dutch Shell drilling rigs slated for Arctic oil exploration, in Seattle, Washington, May 14, 2015. The Obama administration approved on Wednesday the final permits necessary for Royal Dutch Shell PLC to begin exploratory oil drilling in the Chukchi Sea off the coast of Arctic Alaska. Matt Mills McKnight/Reuters

The Obama administration approved on Wednesday the final permits necessary for Royal Dutch Shell PLC to begin exploratory oil drilling in the Chukchi Sea off the coast of Arctic Alaska. Drilling could begin within days, reports the Houston Chronicle’s Fuel Fix blog.

The Bureau of Safety and Environmental Enforcement (BSEE) issued “conditional approval” of the last two permits, which grant Shell the go-ahead to drill on the top sections of wells, but not yet deep enough to extract oil, until Shell has all its safety equipment on-site. Shell's capping stack, to be used in the case of a well blowout, is currently aboard the icebreaker ship MSV Fennica, which was discovered to have a hole in its hull earlier this month, and is headed to Oregon for repairs.

“Without question, activities conducted offshore Alaska must be held to the highest safety, environmental protection, and emergency response standards,” BSEE Director Brian Salerno said in a statement Wednesday. “Without the required well control system in place, Shell will not be allowed to drill into oil-bearing zones. As Shell conducts exploratory activities, we will be monitoring their work around the clock to ensure the utmost safety and environmental stewardship.”

The decision is a major blow to environmental groups—including the months-long so-called “kayacktivists” who protested Shell’s presence in the Port of Seattle on its way to the Arctic.

The Bureau of Ocean Energy Management, of the U.S. Department of the Interior, concluded earlier this year that long-term drilling in the Arctic’s Chukchi Sea could come with a 75 percent chance of a major spill in the next 77 years. In other words, if the Chukchi Sea eventually becomes significantly developed (the BOE’s model is based on the hypothetical future scenario of eight production platforms and 500 wells) then one or more spills of 42,000 gallons or more becomes very likely. 

Critics say Shell’s advances into the region are a step closer to that scenario.

“Shell shouldn’t be drilling in the Arctic, and neither should anybody else,” Franz Matzner, the director of the Natural Resources Defense Council’s 'Beyond Oil' campaign, said in an emailed statement following the permitting news Wednesday. “President Obama's misguided decision to let Shell drill has lit the fuse on a disaster for our last pristine ocean and for our climate. Fortunately, Big Oil faces a long road before commercial production of Arctic Ocean oil begins. Any plan to combat climate change over the long term must reverse course in the Arctic now.”

For now, Shell is just planning to drill for data: Its exploratory wells will determine where and how many production wells it could hypothetically drill in the future.

The end of the permitting process comes three years after the government originally issued the same permission to Shell, which hit a snag when Shell’s two Arctic rigs ran aground in 2012. The rigs had to be towed to safety, and a scathing report by the Interior Department found that Shell failed a range of basic operational tasks in the challenging northern environment.

Earlier this year, when the White House initially conditionally approved Shell’s Arctic drilling pending the approval of permits, the federal government determined that Shell’s new exploration plan and the government’s own review of the hazards were up to snuff.