Shells' Arctic drilling program begins
September 10, 2012
The decision will allow Shell to build a mudline cellar and install pre-drilling infrastructure in the Chukchi Sea before the Coast Guard gives final approval of its containment vessel. Under the permit approved on August 30th, Shell will be allowed to begin certain preparatory activities in the Chukchi Sea that will increase overall safety. These activities include the creation of the mudline cellar, a safety feature that ensures that the blowout preventer is adequately protected below the level of the seafloor. Shell is also authorized to drill and set the first two strings of casing into shallow non-oil-bearing zones.
The Arctic waters off Alaska’s northern coast contain an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas, according to the federal government.
“It is our highest priority that any activities that occur offshore Alaska be held to the highest safety, environmental protection, and emergency response standards,” said Watson. “Shell’s applications for permits to drill into potential oil reservoirs remain under review, and 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. Today’s announcement authorizes Shell 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.”
Under conditions and requirements set forth in Shell’s Chukchi and Beaufort Sea Exploration Plans and Oil Spill Response Plans, which were approved by the Bureau of Ocean Energy Management (BOEM) and BSEE respectively, Shell is required to receive certification of its containment system, which is designed to capture flowing liquid hydrocarbons in the unlikely event of a loss of well control, by the U.S. Coast Guard and have the vessel positioned in the Arctic before any drilling into oil-bearing zones can occur. BSEE engineers recently conducted an initial inspection of Shell’s containment system, but the company has yet to secure the final Coast Guard certification.
In a prepared statement, U.S. Senator Lisa Murkowski (R-AK) said the decision by BSEE is a positive step that will allow Shell to begin necessary preparatory work, while maintaining the highest environmental standards to ensure the protection of the Arctic. Murkowski said. “While we would all like to see a discovery this summer, the most important thing is for Shell to continue to make progress and demonstrate once again that Arctic drilling can be done safely."
“While many environmental activists continue to cast doubt on Arctic production, we know from experience that development can be carried out safely – more than 100 wells have been drilled in the Beaufort and Chukchi seas since the 1970s,” said Murkowski, the ranking Republican on the Senate Energy and Natural Resources Committee.
Alaska's Goveror Sean Parnell also welcomed the news that the Department of the Interior will allow Shell to conduct preparatory work in the Chukchi Sea prior to having the Arctic containment system certified.
Gov. Parnell said this news enables Shell to advance efforts, even in a short drilling season. Parnell said. “This takes us one step closer to long-awaited exploration. Projects such as these help us toward our goal of shipping one million barrels a day through our world-class pipeline. Preparation has long been under way and has already put thousands to work in nine states, while yielding billions of dollars to our federal treasury and regional economies – all before drilling the first well. Arctic exploration not only drives economic development, but it also lessens our dependence on unstable regions of the world.”
U.S. Sen. Mark Begich (D-AK) was also pleased to see the Interior Department recognize the importance of moving ahead with exploratory drilling this summer.
Begich said the decision shows flexibility while not sacrificing safety. "This allows us to get one step closer to understanding and moving forward on the energy potential of the Arctic," said Begich.
However, not everyone is pleased with the decision. Eric Myers policy director for Audubon Alaska said, “Time and again, Shell has shown that it’s not ready to handle the harsh conditions of the Arctic Ocean. They lost control of their drill ship in a calm harbor, they’ve not even finished building the oil spill response barge, they’ve admitted they can’t comply with their air pollution permit, and they said they could clean up 90 percent of a spill but now say they would only ‘encounter’ 90 percent of a spill. But now Shell wants to bend the rules and move forward anyway, said Myers. “The stakes are too high. The Department of the Interior must hold Shell accountable and protect our air and waters," he said.
Greenpeace Deputy Campaigns Director Dan Howells said, “Whatever Shell is able to do in the narrow window between now and when the sea ice returns, it won’t erase the clear evidence we’ve seen in the past two months that there’s no such thing as safe drilling in the Arctic."
Howells said, “Shell has ignored the world’s best scientists, as well as millions of people around the world, who have all said repeatedly that the melting Arctic is a dire warning, not an invitation to make a quick buck. The company’s Arctic drilling program this summer has not only been an epic PR failure, but a dangerous logistical failure as well. They’ve only proven one thing this summer, that oil companies are simply not equipped to deal with the unique challenges of operating in the Arctic."
“Shell is in the vanguard of a new Arctic oil rush, but a global movement is growing to stop this from happening. This is one of the defining environmental battles of our age, and these companies are lining up on the wrong side of history," said Howells.
The Bureau of Safety and Environmental Enforcement (BSEE) inspectors will be present on the Noble Discoverer to provide continuous oversight and monitoring of all approved activities. BSEE safety experts have already conducted thorough and comprehensive inspections of the drillship and Shell’s response equipment.x
In a prepared statement, Shell said it has dedicated more than six years to gain the confidence and trust of regulators and to earn to the right to begin this historic operation. "We appreciate the effort the Department of Interior has made to understand, scrutinize, and support this project of national significance. In the weeks ahead we look forward to operating safely and responsibly, putting Americans to work and finding out even more about the oil and gas reserves that are believed to lie under Alaska’s Chukchi Sea."
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