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Salazar Conditionally Approves Shell's Exploration
Plan For Certain Chukchi Sea Leases
Drilling Contingent on Shell Adherence to Stringent Environmental Requirements


December 07, 2009

(SitNews) - Secretary of the Interior Ken Salazar today announced that the Department's Minerals Management Service (MMS) has approved, with conditions, Shell Gulf of Mexico, Inc.'s Exploration Plan to drill three exploratory, information-gathering wells in the Chukchi Sea.

"A key component of reducing our country's dependence on foreign oil is the environmentally-responsible exploration and development of America's renewable and conventional resources," said Salazar. "By approving this Exploration Plan, we are taking a cautious but deliberate step toward developing additional information on the Chukchi Sea."

In 2008, Shell's subsidiary paid $2.1 billion for leases during Chukchi Sea Oil and Gas Lease Sale 193. The 2008 sale was included in the previous Administration's 2007-2012 Five-Year Oil and Gas Leasing Program to cover leasing for oil and gas in the Outer Continental Shelf for that five-year period. It was the first least sale in the Chukchi Sea in over 15 years. The MMS estimates that the Chukchi Sea contains mean technically recoverable reserves of 15 billion barrels of oil and 77 trillion cubic feet of natural gas.

The Exploration Plan now approved allows Shell to drill up to three exploration wells during the July-October open water drilling season.

Shell proposes activities using one drill ship, one ice management vessel, an ice class anchor handling vessel, and oil spill response vessels. The closest proposed drill site is more than 60 miles to shore and approximately 80 miles from Wainwright, Alaska.

"Our approval of Shell's plan is conditioned on close monitoring of Shell's activities to ensure that they are conducted in a safe and environmentally responsible manner," added Salazar. "These wells will allow the Department to develop additional information and to evaluate the feasibility of future development in the Chukchi Sea.

Alaska Governor Sean Parnell welcomed the news that the U.S. Minerals Management Service (MMS) has approved Shell's 2010 Chukchi Sea Plan of Exploration.

"I appreciate the acknowledgment from the Department of the Interior that responsible development can take place in the Arctic," Governor Parnell said. "Alaskans need these jobs and Shell is well prepared to explore for and develop oil and gas basins critical to our domestic energy security."

Alaska's Outer Continental Shelf (OCS) contains an estimated 27 billion barrels of recoverable oil and 130 trillion cubic feet of recoverable natural gas. The available oil is more than twice the amount that has been produced on Alaska's North Slope since the Trans Alaska Pipeline System went online in 1977. Counting its OCS reserves, Alaska likely has more than 30 percent of the nation's recoverable oil and gas.

U.S. Sen. Mark Begich (D-Alaska) today welcomed approval by the Minerals Management Service (MMS) of Shell Inc.'s exploration plan for oil and gas leases in the Chukchi Sea.

"This is another positive step for Alaska's oil and gas industry. While challenges remain, approval of this exploration plan demonstrates Alaska will continue to play an important role in helping meet America's energy needs," Begich said.

"I will continue to work with Interior Secretary Salazar to include protections that address concerns Alaskans and the rest of the nation have to develop these resources in a responsible manner," Begich said. "The successful development of these reserves and those of the Beaufort Sea are key to the long term viability of the Trans-Alaska Pipeline and the future of the Alaska natural gas pipeline."

Begich has met with Administration officials, including Sec. Salazar, several times to push ahead on responsible offshore development. He also accompanied Salazar on his trip to Anchorage and Dillingham in April to meet with Alaskans about offshore development.

U.S. Sen. Lisa Murkowski (R-Alaska) today also welcomed the Department of the Interior's Minerals Management Service's conditional approval of Shell Oil's plan to drill up to three exploratory wells off the northwest coast of Alaska in the Chukchi Sea.

"This is progress," Murkowski said. "Today's announcement from the MMS is an encouraging sign that Alaska's oil and natural gas resources can continue to play a major role in America's energy security."

"While this represents a step forward, significant hurdles remain before exploration can advance in the Chukchi," Murkowski said.

"I congratulate the Department of the Interior for seeking a careful balance of the environmental and energy security needs of the nation in coming to this decision," Murkowski said. "I will continue to work closely with all stakeholders to ensure that this balanced approach continues."

"This is excellent and encouraging news," said Congressman Don Young (R-Alaska) in a prepared statement. "Responsible exploration and development of our resources is the key to the economic future of this country, and a step in the direction of energy independence. Natural resources are the lifeblood of any developed country and the Chukchi Sea has some of the largest potential in the U.S. I am pleased that Secretary Salazar and the Department of the Interior were able to recognize the importance of this project and hopeful that the Environmental Protection Agency will recognize the great opportunities energy exploration will bring our country and complete their permitting quickly."

Although conditional approval has been granted, exploration cannot move forward without air permits from the Environmental Protection Agency and additional environmental analysis requested by the D.C. Circuit Court last April. The 2007-2012 OCS plan is currently undergoing review in response to a U.S. Court of Appeals for the D.C. Circuit order which required additional environmental analysis. The Secretary's decision on the remaining plan is forthcoming.


On the Web:

Q&A - Shell's OCS Chukchi Sea Exploration Plan

Sources of News:

United States Department of the Interior's Minerals Management Service

Office of AK Governor Sean Parnell

Office of U.S. Senator Mark Begich

Office of U.S. Senator Lisa Murkowski

Office of Congressman Don Young


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Ketchikan, Alaska