Polar Bore
Shell Gets the Green Light for Arctic Drilling

Yesterday afternoon America’s offshore regulator (the Bureau of Safety and Environmental Enforcement, or BSEE) approved a permit for Royal Dutch Shell to drill in the Arctic, off the coast of Alaska. A rig has already been drilling at the site for the past three weeks, but the BSEE’s final approval will give Shell the go-ahead to plumb depths where oil resides. The LA Times reports:

The most recent [challenge for the company] came last month, when damage to a Shell icebreaker prompted the administration to limit Shell to drilling only preliminary top holes to wells, without entering potential oil-bearing zones, until the vessel was repaired. The icebreaker, the MSV Fennica, was transporting a capping stack, a mandatory piece of equipment used to contain a well in the event of a spill.

Monday’s decision came after Shell completed the repairs late last month in Portland, Ore., and the Fennica then reached the drilling site in the Chukchi Sea, off the western coast of Alaska.

Shell must cease its Arctic operations by the end of September, before sea ice further complicates conditions in the remote and hazardous area.

This moment has been a long time coming for Shell, which has spent $7 billion over the past decade on Arctic drilling ambitions without finishing a well. That persistence may be about to pay off, as shale spokesperson Curtis Smith sounded cautiously optimistic about this new development. “It’s possible we will complete a well this summer but we’re not attaching a timeline to the number of feet drilled”, said Curtis.

Regulatory hurdles and the region’s harsh climate have kept the oil major from realizing its goal of being a trailblazer in tapping Arctic hydrocarbons, and the stakes here are high—the area where Shell was just approved to drill is estimated to contain more than 4 billion barrels of crude. Unsurprisingly the BSEE permit drew the ire of environmental groups, prompting the executive director of Greenpeace USA to comment “[t]he Obama administration should know better than to bend over backwards to approve such a reckless plan.”

Polar ice will melt as surface temperatures rise, and for all the problems that will entail, it will also produce some new opportunities. New trans-Arctic shipping lanes will open up, making the remote region suddenly strategically important, and companies will be eager to tap its hydrocarbons (the USGS estimates the area contains 13 percent of the world’s undiscovered oil and 30 percent of its gas).

It looks like we’re off to the races in the Arctic.

Features Icon
show comments
© The American Interest LLC 2005-2017 About Us Masthead Submissions Advertise Customer Service