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U.S. Administration Approves Shell Plans for Arctic Drilling

As of May 11th, 2015, the American Bureau of Ocean Energy Management (BOEM), part of the Obama Administration’s Interior Department, has conditionally approved plans for Shell Gulf of Mexico, Inc. to begin exploratory drilling for oil and gas in the Arctic Ocean this summer. Approval of this multi-year plan represents a significant victory for the energy giant, which will be the only company drilling in the federal waters off the Alaskan coast.

This approval comes following the completion of a number of steps in the regulatory process which have represented the administration’s consideration of Shell’s plans. With the conclusion of the BOEM’s review and consideration of submitted public and stakeholder comments, the exploration plan has been officially sanctioned by the government administration. Abigail Ross Hopper, director of the BOEM, has stated that the agency took a “thoughtful approach” to the requests for drilling permits, “recognizing the significant environmental, social and ecological resources in the region”.

Additionally, in February of this year, the BOEM and the Bureau of Safety and Environmental Enforcement (BSEE) released a set of proposed regulations regarding exploratory drilling activities on the American Arctic Outer Continental Shelf. Focused solely on drilling operations within the Beaufort and Chukchi Sea Planning Areas, the regulations define operational standards, with the goal of ensuring safe and responsible offshore exploration drilling in the Arctic. Following the publishing of these proposed Arctic regulations in the Federal Register, the American public now has a 60-day comment period (ending May 27th) in which to submit their comments and concerns on the proposed rules. These further regulatory terms have been adopted as conditions on Shell’s Arctic operations.

Before the company can begin drilling, however, they will still need to obtain other permits from state and federal agencies. This includes one for drilling from the BSEE, as well as government opinions that they will comply with the Endangered Species Act. They will also need a permit from the Port of Seattle, in order for Shell’s tankers to lease a terminal there.

While the BOEM’s approval is a victory for the petroleum industry, environmental activists are lamenting the decision. Given the extreme remoteness of the Chukchi Sea area, it will be an arduous task to provide rescue and cleanup services in the case of an accident. This could mean the difference between a manageable accident and an uncontrollable disaster, if Shell is not adequately prepared.

Environmental activists have planned a protest for Saturday against Royal Dutch Shell in the Port of Seattle. Protesters on land and in kayaks plan to try blocking the movement of one of the company’s drill ships in the port, where the company hopes to base their drilling fleet for part of the year.

 

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