The Environmental Protection Agency announced Thursday it had approved a clean-air permit for Shell to operate its drilling ship in the Chukchi Sea off Alaska's northwest coast.
Shell wants to drill three exploratory wells on the Arctic Ocean acreage it leased in 2008. The company also awaits an air-quality permit for proposed drilling in the Beaufort Sea; a decision will be made this month, Hastings said.
Shell spokesman Curtis Smith said Thursday delivery of the final Chukchi Sea air permit on the heels of Wednesday's news that the company would continue to have access to offshore acreage obtained in 2008 was excellent news. However, he noted the permit must be listed for 30 days before it becomes usable, and it could be appealed to the Environmental Appeals Board.
The U.S. Minerals Management Service estimates the Chukchi holds recoverable reserves of up to 12 billion barrels of oil and 54 trillion cubic feet of natural gas, a promising prospect for oil and gas companies in Alaska, where production has been declining for over two decades.
OPPOSITION TO DRILLING
The EPA announcement Thursday came one day after President Obama and Interior Secretary Ken Salazar announced a revised outer continental shelf leasing program.
The revision was in part a response to a lawsuit by three environmental groups and an Inupiat community. A federal appeals court in Washington, D.C., a year ago agreed that the Interior Department did not properly study the environmental impact of expanding oil and gas drilling off Alaska's coast before issuing its five-year leasing program.
Salazar on Wednesday announced the agency had considered nearly 50 studies for its revised leasing program. For the Chukchi and Beaufort seas, Salazar said, new lease sales would be suspended for at least two years so that additional scientific studies could be conducted and because the estimated benefit is outweighed by potential environmental damage.
However, he sanctioned the 2008 Chukchi lease sale, in which Shell paid $2.1 billion for leases. Information from leaseholders' scientific studies, including whether an oil spill can be cleaned up in broken ice, will help him determine whether additional lease sales are needed between 2012 and 2017, Salazar said.
PRAISE AND CRITICISM
Sen. Mark Begich, D-Alaska, called the EPA's approval great news for the state.
"I'm hopeful we're poised for a renaissance in Alaska's oil patch, with this permit for Chukchi development and the Obama administration's support for OCS development," Begich said.
Rep. Don Young, R-Alaska, also hailed the decision: "It's about time that unelected bureaucrats stop holding Shell's shareholders hostage."
Brendan Cummings, an attorney for the Center for Biological Diversity, called the air permit "highly problematic and likely illegal."
"While Shell's drilling operations would contribute significant amounts of conventional pollutants to the atmosphere, perhaps our biggest concern is that large amounts of black carbon, which directly contributes to Arctic warming, will be released, yet EPA failed to perform any real analysis of such impacts," he said.
The Clean Air Act requires EPA to impose conditions related to greenhouse gas emissions, he said, and Shell's drilling will likely contribute upward of 90,000 tons of carbon dioxide to the atmosphere.
"There was no analysis, much less attempt at regulation of this pollutant," he said.
ALLOWED EMISSIONS
The permit requires the Frontier Discoverer drillship to burn ultra low-sulfur diesel fuel. That and other conditions, including restrictions on operating hours, will reduce particulate emissions by 72 percent and sulfur dioxide emissions by 99 percent, from 181 tons per year to 2 tons, said Janis Hastings, deputy director of EPA's air quality program.
Short-term exposure to sulfur dioxide is linked to adverse respiratory effects and increased asthma symptoms.
The fuel requirement also covers Shell's support vessels when they operate within 25 miles of the drillship.
Shell faces other hurdles before its drilling ship heads north.
The MMS has a court appearance next month in a lawsuit challenging its approval of Shell's Chukchi exploration plan. The 2008 lease sale also is being challenged in Alaska District Court.
The Anchorage Daily News/adn.com contributed to this article.
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