ALASKA'S NEWSPAPER

| Updated: 12:24 AM

Shell puts Arctic drilling plans on hold

Shell is waiting for clarity on the federal government's position on drilling for oil in the Arctic outer continental shelf following the U.S. Department of the Interior's imposition of a six-month drilling moratorium, said Peter Slaiby, Shell Alaska vice president.

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The moratorium, a part of the fallout from the Gulf of Mexico oil-spill disaster, forced Shell to cancel its planned exploration drilling in the Beaufort and Chukchi seas this summer; the company now hopes to carry out the drilling program next summer.

"We would like a measure of certainty by the end of this year," Slaiby said, adding that Shell does not want to go into 2011 still waiting for permits, as happened in 2010.

And an appeal continues over the issuance of Shell's U.S. Environmental Protection Agency air-quality permits for its offshore drilling,

"We're continuing to push that along," Slaiby said.

Meantime, Shell is continuing with offshore environmental baseline studies, primarily in the Chukchi Sea, during this year's open-water season. And the company will conduct shallow-hazard surveys at sites in the Beaufort Sea's Harrison Bay area, where Shell is exploring in a joint venture with Italian major Eni.

Although Shell does not anticipate any reduction in its Alaska office staffing levels as it continues to try to get its offshore drilling program under way, the cancellation of the 2010 program has resulted in the loss of 600 to 800 jobs in its planned field operations. And hiring large numbers of people and then dropping them again within a short space of time does not work, Slaiby said.

"We can't yo-yo staffing levels," he said.

Shell anticipates using essentially the same exploration plans in 2011 as the U.S. Minerals Management Service approved for 2010, to drill two wells in the Beaufort Sea and up to three wells in the Chukchi Sea. And Shell is confident that its plans can meet new drilling safety requirements.

Some residents and communities along the Arctic coast and environmentalists oppose Shell's exploration.

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