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Arctic rig departs, Shell meets with US regulators on change of plans

Alex DeMarban

Attempting to salvage a shortened drilling season in the Arctic, Royal Dutch Shell is working with federal regulators on a plan that might allow it to do some preparatory drilling soon, according to Financial Times. In anticipation, on Monday Shell's drilling rig, the Kulluk, departed Dutch Harbor, in the Aleutian Islands, heading for Arctic waters.

Europe's largest oil company had hoped to be drilling in the US Arctic Ocean in July, but it now appears it'll be lucky if it's drilling next month. Shell had originally hoped to drill up to five wells in the Arctic's Beaufort and Chukchi seas this season, but the company has scaled back plans to just one to two wells.

The key hold-up has stemmed from construction delays related to Shell's oil-spill containment barge. The Coast Guard and the Bureau of Safety and Environmental Enforcement must sign off on the ongoing upgrade of the 36-year-old Arctic Challenger, sitting in a shipyard in Bellingham, Wash., before final well permits can be issued.

To do what work it can before ice sets in this fall, Shell is negotiating with the U.S. government about a plan to begin so-called "top-hole drilling" before testing of that barge and its oil-capturing system is complete, the Financial Times reports. That means Shell could drill partway into the seabed but must stop before reaching depths bearing oil. The work could allow Shell to get a jumpstart on the wells.

Interior Secretary Ken Salazar, speaking at a press conference in Anchorage last week, said Shell had held "conversations with staff" about the idea, but he'd seen no formal proposal from Shell seeking a change of plans.

"If there's going to be an alternative proposal, that proposal needs to be put on the table," he said.

The Interior Department would look at a formal proposal, but it would be reviewed under existing regulations designed to protect the environment, Salazar said.

Shell is optimistic. The roundish, slow-going drill rig, the Kulluk, left Dutch Harbor for the Arctic on Monday. Shell's plans have the Kulluk slated for work in the Beaufort Sea. The ship, towed by the Guardsman and the Warrior, is expected to reach the area there in two weeks, apparently in hopes of launching drilling after two Iñupiat villages have landed their fall whales.

Shell has signed an agreement with Eskimo whalers to suspend any drilling in the Beaufort starting Aug. 25, until they have captured their bowhead whales, in part because whalers have expressed concerns that anchor lines attached to the rig will make too much noise and frighten away the giants.

The whaling season could be over quickly, or could last weeks. Together, the two villages closest to the Beaufort work -- Nuiqsut and Kaktovik -- will be allowed seven strikes with a whaling bomb. That means, if things go their way, they'll land up to seven whales.

Contact Alex DeMarban at alex(at)alaskadispatch.com