Shell Obtains Permission for Beaufort Sea Drilling

Royal Dutch Shell was recently given permission for limited oil drilling in northern Alaska’s Beaufort Sea. The consent allowed the company to begin one oil exploration well in the area while pursuing another option in the Chukchi Sea.

The Bureau of Safety and Environmental Enforcement of the U.S. Interior Department gave Shell permission to perform low-depth drilling of a well in the Beaufort Sea. The approval follows a similar permit it received a few weeks ago to perform initial oil drilling at the Chukchi Sea.

The decision was criticized by environmentalists even though the permit for the Beaufort Sea does not yet let Shell penetrate any zones that bear gas or oil. The limitations are the same as what was imposed in the Chukchi Sea, where the company was only allowed to drill to around 1,400 feet due to its inability to bring the needed equipment for any possible oil-spill cleanup to the location, according to the agency.

Standards for oil exploration activities have been set by the government for the Arctic and any permitted operations must comply with those regulations, said Jim Watson, the director of the agency.

Curtis Smith, a spokesperson for Shell called the approval of the Beaufort a milestone that paves the way for starting oil drilling in a matter of days. When the hunt for the local Inupiat Eskimo whale is done, Shell will secure its Kulluk drill rig in the area.

Shell is set to carry out on its oil investment in the region as it intends to restart shallow drilling in the Chukchi. The company was only able to drill for a day prior to the drifting of a large ice floe. It plans to re-anchor the Noble Discoverer rig at its Burger prospect very soon and start oil drilling after that.

Smith said that all the preparatory work for a top hole will use up about half the time that drilling a well will require. Whatever drilling the company completes this 2012 will help them be better positioned for next year.

However, environmentalists said that the other well-known setbacks of Shell this year show the downside of developing offshore Arctic oil.

Allowing Shell to drill a top-hole and perform other similar activities when the company is obviously unprepared to handle an oil spill is just like permitting a drunk driver to operate so long as the freeway is avoided, according to Director Rebecca Noblin of the Center for Biological Diversity in Alaska.

In the past years, Shell has already allocated $4.5 billion in oil investment on the offshore frontier of Alaska. It had aimed for three Chukchi Sea wells and two Beaufort Sea wells this season. The company is also thinking of exploring the same number of wells next year. However, those plans were ruined due to the company’s failure to obtain certification of the needed oil spill barge and navigational risks from sea ice.

The Arctic Challenger, the company’s oil-spill recovery barge, has not yet been certified for seaworthiness and several of its essential oil-containment components was ruined during recent trials near the Puget Sound. Shell recently announced that it will halt its efforts to perform oil drilling activities so that it can fix the equipment and get ready for the coming year.