Resource Development Council

Shell to seek Beaufort Sea drilling permit

Shell has submitted an application for a permit to drill one exploration well in the Beaufort Sea in 2011. The formal submission to the Bureau of Ocean Energy Management Regulation and Enforcement (BOEM) is specifically for the shallow waters of Camden Bay and continues the regulatory process toward a summer drilling season.

In 2009, the BOEM approved Shell’s Offshore Alaska Plan of Exploration, which was challenged but then upheld by the 9th Circuit Court of Appeals in May of this year. Prior to approval, the BOEM completed a comprehensive Environmental Assessment and issued a Finding of No Significant Impact, in which the agency concluded that Shell’s proposed drilling program would have no significant impact on the marine environment or resources of the Camden Bay area. The agency also determined Shell’s program would not negatively impact subsistence use of those resources.

“We have every reason to believe the Administration will permit 2011 exploration drilling in Alaska,” said Pete Slaiby, Shell Alaska Vice President. “The President, himself, endorsed our Alaska exploration program last spring. Unfortunately, the Deepwater Horizon tragedy occurred and led to a suspension of offshore activities in Alaska. Since then, Shell has taken extraordinary steps to build confidence around our 2011 program, which involves a limited number of exploration wells in shallow water with unprecedented, on-site oil spill response capability. The Administration should approve Shell’s permits, put people to work, and move to validate what we believe is a valuable national resource base.”

Shell also notified the BOEM of its plan to gather drilling mud, cuttings, and various drilling fluids at its Camden Bay wells in 2011, which will further reduce Shell’s offshore footprint.

For its proposed offshore operations, Shell has designed and equipped the most robust oil spill response system in the Arctic known to the industry, and, in accordance with the BOEM’s recent inquiries, Shell has further confirmed that the worst-case discharge volume for its proposed Camden Bay well is lower than previously calculated volumes. While Shell planned its oil spill response system for larger discharge volumes, the new calculation will not decrease the response system’s capabilities.

Shell has also confirmed its commitment to engineer an oil spill containment system, which is designed to capture hydrocarbons at the source in the unlikely event of a shallow water blowout. The containment system will remain staged in Alaska and allow for rapid, on-site recovery for shallow offshore wells in extremely cold water.

“It’s our hope required approvals will come in time for us to begin planning a 2011 drilling season,” said Slaiby. “We are now five years into some of our ten-year lease agreements. Further delays will only serve to jeopardize jobs and the future development of U.S. oil and gas reserves critical to our nation’s energy security.”

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