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Shell Gains Another OK for Chukchi Drilling, One Well At A Time

A unit of Royal Dutch Shell plc has been given the OK to take "small numbers" of polar bears and Pacific walruses incidental to its exploration program this summer in Alaska's Chukchi Sea, but only one well may be drilled at a time.

The U.S. Fish and Wildlife Service (USFWS) issued a letter of authorization (LOA) on Tuesday for subsidiary Shell Gulf of Mexico Inc. regarding incidental takes that is effective through Nov. 1.

Shell had asked for a variance from federal rules that require a 15-mile buffer between wells because it wants to simultaneously bore two wells nine miles apart. The LOA denied the variance request. A 2013 regulation requires a 15-mile buffer around active drilling rigs.

"We have strong requirements, and we have to hold firm on those requirements," said Department of Interior's Tommy Beaudreau, chief of staff to Secretary Sally Jewell. "We expect that Shell will comply with them."

Shell still plans to continue with the summer program, said a spokesman. The producer so far has committed about $1 billion to this summer's drilling program. One rig already is in Alaska and another was on its way from Washington state. Shell would have two contracted rigs at the Burger prospect, which is 70 miles northwest of Alaska's coastline.

"We are evaluating the letter of authorization...and will continue to pursue the 2015 program," said spokesman Curtis Smith "That includes drilling in the Chukchi Sea once open water permits."

Sea ice in the region isn't expected to dissipate until sometime this month. Shell's in-house forecasters expect an opportunity to begin drilling by around the third week of July.

At least one more approval is needed from Interior's Bureau of Safety and Environmental Enforcement before the drilling program moves forward. Shell wants to drill up to six wells using two rigs in the Burger prospect. A fleet of support vessels and aircraft is being readied to continue a program begun in 2012 and likely to continue for several years.

Among other things, USFWS said support vessels would have to be staffed with "dedicated marine mammal observers to alert crew of the presence of walruses and polar bears, and to initiate adaptive mitigation responses." In addition, the support vessels would have to maintain specific distances from the mammals.

The National Oceanic and Atmospheric Administration last month approved the request for an incidental harassment authorization (see Daily GPIJune 16). It already had acknowledged that planned drilling and associated activities would disturb some marine mammals that live in the area or migrate through it.

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