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MMS Accepts New Shell Beaufort Sea Plan for Review

Shell Offshore Inc.'s exploration plan for two leases in the Beaufort Sea has been deemed complete by the U.S. Department of the Interior's Minerals Management Service (MMS). The agency has 30 days to evaluate the plan.

In May the Alaska unit of Royal Dutch Shell plc told MMS it had abandoned its 2007-2009 plan to explore for oil and gas in the Beaufort Sea and would file a scaled-down plan for 2010 that takes into account environmental challenges to its previous plan from residents of Alaska's North Slope (see NGI, May 11). That filing is the one that has now been accepted for review.

"We are pleased the MMS has deemed our 2010 Beaufort Sea Plan for Exploration complete," Shell spokesman Curtis Smith told NGI. "This is one important step of many that must take place before we proceed with our 2010 drilling plan. We will continue to work closely with regulators, local communities and the state of Alaska as we move closer to exploring for oil and gas reserves that could ultimately lead to tens of thousands of jobs, extend the life of the Trans-Alaska Pipeline and increase domestic energy security for decades to come."

As part of its review MMS will prepare an environmental assessment specific to Shell's exploration. Upon completion of the technical and environmental review, MMS must decide if the plan is approved, requires modifications, or is disapproved.

"The responsible development of offshore resources is part of our nation's comprehensive energy plan, which includes a renewed emphasis on conservation and an aggressive effort to develop renewable resources so we can move the nation towards energy independence," said Interior Secretary Ken Salazar. "Now that Shell's plan has reached this important milestone, we will review it carefully to ensure that it is technically sound and will protect the Beaufort Sea and Alaska's environment."

Shell proposes activities limited to the far western area of Camden Bay, including use of one drillship with one tending ice management vessel drilling two wells over the course of one year. The two leases are about 16 and 23 miles north of Point Thompson, AK.

The leases were obtained by Shell Offshore during Beaufort Sea oil and gas lease sales 195 and 202 in 2005 and 2007, respectively. The sales were included in the 2002-2007 five-year oil and gas leasing program and are not affected by the recent court decision on the current leasing program, which sent the 2007-2012 program back to MMS for additional environmental reviews.

Future offshore lease sales were thrown into question when the U.S. Court of Appeals for the District of Columbia Circuit in late April vacated and remanded the leasing plan for 2007-2012 (see NGI, April 27; April 20).

Before MMS would allow activity to proceed in the Beaufort Sea, Shell must also meet the coastal zone management requirements of the state of Alaska, air and water quality rules by the U.S. Environmental Protection Agency, and Marine Mammal Protection Act requirements of the U.S. Fish and Wildlife Service and National Marine Fisheries Service.

The Beaufort Sea is estimated to contain 8.22 billion bbl of oil and 27.64 Tcf of natural gas.

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