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Shell Approved to Drill Deeper at One Chukchi Prospect

Royal Dutch Shell plc on Monday was given the green light by federal regulators that allows it to drill deeper at one prospect offshore Alaska.

Last month the Department of Interior's Bureau of Safety and Environmental Enforcement (BSEE) granted a Shell unit conditional approval for two drilling permits for the Chukchi Sea (see Daily GPIJuly 22). The drilling was limited to the top sections because a capping stack, required safety equipment to be used for well blowouts, was not on site. The equipment had been sent to Portland, OR for repairs; it is now on site on the MSV Fennica, an icebreaker.

BSEE Director Brian Salerno granted approval for one application for permit to modify, or APM, after an "extensive review and under a robust array of safety requirements." The APM allows exploratory drilling activities into potential oil-bearing zones at the Burger J prospect. Other conditions granted by BSEE, including to protect wildlife, still apply.

An APM has not been approved for the Burger V well, which also is begun. Shell for now is required to limit drilling at that prospect to the top section. Shell is only allowed to drill in the Chukchi for about five more weeks before the winter season prevents activity.

"With modifications to our application for permit to drill approved, we are now authorized to explore hydrocarbon bearing zones at our Burger J well site," Shell spokeswoman Natalie Mazey told NGI. "Drilling began at Burger J on July 30 and crews aboard the Transocean Polar Pioneer continue to make progress. We remain committed to operating in a safe, environmentally responsible manner and look forward to evaluating what could potentially become a national energy resource base.”

Federal officials are monitoring the drilling and are authorized to halt the work if necessary, Salerno said.

"We will continue to monitor their work around the clock to ensure the utmost safety and environmental stewardship."

Environmental groups, some of which have staged protests to prevent needed equipment to be transported to the site, were not happy about the decision.

Sierra Club Executive Director Michael Brune said the decision by the Obama administration "goes against science, the will of the people and common sense. Granting Shell the permit to drill in the Arctic was the wrong decision, and this fight is far from over. The people will continue to call on President Obama to protect the Arctic and our environment."

The decision by the administration "makes it final," said a Friends of the Earth spokeswoman. "President Obama is willing to allow the pristine Chukchi Sea to become an energy sacrifice zone and worsen climate disruption. President Obama should know better -- Shell has no business in our Arctic Ocean, and he will bear responsibility for the damage that Shell wreaks there."

According to Baker Hughes Inc. data, there haven't been more than four rigs working in offshore Alaska since the turn of the century, and there hadn't been a rig drilling in Alaska's waters in nearly a year before one began operating there during the week ending Aug. 7.

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