Sen. Lisa Murkowski (R-AK) lauded a decision by the Environmental Protection Agency's (EPA) environmental appeals board (EAB) to deny all challenges to clean air permits for Royal Dutch Shell PLC's Noble Discoverer drillship.

Noble Discoverer is expected to drill up to three exploratory wells in Alaska's Chukchi Sea this summer. "The validation of Shell's first air quality permits is almost the end of what has been a long and exhaustive process," said Murkowski. The producer still will need to acquire approvals from at least one more federal agency, the Interior Department.

"I'm relieved that the EPA's internal appeals board chose here not to drag out the process any further, and I hope that the permits for Shell's second drillship, the Kulluk, are similarly confirmed in a timely manner."

The challenge to the the air permits for Kulluk is still before the EAB, and a decision is expected soon, a spokesman for Murkowski said.

Shell, the leading acreage holder offshore Alaska, is now in the sixth year of a 10-year lease that it has been unable to explore due in part to EPA's failure to process valid air permit applications, Murkowski said.

At a conference in Houston Thursday Shell Oil Co. President Marvin Odum said the company was mindful of the Macondo well blowout in the Gulf of Mexico and the criticism that the industry has received because of the response to the accident. Shell was required to obtain more stringent permits to drill in Alaska's offshore and will be working with regulators on its spill response plan and other possible accidents at remote locations.

"We will have every piece of response in Alaska available on a one-hour notice," Odum said in his keynote address to the Academy of Medicine, Engineering and Science of Texas. "The access to the equipment will provide for a much different response than what the world watched in the Gulf of Mexico."

Shell's Alaska offshore drilling will be in waters about 150 feet deep, which is far more shallow than where the Macondo well was drilled, Odum noted. The company also is working with Norwegian experts on how best to respond to potential incidents in colder climes.

The EPA issued Shell air permits in the spring of 2010, but they were overturned on appeal by Alaska Natives and conservation groups. The company shelved its drilling plans last year after objections to its air quality permits were filed with the EAB (see Daily GPI, Feb. 4, 2011).

"This is excellent news for Shell and for moving forward on oil and gas production in Alaska's Arctic," said Sen. Mark Begich (D-AK). This provides "another key piece of regulatory certainty that Shell can work in the Beaufort and Chukchi Seas this summer."

In an attempt to prevent other companies from getting ensnared in the permitting process, the House last year passed legislation that would force the EPA to act on exploratory air permits within a six-month period and would limit the ability of opponents to use the agency's EAB to invalidate the permits for offshore exploration, both offshore Alaska and in the Gulf of Mexico (see Daily GPI, June 24, 2011). Murkowski has introduced companion legislation in the Senate (see Daily GPI, June 20, 2011).

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