The Environmental Protection Agency (EPA) has approved a clean-air permit for Shell Oil to proceed with oil and natural gas exploration in Alaska’s Chukchi Sea possibly by as early as this summer.

Shell is seeking to drill three exploratory wells on the Chukchi Sea acreage that it acquired during Lease Sale 193 in February 2008. The producer paid more than $2 billion to acquire leases during the first Chukchi sale in 15 years.

Interior Department’s Minerals Management Service (MMS) estimates that the Chukchi Sea could hold recoverable reserves of 15 billion bbl of crude oil and 77 Tcf of natural gas.

The EPA issued Shell the air quality permit one day after the Obama administration rolled out its new/revised five-year leasing plan for the Outer Continental Shelf, which would postpone until later several Alaska lease sales, including Chukchi, that had been scheduled to be held over the next two years (see Daily GPI, April 1).

Lease sales scheduled under the existing 2007-2012 leasing plan for the Beaufort and Chukchi seas were postponed pending the completion of studies. Interior Secretary Ken Salazar said there were “huge unanswered questions” relative to Beaufort and Chukchi.

Salazar upheld the results of Lease Sale 193 so that Shell can carry out its exploratory activities.

“[EPA’s] approval of Shell’s clean-air permit for Chukchi Sea development…hopefully is a sign of much more responsible oil and gas development to come in Alaska’s resource-rich offshore,” said Sen. Mark Begich (D-AK).

Turning to the Gulf of Mexico (GOM), Salazar announced that the next GOM lease sale (Lease Sale 215) is scheduled for Aug. 18 in New Orleans. MMS estimates that the proposed sale could result in the production of 242-423 million bbl of oil and 1.64-2.64 Tcf of natural gas.

All told, the agency believes that the GOM may hold 36-41.4 billion bbl of undiscovered, economically recoverable oil and 161-207 Tcf of undiscovered, economically recoverable natural gas.

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