Arctic waters open for “cautious” leasing after 2012

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Interior Secretary Ken Salazar’s announcement about a ‘cautious’ approach to offshore oil development opens the door to leasing new waters in the Arctic after 2012 and clears the way for full review of a proposed new exploratory well in the Beaufort Sea as early as next summer.

The proposal has been greeted with cheers by many in Alaska who’ve been waiting to move into the new offshore frontier of the Far North, but conservationists warned that more studies should have been done before including the Arctic in the administration’s 2012-17 Outer Continental Shelf leasing plan.

“It is disturbing that Interior proposes to evaluate including the Beaufort and Chukchi Seas in the 2012-2017 five-year plan, despite a severe lack of information and an inability to clean up oil spills in Arctic conditions,” a coalition of the nation’s biggest environmental organizations said in a statement.

“We will proceed with utmost caution,” Salazar said, adding that “cautious, limited exploratory activities” can help improve scientific understanding of the remote, little-known region. He said no new leases would be offered before 2013, and even then, they would proceed only after comprehensive studies of environmental impacts and oil spill cleanup capabilities.

In one of the most closely watched developments, Officials also said they were proceeding with a final environmental assessment for Shell Oil’s proposal to drill at least one exploratory well in the Beaufort Sea as early as next summer, which would be the first substantial new drilling in U.S. Arctic waters in many years.

That announcement was applauded by Shell, whose more ambitious program to drill several wells in both the Beaufort and Chukchi seas has been held up in the courts by conservation and Native Alaska groups concerned that oil operations in one of the world’s most fragile environments could lead to disaster.

“Today’s decision by the administration signals an important direction for companies like Shell to eventually return offshore crews to work providing jobs, adding important revenues, and supporting the economy,” Shell President Marvin Odum said. “While the decision to advance Shell’s application for a Beaufort Sea drilling permit is a positive one, it is important to address the outstanding issues regarding the timely approval of permits both in Alaska and the Gulf of Mexico,” he said.

Though Shell has said it needs a decision by this month in order to launch a drilling program during the brief ice-free months next summer, administration officials said they could not commit to a time line for reviewing permits. They did, however, impose a deadline of Dec. 22 for public comments on Shell’s plan.

“We’re not going to be constrained by any deadlines,” said Michael Bromwich, director of the Bureau of Ocean Energy, Management, Regulation and Enforcement. “We understand that Shell needs a decision, and when we’ve completed the review and analysis, we’ll make a decision.”

But U.S. Sen. Mark Begich (D-Alaska) applauded the decision to begin an environmental assessment and predicted it would mean a ‘green light’ for future offshore oil development in Alaska.

‘This decision to clear the way for responsible oil and gas in Alaska’s resource-rich offshore waters is great news for our state and the nation,’ Begich said. “It’s unfortunate the development was sidelined by this spring’s oil spill in the Gulf of Mexico, but I’m pleased the Obama administration took a hard look and made the right decision.’

The Arctic has been one of the most important battlegrounds for future new domestic oil development. On one hand, it contains what the U.S. Geological Survey has described as possibly the “largest unexplored prospective area for petroleum remaining on Earth.”

Yet the risks of an oil spill in its icy, often-stormy waters are formidable, and conservationists are concerned that taking areas of the Atlantic, Pacific and eastern Gulf of Mexico off the table will lead the oil industry inevitably northward.

“There is now more pressure on the Arctic Ocean,” said Marilyn Heiman, director of the U.S. Arctic program for the Pew Environment Group, which along with other groups has called for more study of how the cleanup technologies that worked only partially in the Gulf of Mexico can be brought to bear in a frozen region that is 1,000 miles from the nearest Coast Guard base.

“I think the question is, what is the pace at which they will do it, and where. The decision about if, when and where to hold these lease sales will be key,” she said.

Michael LeVine, senior counsel for Oceana in Alaska, said the Department of Interior still must review a supplemental environmental review ordered by the courts before proceeding with an additional Shell lease sale, previously approved by the federal government but blocked by a federal judge, in the even-more-remote Chukchi Sea. Conservation groups have found that the new analysis fails to address some of the most important worries about drilling so far into the Arctic.

“The commitment to a new environmental analysis before drilling happens in the Beaufort Sea is good news. The administration, though, should have required Shell to start over, to submit a new plan subject to an entirely new process based on new science and what we know from the Gulf of Mexico,” he said.

Meanwhile, the World Wildlife Fund released a report, similar to one completed recently by the Pew Environment Group, which suggests that cleanup of an oil spill under Arctic conditions would be much tougher than in warmer southerly waters.

‘If we thought the spill in the gulf was a disaster, we’ve not seen anything yet,’ said Bill Eichbaum, the fund’s vice president for Arctic and marine policy. The Arctic is a whole new ballgame. Moving forward at this premature juncture is simply irresponsible.’

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Shell’s plan to begin limited exploratory drilling in the Beaufort Sea next year

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Drilling debate moves offshore

--Kim Murphy