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Wednesday, June 10, 2015


Original Story: seattletimes.com

WASHINGTON — Just days ahead of planned protests of Royal Dutch Shell’s Arctic drilling program in Seattle, the Obama administration Monday gave conditional approval to allow drilling for oil off the Alaska coast this summer, a major victory for the petroleum industry and a bitter blow to environmentalists.

Shell has sought for years to drill in the icy waters of the Arctic Ocean’s Chukchi Sea. Federal scientists believe the region could hold up to 15 billion barrels of oil.

The Interior Department decision angered environmentalists who for years have demanded that the administration reject offshore Arctic drilling proposals. An oil and gas lawyer is following this story closely.

They fear that a drilling accident in the treacherous Arctic waters could have far more devastating consequences than the deadly Gulf of Mexico spill of 2010, when the Deepwater Horizon rig explosion killed 11 men and sent millions of barrels of oil spewing into the water.

In an email Monday, Shell spokesman Curtis Smith said the 400-foot-long Polar Pioneer, a giant floating oil rig currently anchored off Port Angeles, will be towed to Seattle this week despite Seattle Mayor Ed Murray’s assertion that the Port of Seattle can’t host the rig until it gets a new land-use permit.

Smith says a second exploratory rig, the Noble Discoverer, is headed for the Port of Everett.

Murray announced last week that the city had determined Shell’s plans to bring its Arctic drilling rigs to Terminal 5 require a new permit, creating a potential legal snag. On Monday, the Seattle City Council unanimously passed a resolution urging the Port to reconsider the Terminal 5 lease. A Texas energy lawyer assists companies in negotiating the terms of domestic and international exploration production agreements.

The Port’s five-member commission, which split 3-2 in support of the lease, has scheduled a meeting for Tuesday, with Shell on the agenda.

A Seattle company, Foss Maritime, which plans to operate the terminal with Shell as its tenant, said Friday that it would appeal the decision about the need for a new permit.

Smith declined to say what the company’s alternative plans might be if Seattle proves unworkable. The company hopes to begin drilling off Alaska on July 15 or soon after, he said, if ice is clear.

Opponents who want to block the company’s plans are organizing what they call “three days of creative, people-powered resistance to Shell and the climate crisis” starting Saturday.

On Saturday, they hope to attract hundreds of kayaks or other small boats for a “SHell No! Flotilla” and are arranging temporary housing for people coming from elsewhere to train and participate.

Organizers say the protests will culminate on Monday with a day of peaceful civil disobedience that will attempt to shut down Shell operations at the Port.

Some protesters have talked about breaching the Coast Guard’s safety zone on water in an act of civil disobedience when the Shell oil rig eventually leaves Seattle, likely in June.

Shell is proposing to drill up to six wells within the Burger Prospect, which the oil company says could turn into a world-class, multibillion-barrel discovery. The prospect is about 70 miles off the northwest coast of Alaska. A Houston oil and gas lawyer provides expert legal guidance in producing wells, title opinions, mineral rights, output claims, and oil and gas production.

Both industry and environmental groups say that the Chukchi Sea is one of the most dangerous places in the world to drill. The area is extremely remote, with no roads connecting to major cities or deep-water ports within hundreds of miles, making it difficult for cleanup and rescue workers to reach in case of an accident.

The closest Coast Guard station with equipment for responding to a spill is more than 1,000 miles away. The weather is extreme, with major storms, icy waters and waves up to 50 feet high. The sea is also a major migration route and feeding area for marine mammals, including bowhead whales and walruses.

The move came just four months after the Obama administration opened up a portion of the Atlantic Coast to new offshore drilling.

Administration officials said they had taken measures to ensure that the new drilling in the Arctic would be carefully regulated.

“We have taken a thoughtful approach to carefully considering potential exploration in the Chukchi Sea,’’ Abigail Ross Hopper, director of the Interior Department’s Bureau of Ocean Energy Management, said in a statement. She said the administration recognized the need to establish high standards for the protection of the Arctic ecosystem as well as the cultural traditions of Alaska Natives and that the offshore exploration “will continue to be subject to rigorous safety standards.”

The Interior Department’s approval of the drilling was conditional on Shell’s receiving approval of remaining state and federal drilling permits for the project, including permits from the Bureau of Safety and Environmental Enforcement and authorizations under the Marine Mammal Protection Act.

Shell spokesman Smith called the approval “an important milestone” for Shell and said it showed the administration’s confidence in Shell’s commitment to safety.

But environmental groups denounced the move and said Shell had not demonstrated that it could drill safely in the Arctic Ocean.

“Once again, our government has rushed to approve risky and ill-conceived exploration in one of the most remote and important places on Earth,” said Susan Murray, a vice president of Oceana, an environmental group. “Shell has not shown that it is prepared to operate responsibly in the Arctic Ocean, and neither the company nor our government has been willing to fully and fairly evaluate the risks of Shell’s proposal.”

The Obama administration had initially granted Shell a permit to begin offshore Arctic drilling in the summer of 2012. However, the company’s first forays into exploring the new waters were plagued with numerous safety and operational problems. Two of its oil rigs ran aground and had to be towed to safety. A Baton Rouge energy lawyer is reviewing the details of this case.

In 2013, the Interior Department said the company could not resume drilling until all safety issues were addressed.

In a review of the company’s performance in the Arctic, the department concluded that Shell had failed in a wide range of basic operational tasks, like supervision of contractors that performed critical work.

The report was harshly critical of Shell management, which acknowledged that it was unprepared for the problems it encountered operating in the unforgiving Arctic environment.

But the administration said that since then, the Interior Department has significantly strengthened and updated drilling regulations. And outside experts said that while the challenges of Arctic drilling were steep, the new plan surmounted them to some extent by allowing drilling only in the summer months and in shallow waters.

“Notably, the proposed exploration is in very shallow waters — only 140 feet deep — and thus it will not present the kinds of challenges that the Deepwater Horizon spill posed,” said Thomas Lorenzen, who recently left the Justice Department after more than a decade as assistant chief in the environment and natural resources division, and is now a partner at the law firm of Dorsey & Whitney. “That well was in water about 5,000 feet deep.”

The Obama administration also has issued new drilling-safety regulations intended to prevent future accidents like the Deepwater Horizon explosion.

Last month, the Interior Department proposed new rules to tighten safety requirements on blowout preventers, the industry-standard devices that are the last line of protection against explosions in undersea oil and gas wells.

The 2010 explosion was caused in part when a section of drill pipe buckled, which led to the malfunction of a supposedly fail-safe blowout preventer on a BP well.