The Obama administration on Thursday made a surprise announcement that it will allow Shell Oil Co. to begin drilling in the Chukchi Sea before its unique oil spill containment barge is ready -- just not deep enough to reach oil.
For weeks, the problematic barge has held up Shell's drilling plans in the Alaska Arctic. It's undergoing final work and inspections at a shipyard in Bellingham, Wash.
U.S. Interior Secretary Ken Salazar told reporters in a news briefing that the newly approved drilling will reach 1,400 feet or so under the sea floor and is limited to specific preparatory work.
"Today's action does not allow Shell to drill into potential oil reservoirs," Salazar said.
Environmental groups immediately criticized the decision as too risky for the fragile Arctic. Alaska Sens. Mark Begich and Lisa Murkowski and Gov. Sean Parnell praised it as a long awaited step forward.
The oil spill containment barge, the Arctic Challenger, must be completed, clear inspections, and make the long ocean journey to drilling sites before Shell can drill all the way to oil-rich zones, Salazar said. Those zones are perhaps 5,500 feet or so below the sea floor, according to Shell.
Still, allowing Shell to begin well construction at its prized Burger prospect is an enormous step, said Pete Slaiby, Shell's vice president for Alaska. He and other Shell officials in the Frontier Building in Midtown Anchorage learned the news by listening on speaker phone to the Interior Department's press conference. Some cheered, he said. There was an undercurrent of disbelief, a Shell spokesman said.
"Ladies and gentleman, there's no other way to couch this. Today's announcement is extremely exciting," Slaiby told reporters in a separate briefing. "We've been waiting for this for about six years."
Inspectors around the clock
The U.S. Geological Survey estimates a potential resource of 25 to 27 billion barrels of oil in the Chukchi and Beaufort Seas.
It is highly unlikely that Shell will be able to complete a well this year in the Chukchi Sea without an extension of the drilling season, which it is seeking. But foundational well work begun this year will give Shell a head start in 2013.
The chance of a spill is virtually nonexistent because of the distance from oil-rich layers, Shell and regulators agree. While officials acknowledge Shell could hit a natural gas pocket, they said that risk is also small.
Regulators will still hold Shell's "feet to the fire," Salazar said. Inspectors from the Bureau of Safety and Environmental Enforcement will be on Shell drilling rigs 24 hours a day as the work is being done, he said.
And while the containment barge won't yet be stationed nearby, the foundational work approved Thursday includes installation of a blowout preventer designed to seal the well if drillers lose control of the pressure.
Other oil response equipment is already in place on the outside chance of a spill, Slaiby said. A specialized oil spill response vessel already is in the Chukchi, and another vessel there is carrying a capping stack. That's the type of apparatus that eventually killed the out-of-control well after the Deepwater Horizon drill rig exploded two years ago.
"There is no doubt that any exploratory activities will be conducted under the closest oversight and most rigorous safety standards ever implemented in history of the United States," Salazar said.
