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Joao Peixe

Joao Peixe

Joao is a writer for Oilprice.com

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Shell Takes a Second Shot at Alaskan Arctic

After suspending drilling off Alaska last year over dangerous conditions, equipment failures and permit delays, Royal Dutch Shell is now preparing to drill new five wells in the Arctic Chukchi Sea, off Alaska’s coast.

According to a revised exploration plan, Shell plans to finish a well started last year, which has been drilled to 1,500 feet so far, and to drill five additional wells at its Burger prospect in Chukchi Sea.

“It is anticipated that this work will take place over a number of drilling seasons,” the 423-page modified plan says.

 To date, Shell has invested well over $5 billion in its Arctic drilling projects and spent six years fighting legal challenges from environmental groups.

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Last year was a disastrous one for Shell in the Arctic, and it opted to suspend drilling altogether before completing a single well. Problems with ice and requirements for permits thwarted Shells Arctic plans in the summer of 2012 and then one of its drill ships, the Kulluk, was damaged when it ran aground.

Shell also had to pay $1.1 million in fines for air quality violations, and ran into problems obtaining an air permit from the Environmental Protection Agency for the emissions from the drill ships.

It’s not a fortuitous start to Shell’s Arctic adventures, and the company is still unsure whether its new plans will move forward. Given this, even Shell isn’t sure it will be drilling there. The company said it had not made a final decision about drilling next summer, but it said that it would file an updated exploration plan in the next couple of weeks.

 “We will continue to take a methodical approach to this exploration phase and will only proceed if the program meets the conditions necessary to proceed safely and responsibly… Our decision to resume exploration will be driven by our readiness to do so safely, not by the need to meet arbitrary timelines,” said Shell spokesman Curtis Smith.

Part of Shell’s new plans banks on the fact that air emissions will now be overseen by BOEM rather than the EPA thanks to legislation that went through Congress in 2011. Shell is hoping it will have better luck with BOEM, but it’s not a given.

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BOEM said it has not yet determined that the company filed all the information required to move to the next step in the approval process. Staff members “are currently assessing the revised EP (environmental plan) filed by Shell to determine whether it contains all required elements to initiate a more comprehensive review,” according to the BOEM’s website. That assessment is expected to be finished by 27 November.

Susan Murray from the environmental organization Oceana, said that instead of continuing to ignore risks and pushing to drill, Shell ought to scrap its plans for the Arctic.

"As other companies appear to recognize, they simply are not ready to operate in the harsh and remote Arctic Ocean environment. There is no proven technology that would allow companies to drill safely in Arctic Ocean conditions, and the risks outweigh any potential benefits," she said.

By. Joao Peixe of Oilprice.com




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