US Issues Potential Setback To Shell's Arctic Drilling Plan
WASHINGTON, June 30 (Reuters) - The Obama administration dealt a setback to Royal Dutch Shell's Arctic oil exploration plans on Tuesday, saying established walrus and polar bear protections prevent the company from drilling with two rigs simultaneously at close range, as it had planned.
The U.S. Fish and Wildlife Service issued Shell a permit which emphasized that under 2013 federal wildlife protections, companies must maintain a 15-mile (24-km) buffer between two rigs drilling simultaneously.
The rule is meant to protect populations of animals sensitive to sounds and activities of drilling. Walruses have been known to plunge off rocks into the sea during drilling, putting some at risk. The animals are already at risk from reduced habitat due to global warming.
Drilling with only one rig at a time would slow Shell's drilling progress, but by how much was unclear. Shell, which has invested about $7 billion in its Arctic exploration over several years, is evaluating the permit and "will continue to pursue" its drilling plan, spokesman Curtis Smith said. The company hopes to begin producing oil there in 10 or 15 years.
"Our goal is to safely accomplish as much work as we can before the end of open water season." The return of ice in late September ends the drilling season.
In Shell's 2015 Arctic drilling plan, no two of its wells are more than 15 miles apart. Two of the wells it had been planning to drill in the Chukchi Sea off Alaska are about nine miles (14 km) apart.
The move by the federal government came the same day that Shell began to send the Noble Discoverer, the second of two drilling rigs, up to Alaska from the Seattle area, for drilling starting in late July. Shell was hoping to return to Arctic drilling for the first time since its mishap-plagued 2012 season.
Last week, green groups had said the wildlife rules could hamper Shell's drilling season. On Tuesday, an environmentalist blasted the company's blueprint for the Arctic that the Interior Department conditionally approved in May, pending permits including Fish and Wildlife's.
"Shell's whole drilling plan is premised on a plan that is unlawful from the start," said Erik Grafe, a lawyer at Earthjustice in Anchorage.
Shell can still drill with one rig at a time this summer, if it gets a few more permits, the Interior Department said.
(Additional reporting by Eric M. Johnson in Seattle,; Editing by Andrew Hay and David Gregorio)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Subsea7 Secures Contract to Service Woodside's Trion
- These Factors Helped Brent Oil Price Break Above $85
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- Gaz System to Acquire Gas Storage Poland
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension