EPA Issues Air Permits to Shell for Offshore Alaska Oil-Drilling Plan

(Dow Jones Newswires), Sep. 20, 2011

The U.S. Environmental Protection Agency said Monday it has issued final air-quality permits to Shell to drill for oil and natural gas in the Arctic waters off the coast of Alaska.

The permits will allow Shell to operate the Discoverer drill ship and a support fleet of icebreakers, oil-spill response vessels and supply ships for up to 120 days each year in the Chukchi Sea and Beaufort Sea Outer Continental Shelf starting in 2012, the EPA said.

The EPA permits have been a major hurdle to the company's Alaska offshore drilling plans, on which the company has invested more than $3.5 billion.

In 2010, the EPA issued similar permits to Shell, but Alaska tribal villagers and environmental groups filed appeals opposing those permits with the Environmental Appeals Board. In December, the appeals board sent the permits back to the EPA to be revised.

The new permits require Shell to cut emissions of soot and nitrogen dioxide from its fleet by more than 50% compared to the levels allowed in the 2010 permits, the EPA said. Shell will use new emissions controls to meet new limits on nitrogen dioxide that went into effect this year, the agency said.

Shell plans to drill up to three wells next year in the Chukchi Sea off the Alaska coast using the Discoverer drill ship, for which the EPA issued the air permits, said Shell spokeswoman Kelly op de Weegh. She added that Shell plans to drill up to two wells in the Beaufort Sea in 2012 using the Kulluk drill ship, although the company is still waiting for a final air permit for that ship.

"The issuance of final air permits for our exploration program is another in a series of recent, positive developments and ads to our confidence that we will be drilling our offshore Alaska leases by July of next year," op de Weegh wrote in an email.

Copyright (c) 2011 Dow Jones & Company, Inc.