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Federal regulators say Shell can start drilling for oil in the frigid waters off Alaska this summer, but it can't go all the way without protection.
The device that would be used to cap any blowout is currently aboard a damaged icebreaker that's heading back to Portland, Oregon, for repairs. So the Interior Department's Bureau of Safety and Environmental Enforcement (BSEE), will let Shell drill only until it's about to hit the layer beneath the seabed where it expects to hit oil or gas — and stop until that "capping stack" arrives at the drill site in the remote Chukchi Sea, about 70 miles north of the Alaskan coast.
The BSEE decision lifts the last hurdle Shell faced in its quest to drill in the Arctic for the first time since its trouble-plagued 2012 expedition. Shell spokeswoman Kelly op de Weegh said the company's vessels are en route to its chosen well site, and drilling can begin once the sea ice clears and the drill rig Polar Pioneer is safely anchored in place.
"We remain committed to operating in a safe, environmentally responsible manner and look forward to evaluating what could potentially become a national energy resource base," op de Weegh told VICE News. Shell expects the icebreaker Fennica, which is carrying the capping stack, will be be repaired and back on site in time to penetrate the portion of the sea floor where it hopes oil will be found, she said.
But environmentalists who have been urging President Barack Obama's administration to block the bid met the government's approval — however limited — with dismay.
"This decision really runs counter to everything Obama has been saying about climate and our responsibility to address climate change," Rebecca Noblin, Alaska director of the Center for Biological Diversity, told VICE News. "As we know, drilling the in the Arctic is a huge risk to the Arctic environment, so we will keep pushing the Obama administration to do the right things and revoke the permits."
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The Arctic has been warming at twice the rate of the rest of the globe, sharply shrinking its summer ice cover. That's allowing companies like Shell the chance to get at more of the vast stores oil and gas estimated to lie under the region — even as scientists warn that those fossil fuels are what's driving climate change.
In a statement announcing the permit, BSEE called the prospect of an undersea blowout "unlikely." Nonetheless, it said drilling operations would be monitored around the clock by federal inspectors on both of Shell's leased vessels, the drill ship Noble Discoverer and the offshore platform Polar Pioneer — and Shell will need the bureau's okay to go deeper once the capping stack shows up.
"Without question, activities conducted offshore Alaska must be held to the highest safety, environmental protection, and emergency response standards," BSEE Director Brian Salerno said. "Without the required well control system in place, Shell will not be allowed to drill into oil-bearing zones."
Opponents argue there's a high risk a Deepwater Horizon-like blowout in the Arctic. Greenpeace warned that Obama "is courting disaster" by letting Shell move ahead.
"It is not too late for President Obama to finally come to terms with the disaster in the Arctic that could happen on his watch," Tim Donaghy, a senior research specialist for the group, said in a written statement. "This approval for Shell to drill in Alaska from the Obama administration is just the latest in a string of concessions for Shell, a company that cannot even make it to the Alaskan Arctic without significantly damaging its equipment."
Shell will be operating at far shallower depths than Deepwater Horizon, which uncorked the worst offshore oil spill in US history when it blew up and sank off Louisiana in 2010. But the Arctic is a far harsher than the usually placid Gulf of Mexico — and Bob Bea, a onetime Shell engineer during the first wave of Arctic oil exploration, said the damage to the icebreaker is a sign that the company isn't prepared to handle the hazards.
"They took a shortcut though shallow water tore a hole in the bottom of the vessel," Bea, who led a government-industry review of offshore drilling after the Gulf disaster, told VICE News.
"That is a sure sign of improper management of system risk." The consequences of an uncontrolled blowout could include losses of bowhead and beluga whales and walruses, along with damage to the native Alaskan communities that depend on them, he said, and neither Shell nor regulators have done enough to prevent them.
"At this point in time we've seen lots of pieces and parts, and many of them represent good, needed improvements," Bea said. "But there's been no clear demonstration that the risks are either acceptable or tolerable."
The company started drilling in the Chukchi Sea three years ago, but the feds halted the work when its containment device failed tests. An engine-room fire put Noble Discoverer out of commission, and at the season's end, the drill platform Kulluk broke loose from its tugs and ran aground in a storm of the state's southern coast.
In December, Noble Discoverer's owners pleaded guilty to eight federal felony counts and paid $12.2 million in fines for trying to cover up the failure of a key piece of anti-pollution gear and the subsequent dumping of oily water from its engine room. The same piece of equipment broke down during a Coast Guard inspection in Honolulu, Hawaii in April, resulting in the ship being held for a day until repairs could be made.
Noblin said BSEE's decision is similar to the last permit Shell received, which allowed it to go ahead before its containment gear was operational.
"As we saw in 2012, Shell still managed to ground a drill ship, so there's a lot that can still go wrong," she said. But environmentalists aren't giving up: They're still challenging Shell's permits in court, and more people have turned out to protest the company's exploration plans.
"I think the tide is really turning," Noblin said. "I think we'll see more protests against Shell and more concern about the impact of drilling in the Arctic. I remain hopeful that we'll be able to convince the administration that it's the wrong thing to do."
In a small win for environmentalists, the decision bars Shell from drilling simultaneously at two sites in order to protect marine mammals. A coalition of environmental groups had urged Interior Secretary Sally Jewell to deny Shell's permits altogether because its two proposed sites are less than 15 miles apart — spacing that the US Fish and Wildlife Service says is necessary to protect sea life like walruses. But BSEE found that limiting drilling to one site at a time will limit any significant harm.
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