Shell's Alaska Drilling Nears Final Approval

The Interior Department on Tuesday said that Shell Oil is on track for approval to start exploratory drilling off the coast of Alaska this summer, but that future lease sales in the Arctic Ocean will be delayed in a five-year leasing plan expected to be released later this week.

Interior officials also said the revised five-year leasing plan will exclude more areas from oil and gas drilling in response to concerns by Native Alaskans about intrusions on the ocean fishery.

A five-year leasing plan released by Interior in November called for holding one lease sale in 2015 in the Beaufort Sea and one in 2016 in the Chukchi Sea. The revised plan will stick with the plan for a lease sale in Chukchi in 2016 but delay the sale in Beaufort by two years to 2017.

"The reason for the additional year is to ensure that we have good science to make sure we make the right decision," Deputy Secretary David Hayes explained on Tuesday, responding to questions on the date changes. "We want to make sure that we get it right so we are not going to rush the process," he said.

The original five-year plan, which already excluded a 25-mile buffer zone from leasing because of its importance to fishing, will also be expanded to exclude an additional area north of Barrow, Alaska, that "has a very high subsistence value to Native Alaskan communities," Hayes said.

The changes to the forthcoming lease plan are part of what the agency calls "targeted leasing," which means only opening up areas that are best suited for exploration and development.

Interior officials also said on Tuesday that final permits are likely to be approved soon for Shell's long-awaited exploratory drilling project in the Arctic Ocean, echoing what other administration officials have already said in the last couple weeks.

"We're still in the process of doing the inspections," Interior Secretary Ken Salazar said, but he added that he anticipates that his department will move forward with Shell's project.

Shell has nearly all of the approvals it needs to start drilling in the Beaufort and Chukchi seas, including an oil-spill response plan and other environmental reviews that Interior signed off on in the last several months. The company essentially needs only a final OK from Interior before it can start exploratory drilling in July.

"It is probable that they are going to get these permits," Salazar said on a conference call from Trondheim, Norway, where he and Hayes delivered remarks on Tuesday at the Norway Arctic Roundtable.

The administration has been cautious about promoting its efforts to open up the Arctic Ocean to exploration, given opposition to the project from some environmentalists, but Salazar and other administration officials have insisted that Shell will have intensive regulatory oversight.

Salazar even flatly predicted, "There is not going to be an oil spill," citing the agency's extensive reviews of the project.  "I don't expect that there's going to be a problem," he said.