Shell gets EPA OK for Chukchi operations; drilling imminent

Sat Sep 8, 2012 3:51am IST

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* EPA temporarily grants looser emissions guidelines

* Preliminary drilling could begin this weekend

* Alaska environmental group cries foul over waiver

By Yereth Rosen

ANCHORAGE, Alaska, Sept 7 (Reuters) - Royal Dutch Shell on Friday received permission to operate an oil drilling ship and support vessels in the Chukchi Sea, even though the company's activities there are expected to violate previously established air-quality standards, the Environmental Protection Agency said.

EPA said it granted Shell a compliance order allowing the company's fleet to emit pollutants at levels beyond limits set in a major permit issued to the company in January.

Shell in June informed EPA that it could not meet the limits in the permit. The company asked for a modification in standards for nitrogen oxides and particulates, and for a lifting of limits on ammonia.

EPA's compliance order, issued Friday, allows Shell's Discoverer drill ship and its support vessels to operate during the 2012 open-water season with loosened emissions limits. But that reprieve is only temporary, EPA said.

Until EPA takes action on Shell's formal request to change the permit for 2013 operations, the original emissions limits "remain legally in place," the agency said in a statement. Any formal permit changes are subject to public review, said the statement issued by EPA's Seattle-based regional office.

Shell last week received permission from the Department of the Interior to begin drilling in the Chukchi. However, until a required oil-spill barge is on site, the company does not have permission to penetrate oil-bearing zones.

Until the oil-spill barge arrives, drilling in the Chukchi will be limited to preliminary work, boring to a depth of about 1,400 feet below the sea surface, company and Interior officials said last week.

That preliminary drilling is imminent, Curtis Smith, Shell's Alaska spokesman, said Friday. "It's likely to begin this weekend," he said.

The Discoverer drill ship was being anchored in place on Friday in preparation for drilling at the Chukchi prospect targeted by Shell, Smith said.

Six support vessels are in the Chukchi with the Discover, and the oil-spill barge, the Arctic Challenger, was still in the Puget Sound area Friday, awaiting U.S. Coast Guard certification, he said.

The Arctic Challenger is expected to start sea trials early next week, Smith said.

Certification has been delayed because the Coast Guard has not yet endorsed seaworthiness of the vessel.

Shell's Chukchi prospect, called Burger, is about 70 miles offshore.

Meanwhile, a separate Shell drill ship, the Kulluk, is anchored away from the company's drill site in the Beaufort Sea, Smith said. The Kulluk will not be moved to the drill site until local Inupiat Eskimo whalers complete their fall hunt, he said.

The Kulluk and its six support vessels are destined for a prospect called Sivulliq, about 20 miles off the northern Alaska coast.

Environmentalists criticized Interior's decision to grant permission for preliminary drill work in the Chukchi without Coast Guard certification of the Arctic Challenger.

They also objected to EPA's decision to grant Shell a temporary reprieve from its air-permit restrictions.

Issuance of the compliance order "is yet another sign from the Obama administration that they are putting the whims of a corporate giant over the future of one of our nation's most valued natural treasures," Cindy Shogun, executive director of the Alaska Wilderness League, said in a statement.

"Despite Interior Secretary Ken Salazar's assurance that the Obama administration will hold Shell's 'feet to the fire,' Shell could now be polluting in our Arctic waters - after admitting that they can't comply with previously-agreed-to Clean Air Act regulations. It's as if Shell is being rewarded for deliberately failing to play by the rules," Shogan said in the statement.

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