U.S. government oks Shell's Chukchi Sea drilling plan

WASHINGTON (Reuters) - The U.S. Interior Department on Monday approved, with conditions, Shell Oil's plan to drill three exploratory wells in Alaska's Chukchi Sea.

Shell, the U.S. unit of Royal Dutch Shell Plc, paid $2.1 billion in 2008 for leases in the Chukchi Sea when the Bush administration opened up 30 million acres (12 million hectares) in the unexplored area for drilling, in a bid to reduce U.S. dependence on oil imports.

But the oil major had been held up by environmentalists and North Slope residents.

Shell has now been cleared to drill its three wells during the area's July-October drilling season.

"A key component of reducing our country's dependence on foreign oil is the environmentally-responsible exploration and development of America's renewable and conventional resources," said Interior Secretary Ken Salazar.

"By approving this exploration plan, we are taking a cautious but deliberate step toward developing additional information on the Chukchi Sea."

Shell's plan includes using one drilling ship and one ice management vessel. The company would drill no closer than 60 miles from shore.

The department said Shell's plan is conditioned on the government closely monitoring the company's drilling activities to ensure they are carried out in a safe and environmentally-friendly way.

Environmental groups slammed the department's decision.

"We are very concerned because drilling for oil runs the risk of devastating spills in a sensitive marine ecosystem already stressed by dramatic climate change," said Marilyn Heiman, director of the Pew Environment Group's U.S. Arctic program. "Careful scientific research should come before drilling in the Chukchi."

Republican Senator Lisa Murkowski of Alaska said the department's approval of Shell's drilling plan "is progress," but that the company still has several obstacles to overcome.

She pointed out that Shell is still waiting for air permits from the Environmental Protection Agency to conduct exploratory activities off the Alaska coast and the company can't move forward without them.

(Reporting by Tom Doggett; Editing by Marguerita Choy)