* EPA issues permit Shell needs to drill in Chukchi Sea
* Shell plans to drill up to 3 wells off Alaska coastline
* Shell confident it can get other permits needed to drill
By Yereth Rosen
ANCHORAGE, Alaska, April 1 Royal Dutch Shell
(RDSa.L) has secured a critical U.S. regulatory permit to
conduct planned exploratory oil drilling this year in Alaska's
Chukchi Sea, regulators and the company said on Thursday.
The Environmental Protection Agency has authorized
emissions from Shell's drill ship and support vessels, issuing
a final air-quality permit.
The permit comes a day after the Obama administration
affirmed support for exploration in Arctic waters off Alaska.
It is the first "major-source" air-quality permit ever issued
for the Arctic outer continental shelf, EPA officials said.
Shell has been seeking the permit for years, a spokesman
said. He said the company is confident it can get the rest of
the permits it needs for the Chukchi, which the U.S. Minerals
Management Service (MMS) has estimated holds about 15 billion
barrels of recoverable oil and 77 trillion cubic feet of
Only five exploratory wells have ever been drilled in the
Chukchi because despite the estimated abundance of recources,
remoteness and harsh conditions have discouraged exploration.
The EPA permit is "one of the major milestones we needed to
fall in place so we would continue to plan for drilling in
2010," said Curtis Smith, spokesman for Shell in Alaska.
The final air-quality permit is subject to public comment
and could be appealed.
The MMS approved Shell's Chukchi Sea drill plan on Dec. 7.
The company plans to drill up to three wells at two prospects
located about 75 miles (120 km) off the northwest Alaska
Shell first drilled the prospects, Burger and Klondike, two
decades ago. It abandoned the prospects, but won back
exploration rights for $2.1 billion in a lease sale held in
2008 by the MMS.
Shell still needs permits from other agencies to drill in
the Chukchi, "But we have a high degree of confidence that we
will achieve those permits," Smith said.
Shell made concessions to secure the permit, including use
of ultra-low-sulfur diesel fuel to reduce air pollution in the
fleet, Jan Hastings, EPA regional deputy air-quality director
at the Seattle office, said in a telephone news conference.
The final EPA permit for Shell's Chukchi operations sets
limits for air pollutants such as sulfur dioxide and
particulates. It addresses public concerns on a draft
air-quality permit issued on Jan. 8.
Separately, Shell also plans to drill two wells this year
at prospects in the Beaufort Sea off Alaska's northern coast.
Shell spent $84 million acquiring exploration rights there in
MMS lease sales held in 2005 and 2007.
A decision on the Beaufort permit, issued in draft form in
February subject to public comment, is due later this month,
(Editing by Bill Rigby and David Gregorio)