* Review follows grounding of Shell rig in Alaska
* Any delays could threaten Shell's 2013 plans
* Green groups have called for a halt to permitting
By Ayesha Rascoe
WASHINGTON, Jan 8 The U.S. Interior Department
said on Tuesday it will review Royal Dutch Shell's 2012
Arctic oil drilling program to assess the challenges the company
faced and to help guide future permitting in the region.
The announcement follows the grounding of one of Shell's
rigs off the coast of Alaska last week, the latest in a series
of mishaps the company has encountered as it undertakes an
ambitious Arctic oil exploration plans.
"Exploration allows us to better comprehend the true scope
of our resources in the Arctic ... but we also recognize that
the unique challenges posed by the Arctic environment demand an
even higher level of scrutiny," Interior Secretary Ken Salazar
said in a statement.
Any changes in permitting requirements or delays due to the
review could threaten Shell's drilling plans for 2013. The
company faces a limited window during the summer when weather
conditions and regulators will allow drilling.
Interior said it hopes to complete its "high-level"
assessment within 60 days.
Shell has spent $4.5 billion since 2005 to develop the
Arctic's vast oil reserves, but the company has faced intense
opposition from environmentalists and native groups as well as
regulatory and technical hurdles.
The oil giant made some strides last year, actually
beginning preparatory drilling in the Chukchi and Beaufort seas.
But the work was far short of completing up to three wells in
the Chukchi and up to two in the Beaufort as the company had
Instead, Shell's 2012 drilling season was beset by delays
due to lingering ice in Arctic waters and problems with getting
its mandatory oil spill containment vessel certified by the
Shell said it welcomed the department's review, conceding
that it had experienced some challenges.
"We have already been in dialogue with the DOI on lessons
learned from this season, and a high level review will help
strengthen our Alaska exploration program going forward," Shell
spokeswoman Kelly op de Weegh said in a statement.
Interior said it would examine the issues with Shell's
containment vessel, as well as issues with Shell's two drilling
rigs, the Noble Discoverer and the Kulluk.
It was the Kulluk rig that broke away from tow boats last
week and ran aground on New Year's Eve in what were described as
near hurricane conditions.
U.S. Senator Mark Begich, an Alaska Democrat and strong
supporter of offshore Arctic oil drilling, on Tuesday called for
a hearing to examine the Kulluk situation.
"While this incident notably involves marine transportation
and not oil exploration or drilling, we must quickly answer the
many questions surrounding the Kulluk grounding and improve any
regulatory or operational standards as needed to ensure this
type of maritime accident does not occur again," Begich said in
a letter to Coast Guard Commandant Admiral Robert Papp and to
Environmental groups said the Kulluk accident was new
evidence that oil companies were not prepared to operate in the
Arctic, calling on the government to put all permitting in the
area on hold.
One of the groups calling for a pause in permitting, the
conservation group Oceana, said Interior's review is a step in
the right direction, but it must be "more than a paper
"The Department of the Interior, after all, is complicit in
Shell's failures because it granted the approvals that allowed
Shell to operate," said Michael LeVine, Pacific senior counsel
at the ocean conservation group.