March 31, 2012 / 12:34 AM / 7 years ago

Appeals board upholds Arctic air permit for Shell

The Shell logo is seen at a gas station in Phoenix, Arizona October 29, 2009. Exxon Mobil Corp, Royal Dutch Shell Plc and Eni SpA dashed hopes for an imminent turnaround for the oil industry, saying sluggish economic recovery was weighing on energy demand and prices. REUTERS/Joshua Lott

ANCHORAGE, Alaska (Reuters) - A federal appeals panel has upheld an important air-quality permit issued to Shell (RDSa.L) for planned oil exploration offshore in the Arctic Ocean, bringing the company closer to its goal of drilling wells this summer.

The U.S. Environmental Protection Agency’s Environmental Appeals Board on Friday rejected challenges made by several environmental and Alaska native groups to a permit covering the drill ship and associated vessels Shell plans to mobilize in the Beaufort Sea off northern Alaska.

The groups had argued that the permit allows Shell to emit too much pollution into the atmosphere with too little oversight, in violation of the Clean Air Act.

The permit, originally issued by EPA’s Seattle-based regional office last October, covers the Kulluk drill ship and support vessels, which Shell plans to use to drill up to two wells this year and two more in 2013.

The appeals board in January upheld a separate air-quality permit covering the Discoverer, another drill ship, and the support vessels that Shell intends to use to drill exploratory wells in the Chukchi Sea of northwestern Alaska.

An Alaska spokesman for Shell said the EAB’s confirmation of the permit is “hugely important.”

Until now, “we’ve never fully achieved usable air permits for both of our drilling rigs,” said Shell spokesman Curtis Smith. “The lack of a usable air permit in the past has been considered one of, if not the, most significant obstacle to drilling.”

An EAB ruling in December of 2010 struck down an earlier air-quality permit that Shell had intended to use. In response, Shell and EPA revamped their air-quality plans and permits.

(This version of the story was corrected to say separate permit were issued, from March to January, in paragraph 5)

Editing By Bill Rigby, Gary Hill

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