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September 11, 2012
Shell may predrill in Arctic

Shell Gulf of Mexico, Inc. has obtained an EPA compliance order allowing the company to exceed permitted air pollutant limits from vessels engaged in drilling and drilling support in Alaska’s Chukchi Sea.  The order is effective for one year.  However, until the U.S. Coast Guard (USCG) certifies an oil containment barge that must be kept near the drill sites, the company will be limited to preliminary drilling activities. 
The EPA compliance order was preceded by a week by the Department of Interior’s (DOI) Bureau of Safety and Environmental Enforcement (BSEE) giving Shell the go-ahead to begin setting up for drilling.  Both moves have infuriated environmentalists but are likely a strategic maneuver by the administration to boost its all-of-the-above energy strategy in anticipation of the November election. 
The United States Geological Survey estimates that the Chukchi Sea and the Beaufort Sea, another area in which Shell wants to drill, hold up to 27.9 billion barrels of oil and 122 trillion cubic feet of natural gas. 
Barge certification
Shell has been working for at least 6 years and spending billions of dollars to obtain federal and state permits that will allow it to begin drilling.  The company’s effort was stalled after the BSEE imposed more rigorous drilling safety and environmental standards for the Outer Continental Shelf following the Deepwater Horizon spill.  More fragile Arctic ecosystems than those in the Gulf of Mexico and ocean ice that might impede cleanups forced Shell to develop a comprehensive oil response plan that includes keeping an oil containment barge near the drill sites.  The barge is awaiting certification by the USCG, the last major step before Shell can actually drill to depths that are believed to contain oil reserves.  Unless Shell obtains an approval from the BSEE to extend the summer drilling season beyond the third week of September, the best the company can do is install the predrilling systems that will put it in position to commence actual oil recovery in 2013. 
BSEE’s current authorization allows Shell to create a mudline cellar, a safety feature that ensures that the blowout preventer is adequately protected below the seafloor.  Shell is also authorized to drill deep enough into shallow non-oil-bearing zones to set the first two strings of casing.
Revised air permit
EPA’s compliance order will allow Shell to proceed with drilling even though emissions from the drilling ship and support vessels may not be able to achieve limits established in an EPA prevention of significant deterioration air permit issued to Shell in January 2012.  In June, Shell requested that the Agency revise the permit based on actual emissions performance.  The EPA is still working on Shell’s request.  The Agency must request public comment on any revisions it proposes to the earlier permit. 
The Public Employees for Environmental Responsibility (PEER) is one of many groups opposing Shell’s plans and the fed’s cooperation.  In June 2012, the BSEE announced that Shell has passed comprehensive testing for the critical capping stack for Arctic drilling.  The PEER made a Freedom of Information Act request to the DOI to obtain the actual cap test data.  According to the PEER, the information has not been provided in the statutory time limit, and the PEER has filed a complaint with the U.S. District Court for the D.C. District to force the DOI to hand it over.
EPA’s compliance order is at http://www.epa.gov/region10/pdf/permits/ocs/shell/discoverer_air_permit_compliance_order_9-7-2012.pdf.

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