U.S. allows Shell to drill for oil in Arctic Ocean off Alaska

The U.S. government on Monday gave Royal Dutch Shell the final permit it needs to drill for oil in the Arctic Ocean off Alaska's northwest coast for the first time in more than two decades.

The Bureau of Safety and Environmental Enforcement announced that it approved the permit to drill below the ocean floor after the oil giant brought in a required piece of equipment to stop a possible well blowout.

The agency previously allowed Shell to begin drilling only the top sections of two wells in the Chukchi Sea because the key equipment, called a capping stack, was stuck on a vessel that needed repair in Portland, Ore.

Since the vessel arrived last week, Shell is free to drill into oil-bearing rock, estimated at 2,400 metres below the ocean floor, for the first time since its last exploratory well was drilled in 1991.

"Activities conducted offshore Alaska are being held to the highest safety, environmental protection, and emergency response standards," agency Director Brian Salerno said in a statement Monday. "We will continue to monitor their work around the clock to ensure the utmost safety and environmental stewardship."

Environmental groups oppose Arctic offshore drilling, saying industrial activity will harm polar bears, Pacific walrus, ice seals and threatened whales already vulnerable from climate warming and shrinking summer sea ice. They say oil companies have not demonstrated that they can clean up a spill in water choked by ice.

"It sends a terrible signal to the rest of the world for the United States to be using public resources to promote that development," said Niel Lawrence of the Natural Resources Defence Council. "We have to make clear to the rest of the world that we are all in on a clean energy future. And we've got to stop giving the rest of the world license to go exploring by permitting Shell to do it."

The U.S. Geological Survey estimates that U.S. Arctic waters hold 26 billion barrels of recoverable oil, and Shell is eager to explore in a basin that company officials say could be a "game changer" for domestic production.

Government requires capping stack

Shell bid $2.1 billion US on Chukchi Sea leases in 2008 and has spent upward of $7 billion on exploration there and in the Beaufort Sea off Alaska's north coast.

Shell hopes to drill two exploration wells during the short 2015 open-water season. It has until late September, when all work must stop. It has two drill vessels and about 28 support vessels in the Chukchi Sea.

The permit to drill deep into the ocean hinged on the arrival of a capping stack, which is a roughly 10-metre device that can be lowered over a wellhead to act like a spigot to stop a blowout. The government requires Shell to have the device ready to use within 24 hours of a blowout.

The capping stack sits on a 115-metre icebreaker that suffered hull damage July 3 as it left Dutch Harbor, a port in the Aleutian Islands. The vessel named the Fennica was repaired in Portland, Ore., and briefly delayed from leaving July 30 by Greenpeace protesters in climbing gear hanging from a bridge over the Willamette River.

The Fennica reached the drill site 70 miles off Alaska's northwest coast Aug. 11. 

When asked whether the administration was sending contradictory messages, White House spokesman Frank Benenati said the administration has invested heavily in renewable energy so that the U.S. can transition off fossil fuels.

"But it's also true that we cannot make that transition overnight, which is why we have taken steps to ensure safe and responsible development of our domestic energy resources that benefits our economy and enhances global energy security, with safety remaining paramount," Benenati said.

U.S. President Barack Obama will go to Alaska at the end of the month to stress the dangers of climate change. He says Alaskans are on the front lines of the problem.