Environmentalists to seek a hold on Shell's Arctic permits


Environmentalists to seek a hold on Shell's Arctic permits


WASHINGTON -- Several environmental groups, which have long opposed drilling in the Arctic including the influential Natural Resources Defense Council, are planning to ask the Obama administration to put a formal hold on permits in the region.

The request comes after a drilling rig owned by Shell broke free of a tug boat late last week and then wedged itself on rocks off Sitkalidak Island. According to the groups the accident demonstrates how risky it is for oil companies to operate in the icy, foggy and often stormy conditions near Alaska. Such a request, if granted, could impact Shell and other oil companies plans to return to the Arctic this summer. Shell has already received approval for multi-year exploration plans, but it still needs a few permits before it can continue operating in the region.

Shell's exploratory wells off Alaska's northern coast, started last year, were the first such operations in United States Arctic waters in more than two decades. The $5 billion Arctic drilling program has been plagued by mishaps nearly from the start. Lingering ice prevented the company from dispatching its two rigs to the region for months. Once in Alaska, one rig used by Shell, Nobel Discoverer nearly ran aground in July after becoming unmoored while in port. Equipment failures on the rigs have also been a problem.

United States Department of the Interior and the United States Coast Guard were to investigate the latest accident. A letter was sent to Shell and the United States Coast Guard seeking information on Shell's contingency plans for accidents in the Arctic. The accident involving Shell's Kulluk rig  raises serious questions about the company's ability to conduct these operations safely and in a way that protects the environment, was said in a letter to the Coast Guard.

Shell has said that the accident was a transportation issue and didn't reflect on the overall safety of drilling in the region. The rig's design also makes it resistant to punctures that would lead to leaks and we could easily wait for a week for help needed to get an in Arctic response, the company said. The Interior Department, which oversees offshore oil drilling, wasn't available for immediate comment.

Dow Jones Newswires

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