Shell is hoping to have key federal air quality permits for its Arctic offshore drilling in the first half of July, a company official said Thursday.
Shell is making important progress, after several years of effort, in securing approvals to explore on leases the company holds on the outer continental shelf in the Beaufort and Chukchi seas, Shell Alaska President Pete Slaiby said in an interview.
A draft air quality permit for the Noble Discoverer, a drill ship under contract to Shell, is now expected July 6, and draft permit for a second drill vessel, the Kulluk, which is owned by Shell, is anticipated on July 15, Slaiby said.
The permits are being developed by the US Environmental Protection Agency's Region 10 office in Seattle, Slaiby said. They are not yet final because they must first go out for a 30-day public review and may be reviewed again by the EPA's internal Environmental Appeals Board if environmental groups file appeals, he said.
"We've had a lot of good support from the Region 10 office in working the issues with these,"Slaiby said. "We are fully engaged in making capital improvements needed" on the drill vessels and support ships to meet stringent air quality requirements, he said.
The company is also working separately with the Bureau of Ocean Energy Management, Regulation and Enforcement on drilling permits that are also needed, Slaiby said. The BOEM is working separately to clear legal issues affecting OCS Sale 193 in the Chukchi Sea. Public hearings on a revised federal Environmental Impact Statement are under way in Alaska this summer.
Shell is hoping for a Record of Decision on the final EIS in mid-September, Slaiby said. The EIS was the point of a lawsuit brought by environmental groups.
"We can now see a clear path toward getting final approvals for drilling," he said. The company's plan is to do drilling in both the Beaufort and Chukchi seas in the summer of 2012.
Shell has been working with EPA on the air quality permits for several years now and previously had setbacks with drilling permits, which are issued by the BOEM, when a federal appeals court blocked drilling in 2007.
The legal issues raised in that litigation have since been resolved.
EPA's Region 10 office in Seattle issued draft air quality permits last year but environmental groups appealed those to the Environmental Appeals Board. Last January, the board sent the permits back to the Region 10 office, noting several deficiencies.
The EPA has been working with Shell since then to correct the deficiencies in the new draft permits expected in July. Under an agreement being worked out with EPA, Shell is making modifications to the Kulluk, which is now stored in Dutch Harbor, to install equipment to reduce air emissions and to update engines.
Similar improvements are also being made on two anchor handling vessels and two ice management vessels that will accompany the drill vessels into the Arctic, Slaiby said.
All of the vessels in Shell's group will also use ultra-low sulfur diesel and Shell has also agreed to haul out mud and cuttings from drilling in the Beaufort Sea by barge, instead of disposing of the mud and cuttings in the ocean, Slaiby said.
