By Yereth Rosen
ANCHORAGE, Alaska, Sept 6 (Reuters) - Shell has agreed topay $1.1 million for air-quality violations from the vessels itused to drill two oil-exploration wells in Arctic waters offAlaska last year, federal regulators said.
Shell will pay the civil fines for Clean Air Act violationsthat were discovered during inspections of the Discoverer andKulluk drillships, which operated in the Chukchi and Beaufortseas, the Environmental Protection Agency said late on Thursday.
The breaches of air-quality permits that Shell needed tooperate in the icy waters were among several mishaps for the oilgiant as it sought to explore in the remote but potentiallypetroleum-rich Arctic outer continental shelf.
First, equipment problems delayed the start of its drillseason. Instead of the five wells it had planned to complete in2012, Shell could do only preliminary drilling on two wells, alimit placed by regulators because of equipment failures on arequired oil-spill vessel. The Discoverer, contracted from NobleCorp, was detained for safety and environmental problems.
It all culminated with the grounding of the Kulluk during aDecember storm near Kodiak Island. Federal investigations werelaunched into the grounding and the Discoverer's shortcomings,and the Department of Interior now plans to issue new rules forArctic drilling by the end of the year.
The violations resolved by Shell's settlement includeexcessive hourly nitrogen-oxide emissions on the drillships andsupport vessels and lapses in use of emissions-cleansingequipment.
The agreement requires Shell to pay $710,000 for 23violations that inspectors said occurred on the Discoverer andits support fleet and $390,000 for 11 violations on the Kulluk.
Shell spokesman Curtis Smith said the brief 2012 season hadtaught the company lessons about controlling air pollution.
And while Shell will pay fines for excessive hourly airpollution, the drilling operations produced only a tiny fractionof the total air pollution Shell would have been allowed to emitduring a full year, according to the settlement agreement.
"Despite reported overages in 2012, the EPA did not allegeany negative impact from Shell's emissions to localpopulations," Smith said in an email.
Shell has spent about $5 billion on its Alaska offshoreprogram, including $2.1 billion in a 2008 Chukchi lease sale.
