(New throughout, adds background and comments fromenvironmentalist)
By Timothy Gardner
WASHINGTON, June 30 (Reuters) - The Obama administrationdealt a setback to Royal Dutch Shell's Arctic oilexploration plans on Tuesday, saying established walrus andpolar bear protections prevent the company from drilling withtwo rigs simultaneously at close range, as it had planned.
The U.S. Fish and Wildlife Service issued Shell a permitwhich emphasized that under 2013 federal wildlife protections,companies must maintain a 15-mile (24-km) buffer between tworigs drilling simultaneously.
The rule is meant to protect populations of animalssensitive to sounds and activities of drilling. Walruses havebeen known to plunge off rocks into the sea during drilling,putting some at risk. The animals are already at risk fromreduced habitat due to global warming.
Drilling with only one rig at a time would slow Shell'sdrilling progress, but by how much was unclear. Shell, which hasinvested about $7 billion in its Arctic exploration over severalyears, is evaluating the permit and "will continue to pursue"its drilling plan, spokesman Curtis Smith said. The companyhopes to begin producing oil there in 10 or 15 years.
"Our goal is to safely accomplish as much work as we canbefore the end of open water season." The return of ice in lateSeptember ends the drilling season.
In Shell's 2015 Arctic drilling plan, no two of its wellsare more than 15 miles apart. Two of the wells it had beenplanning to drill in the Chukchi Sea off Alaska are about ninemiles (14 km) apart.
The move by the federal government came the same day thatShell began to send the Noble Discoverer, the second of twodrilling rigs, up to Alaska from the Seattle area, for drillingstarting in late July. Shell was hoping toreturn to Arctic drilling for the first time since itsmishap-plagued 2012 season.
Last week, green groups had said the wildlife rules couldhamper Shell's drilling season. On Tuesday, anenvironmentalist blasted the company's blueprint for the Arcticthat the Interior Department conditionally approved in May,pending permits including Fish and Wildlife's.
"Shell's whole drilling plan is premised on a plan that isunlawful from the start," said Erik Grafe, a lawyer atEarthjustice in Anchorage.
Shell can still drill with one rig at a time this summer, ifit gets a few more permits, the Interior Department said. (Additional reporting by Eric M. Johnson in Seattle,; Editingby Andrew Hay and David Gregorio)
