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UPDATE 2-U.S. gives Shell final nod to drill for oil in Arctic

Mon, 17th Aug 2015 21:38

(Adds background, comment from environmentalist)

By Timothy Gardner

WASHINGTON, Aug 17 (Reuters) - The Obama administrationgranted Royal Dutch Shell final clearance on Monday toresume drilling for oil and gas in the environmentally fragileArctic Ocean for the first time since 2012, a move green groupsvowed to fight.

The U.S. Department of the Interior permit allows Shell todrill in the oil-rich Chukchi Sea off the northwest coast ofAlaska. Shell interrupted its drilling program in the region in2012 after suffering a series of mishaps, including losingcontrol of an enormous rig, from which the Coast Guard had torescue 18 workers.

Harsh conditions in the Chukchi have discouraged other oilcompanies from drilling there.

The go-ahead for Shell comes after repairs were completed tothe Fennica, an icebreaker the company leases that carriesemergency well-plugging equipment. The ship had suffered a gashin its hull after hitting uncharted shoals off southern Alaska.

Damage to the Fennica had stalled Shell's program, which theInterior Department had previously issued a permit for.

Shell obtained the leases in the Chukchi during theadministration of former President George W. Bush. Since then ithas spent about $7 billion on exploration in the Arctic, thoughoil production is at least a decade away.

The Arctic is home to what the U.S. government estimates is 20 percent of the world's undiscovered oil and gas.

Shell's determination to drill there has spawned waves ofprotests and funding drives by environmentalists who want toprotect whales, walruses and polar bears in a vulnerable regionthat scientists say is changing rapidly due to global warming.

Late last month, 13 Greenpeace activists hanging from abridge in Oregon temporarily blocked the freshly repairedFennica from reaching the Pacific Ocean to return to Alaska.

President Barack Obama "must change the course on Arcticdrilling set eight years ago by former President George W. Bushand not perpetuate it," said Michael Brune, head of the SierraClub, the country's oldest environmental group.

The club urged Obama to cancel sales of oil-zone leasesscheduled for 2016 and 2017 and to remove the possibility ofdrilling in the Arctic Ocean.

Later this month, Obama will visit Alaska to speak at aconference on the Arctic and tour areas threatened by climatechange.

Curtis Smith, a Shell spokesman, said the company "looksforward to evaluating what could potentially become a nationalenergy resource base."

Shell is not releasing a timetable for its drilling program. (Reporting by Timothy Gardner; editing by Sandra Maler; andPeter Galloway)

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