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BOEM: Conditional Approval for Shell’s Chukchi Sea Exploration Plan (USA)

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The Bureau of Ocean Energy Management (BOEM) on Friday, October 16, issued conditional approval of Shell Gulf of Mexico, Inc.’s revised Exploration Plan under leases in the Chukchi Sea Planning Area. In its Exploration Plan, Shell proposes drilling up to six exploration wells in Alaska’s Chukchi Sea beginning in the 2012 drilling season.

This decision follows the bureau’s completion of a site-specific Environmental Assessment that examined the potential environmental effects of the plan. The conditions of approval require Shell to comply with a range of important safety and environmental protection measures.

BOEM’s conditional approval does not authorize Shell to commence exploratory drilling in the Chukchi Sea. Shell must satisfy the conditions of BOEM’s approval, as well as obtain approvals from the Bureau of Safety and Environmental Enforcement (BSEE) regarding its Oil Spill Response Plan and well-specific applications for permit to drill.

“Our scientists and subject matter experts have carefully scrutinized Shell’s proposed activities,” said BOEM Director Tommy P. Beaudreau. “We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed on its Exploration Plan and all other applicable safety, environmental protection and emergency response standards.”

Shell acquired its leases in the Chukchi Sea in 2008 under Lease Sale 193, which BOEM recently reaffirmed after completing a Supplemental Environmental Impact Statement. All of these leases are subject to a series of stipulated requirements to mitigate operational and environmental risks, and the conditions for approval of Shell’s Exploration Plan build on and expand those requirements.

Among the conditions of approval is a measure designed to mitigate the risk of an end-of-season oil spill by requiring Shell to leave sufficient time to implement cap and containment operations as well as significant clean-up before the onset of sea ice, in the event of a loss of well control. Given current technology and weather forecasting capabilities, Shell must cease drilling into zones capable of flowing liquid hydrocarbons 38 days before the first-date of ice encroachment over the drill site. Based on a 5-year analysis of historic weather patterns, BOEM anticipates November 1 as the earliest anticipated date of ice encroachment. The 38-day period would also provide a window for the drilling of a relief well, should one be required.

Shell must also obtain necessary permits from other agencies — the Environmental Protection Agency, the U.S. Fish & Wildlife Service, and the National Marine Fisheries Service.

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