Feb. 26 (Bloomberg) -- Royal Dutch Shell Plc, the biggest winner in an Alaskan lease sale this month, was offered an air- quality permit for a drilling rig in the Arctic's Beaufort Sea.

The U.S. Environmental Protection Agency proposed a so- called ``minor'' permit to regulate air emissions from Shell's Kulluk floating rig off the coast of Alaska, the agency said in a statement late yesterday.

``From an air-quality standpoint, this proposed permit will meet all health-based ambient air quality standards,'' Rick Albright, director of EPA's Air, Waste & Toxics office in Seattle, said in the statement.

Shell originally applied for two ``minor'' air permits for two rigs, EPA said. The permit will limit emissions of any single air pollutant to 245 tons per year for each drill site, the agency said. Without the limit, Shell may have to seek a ``major'' permit, requiring a more rigorous permitting process and technology review, EPA said.

The one-permit approach reflects Shell's plan to use a single rig in the Beaufort Sea this year because of opposition from environmental groups, said spokeswoman Darci Sinclair. Shell has scaled back an original plan to use two rigs to take ``a measured approach'' to offshore oil exploration, John Hofmeister, who heads the company's U.S. unit, said Feb. 19.

In July, environmental groups and Eskimo villages won an injunction against Shell in federal appeals court in San Francisco. Eskimos living along the coastline fear that noise from drilling could disturb migrating bowhead whales, walruses and seals, which they depend on for food. The court is still reviewing the matter.

Hearings

The permit is available for public review and comment through April 1, EPA said in its statement. The agency said it may also hold public hearings in some North Slope communities.

``We agree with that process,'' Shell's Sinclair said in a phone interview. ``We certainly would encourage the communities to participate and to comment and to learn as much as they can about our plans.''

Shell, Europe's largest oil company, on Feb. 6 offered $2.1 billion for oil and gas leases in the Chukchi Sea in Alaska, making it the most successful bidder in the auction. The single- largest bid was also from Shell, which offered $105.3 million on one tract.

To contact the reporter on this story: Sonja Franklin in Calgary at sfranklin6@bloomberg.net

Last Updated: February 26, 2008 15:44 EST