Shell EPA Permits for Alaska Drilling Challenged in Court

Royal Dutch Shell Plc (RDSA)’s air pollution permits for offshore oil drilling in Alaska were challenged by environmental groups who said the permits violate the U.S. Clean Air Act.

The Alaska Wilderness League and eight other organizations filed a petition with the U.S. Court of Appeals in San Francisco on Feb. 17, asking it to review two permits the U.S. Environmental Protection Agency granted Shell to operate its Discoverer drillship in the Sea of Beaufort and the Sea of Chukchi.

“As early as this summer, the Discoverer drillship and other vessels in Shell’s fleet could be in the Chukchi Sea or Beaufort Sea of the Arctic Ocean where they will pump tens of thousands of tons of pollution into pristine Arctic skies,” the groups said in a statement today.

The organizations allege that the EPA approved the permits without ensuring that all air quality standards were met, including not requiring that Shell install all the pollution controls that it should have, according to the statement.

The EPA permits were issued Feb. 10 to U.S. subsidiaries of The Hague-based Shell, according to the petition.

“Shell and EPA have worked to assemble strong, environmentally responsible air permits,” Shell spokeswoman Kelly op de Weegh said in an e-mailed statement. “Specifically, we have committed to retro-fit our catalytic exhaust systems and use ultra-low sulfur fuel on all of our vessels.”

Drilling Permits

The company will continue to work with regulators to get all the permits it needs to start drilling this summer, op de Weegh said.

Shell on Feb. 17 received U.S. approval for its oil-spill response plan in the Chukchi Sea, bringing it closer to winding up a five-year quest to drill off the north coast of Alaska.

Shell must obtain drilling permits from the Interior Department’s Bureau of Safety and Environmental Enforcement to start work as early as July. The company also needs U.S. Fish & Wildlife Service and National Marine Fisheries Service permission for “incidental” disruption of polar bears, walrus, whales and seals.

Shell, which has spent about $4 billion on leases, seismic studies and research of Arctic mammals since acquiring access to the Beaufort Sea in 2005, is seeking to drill as many as five wells this year in a region with an estimated 26.6 billion barrels of oil. The exploration plans for both Chukchi and Beaufort seas were approved last year.

An EPA spokesman in Washington didn’t immediately return calls for comment.

The case is Redoil v. EPA, 12-70518, U.S. Court of Appeals for Ninth Circuit (San Francisco.)

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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