Shell’s Alaska Drilling Delayed by Bureaucracy, Republicans Say

Royal Dutch Shell Plc (RDSA)’s drilling on U.S. leases off Alaska’s north coast is being delayed by federal bureaucrats, House Republicans said today in pushing to speed development by citing success on private lands in North Dakota.

North Dakota and its Bakken shale formation overtook Alaska as the second-largest oil-producing state in March, according to the Energy Information Administration. Alaska is seeking new oil sources as output from the nation’s largest field, Prudhoe Bay, declines and the flow through the Trans-Alaska pipeline drops.

“Despite vast untapped reserves elsewhere in the state as well as offshore, new exploration and drilling there has been greatly curtailed by decisions made in Washington,” Representative Ed Whitfield, a Kentucky Republican and chairman of an Energy and Commerce Committee panel, said today during a hearing in Washington. “North Dakota gives us a glimpse of what would be possible in many other parts of the country if only the Feds took the handcuffs off.”

U.S. oil imports during President Barack Obama’s term have dropped to the lowest level since 1999 and natural-gas output climbed to a record, according to the Energy Information Administration. Republicans said most of this oil and gas is being developed on private lands exempt from federal oversight.

‘Safe, Responsible’

“We are pursuing the safe, responsible and efficient development of energy resources here at home,” Michael D. Nedd, assistant director of minerals and realty management at the Bureau of Land Management, said at the hearing. “The administration has taken a number of steps to accelerate safe and responsible oil and gas development and production on public lands, as part of the president’s ‘all-of-the-above’ energy strategy.”

Kathleen Sgamma, vice president of government and public affairs at Denver-based trade group Western Energy Alliance, and Alaska Natural Resources Commissioner Dan Sullivan disagreed with the administration assessment.

“The most dramatic example of federal regulatory delay in Alaska involves Shell Oil Company’s attempts to explore for oil in the federal waters off the coast of Alaska,” Sullivan said. “Shell has yet to drill one exploration well” after spending almost $5 billion and five years in planning, he said.

Shell’s work has been slowed by opposition from environmental groups and native Alaskans, Coast Guard inspection of a barge to be used in the exploration and thick ice. Shell, Europe’s biggest oil company, is seeking to tap fields in the Beaufort and Chukchi seas that are estimated to hold more than 20 billion barrels of oil.

To contact the reporters on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net;

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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