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Shell Is to Blame for Delay in Arctic Wells, Salazar Says

Energy Week Ahead: Salazar Contra Almodovar Over Arctic Shell
Pack ice floats in the Chukchi Sea. The Arctic Chukchi and Beaufort seas may carry more than 20 billion barrels of oil. Photo: Jiri Rezac/Greenpeace via Bloomberg

Royal Dutch Shell Plc is chiefly to blame for delays in procuring permits to drill off the north coast of Alaska, U.S. Interior Secretary Ken Salazar said.

Shell, which had planned to start exploration in July, is reworking the barge Arctic Challenger in Bellingham, Washington, to satisfy U.S. Coast Guard requirements. The vessel is a part of the system Shell has designed to collect oil spilled in case of a well blowout in the Arctic.

“They have not been able to get it done,” Salazar said of Shell at a press conference today in Anchorage, Alaska, monitored by telephone. “If they had got it done, they would already be up there today.”

He said a final decision by his department on whether to permit the drilling would come within “several weeks.”

“I’ll hold their feet to the fire in terms of making sure that we are doing everything we can to abide by the standards of regulations we have set,” Salazar said.

The company, aiming to tap an area estimated to have more than 20 billion barrels of oil, has cut the number of wells planned for this year to two from five, saying that ice covered Arctic waters longer than usual, preventing the vessels from moving in sooner.

“We are in strong agreement with the Department of Interior that drilling in hydrocarbon zones will not begin until the Arctic Containment System is positioned,” said Kelly op de Weegh, a Shell spokeswoman.

Shell’s containment system will be the first of its kind, and there is no timetable for completion, she said.

“Progress related to the final construction of the Arctic Challenger containment barge remains steady,” she said. “We continue to work closely with the U.S. Coast Guard.”

The company is moving other equipment to the area and looks forward to “making the most of the time that remains in the 2012 open-water season,” she said. The company has to quit drilling by the end of October, when ice usually settles in.

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