Obama Seeks Oil Demand, Climate Balance With Shell Arctic Permit

U.S. President Barack Obama is balancing the need to meet oil demand and concerns about climate change as his government considers final approvals for Royal Dutch Shell Plc’s Arctic drilling plans, according to a state department official.

“If you go up to Alaska and speak to many Alaskans, as I have, they feel like the President is shutting down the Arctic,” Robert J. Papp Jr., U.S. Department of State special representative for the Arctic, told a conference call Monday. “When you talk to the environmental groups, they feel the president is opening up the Arctic.”

The Interior Department last week endorsed Shell’s plan to have two rigs drill as many as six exploratory wells in the Chukchi Sea off the coast of Alaska. Shell, which has already committed $6 billion to the Arctic project, wants to resume work halted in 2012 when its main drilling rig ran aground and was lost. It also was fined for air pollution violations.

Green groups oppose drilling plans and have criticized the government’s approvals. Greenpeace and Oil Change International plan to protest at Shell’s annual shareholder meeting at The Hague on Tuesday, according to their e-mailed statements.

The company will require more approvals before it can start drilling. Another Interior Department bureau focused on safety will review Shell’s plans, Papp said. The Anglo-Dutch company will also require approvals from the state of Alaska, he said.

Shell is seeking to unlock Arctic resources about 10 times the level of oil and gas produced so far from the North Sea, according to the company’s website. Russia is also chasing Artic oil, though drilling by the nation has been slowed by sanctions.

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