President Obama has given Royal Dutch Shell PLC a huge boost, recently removing one of the few remaining obstacles to Arctic oil drilling, giving the multi-national company permission to drill two new exploratory wells.
The Interior Department did place some restrictions on the drilling. The granted permit bans Shell from drilling until critical spill-response equipment is on site. Unfortunately for Shell, that equipment is on an ice-breaker that is headed toward Oregon in need of repairs.
The company has spent $7 billion over the last seven years hoping to open up Arctic drilling, and the regulation may set them back another season. The Arctic season closes down in September, which would push any drilling to next year.
“Without the required well control system in place, Shell will not be allowed to drill into oil-bearing zones,” Brian Salerno, director of the department’s Bureau of Safety and Environmental Enforcement.
Salerno’s statement also noted that Shell would only be able to drill one hole at a time and would not be allowed to drill into deep oil-bearing formations until the safety equipment arrives. In addition to the safety requirement, the Fish and Wildlife Service also requires Shell to stay 15 miles away from protected wildlife.
Even with the regulations a lot of people are still skeptical of the drilling plan. One such critic, former Vice President and noted environmentalist Al Gore calls the plan “insane” citing scientific studies that warn most of the oil needs to remain in place to avoid disastrous climate changes.
The potential earnings from Arctic drilling may be too high to ignore, the untapped reserves contain at least 20 percent of the remaining reachable oil in the Earth. Shell was able to drill once in 2012, but it was a disaster that led to the Kulluk rig running aground.
Since then Obama has increased regulations however, some critics still believe Arctic drilling is a disastrous plan.
“By opening up the Arctic to oil drilling, President Obama is courting disaster and undermining his legacy on climate change. The world cannot afford to burn Arctic oil, and the consequences of a spill would be enormous. It it not too late for President Obama to finally come to terms with the disaster in the Arctic that could happen on his watch,” Cassady Sharp, a campaigner for Greenpeace said.
If Shell misses this season, it is possible activists may still be able to stop drilling.