Obama Administration Allows Shell to Drill in Arctic

The Obama administration recently gave conditional approval to allow Shell Gulf of Mexico Inc. to start drilling for oil and gas in the Arctic Ocean this summer. 

©iStockphoto.com/Brad Martin

It is a major victory for both Shell and the petroleum industry, which has looked for years to drill in the Beaufort and Chukchi seas. They are considered to hold vast reserves of oil and gas. In the event it obtains the remaining permits, Shell would be the only company drilling in the federal waters in the Arctic.

The decision from Department of the Interior is a blow to environmentalists, who have pressed the Obama administration to reject proposals for offshore Arctic drilling. They say that a drilling incident in Arctic waters could have far more devastating consequences than the deadly Deepwater Horizon spill in 2010, when an explosion killed 11 and sent millions of barrels of oil  into the water.

The move came just 4 months after the Obama administration opened a portion of the Atlantic coast to new offshore drilling. Department of the Interior's approval of the drilling was conditional on receiving approval of a series of remaining drilling permits for the project.

The administration had initially granted Shell a permit to begin offshore Arctic drilling in 2012. However, the company encountered numerous safety and operational problems as two of its oil rigs ran aground and had to be towed to safety. In 2013, the department said the company could not resume drilling until all safety issues were addressed. A review by the department concluded that Shell had failed in a wide range of basic operational tasks, like supervision of contractors that performed critical work. The report was harshly critical of Shell management, acknowledging that it was unprepared for the problems it encountered operating in the Arctic. Find additional information on the timeline related to Shell's plan on the Bureau of Ocean Energy Management website.