Obama Administration Cuts Shell's Arctic Drilling in Half

Shell may be drilling the Chukchi Sea off the coast of Alaska this summer but they will only be able to do half of the drilling they had planned. On Tuesday June 30, the Obama administration announced that it has limited shell’s drilling plans in the Arctic citing wildlife protections. The federal government has effectively prevented them from simultaneously boring two wells.

The US Fish and Wildlife Service indicated that they want to reduce the noise from the drilling and they are using a 2013 regulation that prohibits drilling less than 15 miles between wells. Shell’s plan was to bore two holes 9 miles apart.

Federal regulations demand that Shell have two rigs in the region in case an emergency forces the company to bore a relief well. However, they had planned to put the second rig to work simultaneously drilling a second exploratory well nearby.

This means that while Shell has moved two drilling rigs into the Burger prospect, only one exploratory well can be drilled at a time. Shell will spend $1 billion on the exploratory drilling in the Burger prospect this year bringing their total spend on drilling in the Arctic Ocean to more than $7 billion.

While this will reduce the amount of drilling that will take place in Chukchi Sea this summer, it will likely lengthen the amount of time Shell will be in the Arctic by a number of years. Shell’s two rigs Transocean Polar Pioneer and the Noble Discoverer have a very limited drilling window that runs during the ice-out period between July 15th and September 28th.

Before it can begin drilling in the Arctic Shell still needs one more drilling permit from the Interior Department’s Bureau of Safety and Environmental Enforcement.

The last time Shell tried to drill in the Arctic it did not go well. They lost control of their rig and it ran aground. It was later revealed that they had inadequate safety equipment.