United States : US Interior Dept OKs Shell s Alaska Beaufort Sea Drilling Plan.

Byline: manish03

The U.S. Interior Department said Monday it has approved a plan by Royal Dutch Shell PLC (RDSB, RDSB.LN) to drill for oil and natural gas off Alaska's coast in the Beaufort Sea.

Shell unit Shell Offshore Inc. bought two offshore oil and gas leases during federal lease sales in 2005 and 2007. Those leases are not included in the five-year oil and gas leasing plan that the Interior Department is reviewing for possible revision under a court order.

Shell has proposed drilling two exploration wells during the July-October 2010 drilling season, according to the Interior Department's Minerals Management Service.

The company plans to stop all operations at the sites on Aug. 25, 2010, to avoid harming native villagers' subsistence hunting of bowhead whales, which are said to be sensitive to loud noises. After the whale hunts are over, Shell can resume drilling operations through Oct. 31, 2010, depending on ice and weather, the MMS said.

Shell still needs to apply for and receive a drilling permit from the MMS to begin drilling at the sites, near Point Thompson, Alaska, the MMS said.

The company also needs air-quality permits, for which it has applied, from the federal Environmental Protection Agency.

"The Minerals Management Service is committed to responsibly developing offshore energy resources," MMS Director Liz Birnbaum said in a statement. "We will continue to work with Shell to ensure that all activities are conducted in a safe and environmentally responsible manner."

Representatives at Shell could not immediately be reached for comment.

Environmental groups criticized the agency's approval of Shell's drilling plan, saying an oil spill could hurt wildlife and people who depend on hunting and fishing in the Beaufort Sea for their livelihood.

"A blow-out like the one that recently despoiled waters off the coast of Australia would leave oil in the waters off the coast of the Arctic National Wildlife Refuge for decades, killing whales, seals, fish and birds and turning irreplaceable spawning and feeding grounds into an ecological wasteland," said Chuck Clusen, director of national parks and Alaska projects at the Natural Resources Defense Council.

In April, a federal appeals court threw out federal leases off Alaska's coasts and ordered the Interior Department to redo its environmental review of environmentally sensitive areas in the Beaufort, Bering and Chukchi seas, for leases issued under its 2007-12 five-year oil and gas leasing plan. In a subsequent ruling, the U.S. Court of Appeals for the District of Columbia Circuit ordered the agency to report back to the court every 60 days with progress reports on its review of the Alaska lease sales.

Based on government estimates, Alaska has some of the largest undiscovered oil and gas resources in the nation. The Alaska seas also are considered some of the most ecologically sensitive areas of the world, home to polar bears, whales, seals and walruses.

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