U.S. gives Shell permit to drill for oil in Arctic Ocean off Alaska.
The U.S. government gave Royal Dutch Shell the final go-ahead on Monday to drill for oil in the Arctic Ocean off the northwest coast of Alaska. The Interior Department issued the Anglo-Dutch company a permit allowing it to explore deeper into the ocean floor after granting Shell conditional approval to drill in May. The drilling will be the first exploration in the U.S. region of the Arctic in more than two decades; the area is estimated to hold some 26 billion barrels of recoverable oil which could significantly boost U.S. domestic oil production from its current level of 9.5 million barrels per day. Here’s more on what this means for the company from the Associated Press:The Bureau of Safety and Environmental Enforcement announced that it approved the permit to drill below the ocean floor after the oil giant brought in a required piece of equipment to stop a possible well blowout. The agency previously allowed Shell to begin drilling only the top sections of two wells in the Chukchi Sea because the key equipment, called a capping stack, was stuck on a vessel that needed repair in Portland, Oregon. Because the vessel arrived last week, Shell is free to drill into oil-bearing rock, estimated at 8,000 feet below the ocean floor, for the first time since its last exploratory well was drilled in 1991 … Shell bid $2.1 billion on Chukchi Sea leases in 2008 and has spent upward of $7 billion on exploration there and in the Beaufort Sea off Alaska’s north coast.
“Environmental groups condemned the decision, arguing that it goes against Mr. Obama’s stated commitment to addressing climate change and shifting away from fossil fuels like oil and natural gas toward renewable energy resources,” the Wall Street Journalnotes. Shell will have until late September to drill before weather conditions make it too difficult. The company plans on investing $1 billion on top of the $7 billion it’s already plowed into scouring the Arctic for oil and natural gas, according to the Journal. So far the company has yet to discover any oil or natural gas there.
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