No Finger Pointing After Shell’s Arctic Drilling Delay, Supporter Says

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September 17, 2012

WASHINGTON–A months-long saga wrapped up Monday as Royal Dutch Shell PLC (RDSA.LN, RDSA) said it would not be able to drill for oil in the Arctic Ocean this summer, citing damage to an oil-spill-containment system that delayed drilling operations.

But while previous delays had been blamed on the Obama administration, and on the Environmental Protection Agency in particular, some of Shell’s supporters said Monday that the company this time around is simply the victim of uncontrollable circumstances.

“We’re not blaming the administration,” said Robert Dillon, spokesman for Sen. Lisa Murkowski (R., Alaska), Shell’s most vocal supporter on Capitol Hill. “Certainly there were delays in the past…but what we’ve got right now is an issue of the clock. Nobody’s pointing a finger here.”

Shell has been trying to drill in the Arctic for several years, spending $4.5 billion to acquire leases in the region and to prepare drilling equipment capable of operating in icy waters.

In order to get approval for its drilling plans, Shell agreed to halt operations in the Chukchi Sea in September and to stop operations in the nearby Beaufort Sea in October. The purpose of the deadlines, imposed by the Interior Department, was to give the company enough time to respond to any potential oil spills before winter ice moved in.

For the past several weeks, Shell had been working to upgrade an oil-spill-containment system known as the Arctic Challenger and prepare it for transport to the Arctic.

On Monday, Shell said the Arctic Challenger had been damaged during a test and that repairs would not be done in time to meet the drilling deadlines. Shell said it would instead focus on preparing the wells for drilling in 2013, conducting prep work with what are known as “top holes.”

“We look forward to the final receipt of our drilling permits for the multiyear exploration program upon the successful testing and deployment of the Arctic Containment System,” Shell said in a statement.

Earlier delays, by contrast, had been blamed on the Obama administration. Supporters of the company were especially critical of the length of time required to secure clean-air permits from the EPA.

By Tennille Tracy. (c) 2012 Dow Jones & Company, Inc.

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