Shell takes a step closer to resuming $6-bn Arctic crude quest

Shell took a step towards resuming its $6-billion search for crude in the Arctic yesterday, with the Obama administration backing the company's plans for exploratory oil drilling in the Chukchi Sea.

Shell Oil will still need to secure seven additional permits, settle a dispute over its plan to moor rigs near Seattle and have weather on its side before it can start drilling operations once ice cleared this summer.

However, the interior department's conditional approval of Shell's broad Chukchi Sea exploration plan marked a major milestone for the company, much to the chagrin of  environmentalists who point out that an oil spill in those waters would damage the fragile Arctic ecosystem irrevocably, jeopardising whales, walruses and other marine life.

According to commentators the decision again showed how the White House has to perform a delicate balancing act between energy and the environment, through a host of measures, clamping down on oil and gas development even as it backed oil exploration in frontier areas.

According to Shell spokesman Curtis Smith, the government approval ''signals the confidence regulators have in our plan.''

Under the plan Shell would drill up to six wells around 70 miles northwest of Wainwright, Alaska.

Meanwhile, a giant floating oil rig currently anchored off Port Angeles, Washington, would be towed to Seattle this week even as the Seattle mayor's asserts that the Port of Seattle could not host the rig until it got a new land-use permit, a Royal Dutch Shell spokesman said Monday.

In an email, Smith said the 400-foot-long Polar Pioneer would arrive at the Port of Seattle's Terminal 5 "later in the week" to prepare for planned exploration in the Arctic Ocean.

The arrival of the rig could trigger protests from activists in kayaks.

According to Smith, Shell believed its arrangements to use the terminal were valid and disagreed with Seattle's interpretation.

Seattle Mayor Ed Murray has called on the port to reconsider its two-year, $13- million lease with Foss Maritime, which has Shell as its client.

"This is an opportunity for the port and all of us to make a bold statement about how oil companies contribute to climate change, oil spills and other environmental disasters - and reject this short-term lease," Murray said earlier.

According to Murray spokesman Jason Kelly who spoke to the Peninsula Daily News in response to Shell's latest announcement, the mayor expected the Port of Seattle to obtain all required city permits for Terminal 5.