Shell has spent more than $3.5 billion on leases and other expenses tied to drilling in the Chukchi and Beaufort seas off Alaska's northwest and north coast, hoping to tap into OCS reserves estimated at 26.6 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas.
Drilling this year was held up in part by a successful appeal of two air permits EPA issued to Shell in 2010.
Alaska Native and conservation groups challenged the permits in an appeal filed with the EPA's independent Environmental Appeals Board, which overturned them in December.
The revised draft permits have reduced emissions of key air pollutants by more than 50 percent from the levels allowed in the 2010 permits, the EPA said in its announcement. The reductions are largely due to a new nitrogen dioxide standard that went into effect after permits were issued last year, the agency said.
The air permits cover Shell's drill ship and a support fleet of oil spill response and supply vessels. The EPA said Shell's proposed operations would emit more than 250 tons of air pollutants a year. The permits would set limits on air pollution from the vessels.
Shell's current exploration plan calls for drilling up to three exploratory wells in the Chukchi Sea and two in the Beaufort Sea in 2012 and the same number in 2013.
The EPA says Shell's proposed operations would emit more than 250 tons of air pollutants a year. The permits would set limits on air pollution from the vessels.
The agency will take testimony on the draft permits for 30 says starting July 6.
Shell faces other hurdles before drilling can begin. Alaska Native groups contend a spill and the side effects of exploration, including noise, will hurt their ability to harvest subsistence fish and wildlife resources such as whales.
Environmental groups say major industrial activity should not be allowed in the Arctic, the home to threatened species such as polar bears that are already being hit hard by climate warming. They have challenged the legitimacy of the 2008 Chukchi sale in court, claiming the former federal Minerals Management Service failed to conduct adequate environmental studies.
Interior Secretary Ken Salazar suspended Arctic offshore drilling operations after the Deepwater Horizon blowout last year in the Gulf of Mexico and said the federal government will proceed with "utmost caution."
Shell Oil President Marvin Odum said last week the company's system set up for 2011 drilling, including spill response vessels and on-site equipment to cap a blowout, made the company absolutely prepared for drilling.
He said drilling off Alaska's shore should not be compared to deep water conditions in the gulf because of differences in drilling depth, water depth and pressure in the wells.
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