Saturday, December 16, 2017

Eni receives federal permit for US Arctic offshore drilling

ANCHORAGE, Alaska (AP) — A subsidiary of an Italian energy company has received a federal permit to drill the first oil exploration wells in U.S. Arctic waters in two years.

The federal Bureau of Safety and Environmental Enforcement announced Tuesday it has approved an application from Eni U.S. Operating Co. Inc. to drill exploratory wells in the Beaufort Sea.

Drilling could begin next month from Spy Island, a gravel artificial island in state waters about 3 miles (4.8 kilometers) off the coast near Prudhoe Bay. Eni will use extended-reach drilling techniques to reach federal submerged lands.

The drilling would be the first in federal Arctic waters since Royal Dutch Shell in 2015 sent down an exploratory well in the Chukchi Sea off Alaska's northwest coast.

Former President Barack Obama last year banned oil and gas exploration in most of the Arctic Ocean. President Donald Trump in April ordered Interior Secretary Ryan Zinke to review the ban with the goal of opening offshore areas. Environmental and Alaska Native groups in May sued to maintain the ban.

Environmental groups strongly opposed Arctic Ocean drilling. In a statement, Kristen Monsell, an attorney for the Center for Biological Diversity, said drilling threatens coastal Arctic wildlife.

"The Trump administration is risking a major oil spill by letting this foreign corporation drill in the unforgiving waters off Alaska," she said. "Offshore drilling threatens coastal communities and wildlife and will only push us deeper into the climate crisis."

Mark Fesmire, BSEE's Alaska region director, said in the announcement that agency staff conducted a thorough review of Eni's well design, testing procedures and safety protocol.

Eni already has production wells on the 11-acre (.04-square kilometer) Spy Island built in state waters 6 to 8 feet (1.8 to 2.4 meters) deep. It's one of four artificial islands in the Beaufort Sea that support oil production.

A subsidiary of Houston-based Hilcorp has proposed a fifth island in federal waters as part of its Liberty Project, a facility that could hold production wells, a processing facility and the start of an undersea pipeline carrying oil to shore and connections to the trans-Alaska pipeline.

Eni plans four exploration wells. Exploratory well operations will add at least 100 jobs, the company said. Production could lead to as many as 150 jobs in the region and 20,000 barrels of oil per day, according to the company.

The permit was issued as Congress considers opening additional onshore Arctic drilling within an Alaska wildlife refuge. Congressional Republicans are pushing for lease sales on the coastal plain of the Arctic National Wildlife Refuge to help pay for President Donald Trump's proposed tax cut.

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