Shell exploration plans in Alaska stoke concern, hope in Canada

Royal Dutch Shell's plans to explore for oil offAlaska's northwestern coast are being closely watched in Canada with
a mixture of hope and concern.

Earlier this week, the energy giant cleared a major hurdle whenthe U.S. Bureau of Ocean Energy Management approved a multi-yearexploration plan in the Chukchi Sea, though it still needs to obtainother federal and state permits.

Shell isn't active in the Canadian Arctic these days, but bothproponents and critics say the U.S. decision has implications forCanada.

"It's a good signal from where we sit," said David Ramsay, theNorthwest Territories minister in charge of resource development.

"The resource in the Beaufort could rival the Gulf of Mexico. Wewant to ensure it's done right and I think that's why folks arewatching this closely."

Ramsay said he was encouraged by the way in which Shell has beenpartnering with indigenous-run businesses in Alaska, and imagines itwould work much the same way in his territory.

'Miscue' could lead to chill

Doug Matthews, an energy consultant who works in the North, saida past effort by Shell to drill in the Arctic does not inspireconfidence. On New Year's Eve 2012, its drilling ship, the Kulluk,ran aground in a severe Alaska storm.

"I would worry that if they had another incident in the Chukchiprogram, that would really inflame public opposition to any Arcticdrilling," said Matthews.

"I'm comfortable with our regulatory regime in the Beaufortthrough the National Energy Board, but I worry that a miscue on thepart of Shell could result in a real Arctic drilling chill for yearsto come. That's what troubles me the most."

Environmental groups are enraged by the U.S. approval and havebeen planning big protests in Seattle, where Shell wants to keep itsdrilling equipment before it heads north.

"This is really, really bad news and it's outrageous that theycan go ahead in spite of massive opposition," Greenpeace spokesmanDiego Creimer said from aboard the Esperanza, one of theenvironmental group's ships that's currently docked in NorthVancouver.

Greenpeace protesters aboard the Esperanza targeted anArctic-bound Shell drilling vessel earlier last month as it made itsway across the Pacific Ocean.

One big concern on the West Coast of Canada and the U.S. is theincreased tanker traffic that could result from exploiting Arcticoil a big factor in the debate over Alberta-to-B.C. crudepipelines like Northern Gateway and the Trans Mountain expansion,said Creimer.

In an emailed statement, Shell said the approval shows regulatorshave confidence in its revised Chukchi Sea exploration plan.

"However, before operations can begin this summer, it'simperative that the remainder of our permits be practical, and
delivered in a timely manner," it said.

"In the meantime, we will continue to test and prepare ourcontractors, assets and contingency plans against the high barstakeholders and regulators expect of an Arctic operator."