Senate Panel Holds Alaska Offshore Drilling Hearing

Senate Panel Holds Alaska Offshore Drilling Hearing

The U.S. Senate Commerce Committee held a hearing on Oct. 11 in Anchorage, Alaska to examine the lessons learned by petroleum giant Royal Dutch Shell Alaska while drilling in the Arctic.

The audience of more than 100 people also heard specifics on what happened to a Shell oil spill response system damaged during testing.

With only weeks to go before Shell Alaska wraps up its first exploratory drilling offshore Alaska in two decades, key players told the Senate Committee on Commerce, Science and Transportation that the work went well and Shell had done an exemplary job, despite some glitches and setbacks.

"It's no longer a question of if the Arctic will be developed. It's how it will be developed," U.S. Sen. Mark Begich (D-Alaska) said in opening the hearing, which he chaired.

Pete Slaiby, Shell's vice president for Alaska, told Begich that Shell believes Alaska's offshore Arctic region "likely holds world class volumes of oil and gas."

If Shell's exploratory work gets to production, tens of thousands of jobs will be created and vast quantities of additional oil will move down the Trans-Alaska Pipeline.

Shell was not able to attempt to reach oil-bearing zones this year because of complications with its oil spill containment barge, the Arctic Challenger.

David Hayes, deputy secretary of the Interior Department, told Begich that scientific research must be more closely linked to decisions by government regulators. To that end, the Arctic Research Commission and its chair, former Alaska Lt. Gov. Fran Ulmer, are working to develop a database of scientific information and traditional knowledge that relates to management of resources in the Arctic.

Slaiby said that an effort by the Obama administration to better coordinate permits and regulatory hoops through a high-level group headed by Hayes made all the difference, but he raised the question of whether it can be sustained.

And Alaska Native leaders told Begich that offshore development brings great risk and change -- and that their communities should see more benefit.

Edith Vorderstrasse, a manager with a subsidiary of the Ukpeagvik Inupiat Corp., said the federal government should create a revolving loan fund for local communities impacted by offshore development. Already Wainwright and Barrow are being strained by demands on housing, electrical generation, and water and sewer services related to Shell's exploration, she said.

Shell executives at first seemed to be going through the motions of learning about local needs but gradually came to deep understanding, Vorderstrasse said. Other oil companies, she said, need to do the same.

Posted on Tuesday, October 16, 2012 (Archive on Monday, January 1, 0001)
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