Shell's Arctic return faces hurdle at Seattle port

Reuters News
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Posted: May 04, 2015 4:54 PM

By Timothy Gardner

(Reuters) - Royal Dutch Shell's quest to return to Arctic drilling for the first time in three years could face delays after Seattle ruled that the city's port must apply for a permit for the company to use it as a hub for drilling rigs.

Seattle Mayor Ed Murray, a Democrat who has fought against new projects by coal and oil companies, applauded the requirement by the city's planning department.

"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," Seattle's Mayor Ed Murray said on his website.

The Puget Sound region has a decades-long history as a hub for equipment used in energy drilling in Alaska.

But some environmental groups and politicians have pushed for the region's economy to move beyond oil, gas and coal and into clean energy.

It is time to focus the economy on electric cars and transit and "environmentally progressive businesses," Murray said.

Shell is hoping to return to Arctic oil and gas exploration for the first time since 2012, although the U.S. Interior Department has not issued its full blessing yet. During Shell's accident prone drilling season that year, the Coast Guard had to evacuate crew from an enormous oil rig that eventually grounded and wound up being scrapped.

Shell has been planning to base a drilling rig and tug boats in Seattle before heading up to Arctic waters off Alaska.

While the port is expected to eventually get the permit, a spokesman for Mayor Murray said the process was likely to take weeks.

While the price of oil has fallen over the last year, the Arctic is coveted by energy companies for its long term potential. The Arctic is estimated to contain about 20 percent of the world's undiscovered oil with some 34 million barrels of oil in U.S. waters alone.

A Shell spokesman said the company was still reviewing the Seattle planning department's move on permit requirements.

(Reporting by Timothy Gardner; Additional reporting by Victoria Cavaliere; Editing by Marguerita Choy and Cynthia Osterman)