Royal Dutch Shell PLC yesterday began the first new oil drilling in U.S. Arctic waters in more than two decades, a major step for the company after several years of planning and numerous legal and regulatory setbacks.

The Hague-based company yesterday at 4:30 a.m. Alaska time spud the first of what it hopes will be many wells at its Burger prospect about 70 miles from the Chukchi Sea coast. The region is estimated to contain roughly 26 billion barrels of oil, the largest untapped formation in the country.

A video posted to YouTube yesterday features several Shell crew members aboard the Noble Discoverer and follows the drill bit as it is lowered into the cold water. The words "Shell Burger 'A' Sept. 8 2012" are scrawled in yellow on the side of the whirring device.

"The occasion is historic in that it's the first time a drill bit has touched the seafloor in the U.S. Chukchi Sea in more than two decades," said Shell spokesman Curtis Smith. "We look forward to continued drilling progress throughout the next several weeks and to adding another chapter to Alaska's esteemed oil and gas history."

While this is a significant step in the company's $4.5 billion bid to explore the oil-rich region, it is unclear whether Shell will be allowed to drill into oil-bearing formations in the Chukchi this summer.

The Interior Department late last month said the company could conduct only preparatory drilling activities until it receives U.S. Coast Guard certification of its Arctic Challenger, an oil spill response barge currently undergoing inspections in Bellingham, Wash. Until then, the company is allowed to drill roughly 1,400 feet below the seabed -- nearly a mile short of oil-bearing rocks -- and build a shallow pit to install a blowout preventer.

When, and if, the Challenger is certified, it will take about two weeks for it to reach its staging location between the company's Chukchi and Beaufort drill sites. In the Chukchi, Shell must cease drilling into oil-bearing rock by Sept. 24, making it virtually impossible for oil drilling to begin.

Shell has requested an extension to its drilling window, citing forecasts that suggest the area will be clear of ice longer than expected. Interior Secretary Ken Salazar in late August said it is premature to consider Shell's request until the Challenger is certified.

"If, and when, Shell is able to meet these conditions, which have been in place for many months, [the Bureau of Safety and Environmental Enforcement] will then be in a position to issue a final permit for Shell to drill into oil-bearing formations," Salazar said in a conference call with reporters. "What I do know for sure, and what we have said from the beginning, is that any approved activities that occur in the Beaufort or Chukchi seas will be held to the highest safety, environmental protection and emergency response standards. That is a non-negotiable item."

BSEE Director James Watson called the approved drilling activities "extremely low risk." He said Shell will first bore a small hole to allow a logging device to sense for gas pockets and enhance existing seismic data of the formation. A video posted to Shell's website describes what happens in "top hole" drilling.

"Based on very extensive information reviewed by BSEE engineers, we have confidence in that conclusion that there is no oil," Watson said.

In the Beaufort, Shell is awaiting the conclusion of the fall whale hunt, as required in its approved exploration plan (Greenwire, Aug. 22). It is allowed to drill into oil-bearing zones there until Oct. 31.

Environmental groups for years have opposed Arctic drilling, particularly following the Deepwater Horizon spill in the Gulf of Mexico, arguing a mishap in the Arctic would be impossible to clean up.

Dan Howells, deputy campaigns director for Greenpeace, said Shell has ignored the advice of scientists and millions around the world who oppose Arctic drilling.

"Whatever Shell is able to do in the narrow window between now and when the sea ice returns, it won't erase the clear evidence we've seen in the past two months that there's no such thing as safe drilling in the Arctic," he said, referencing requests by Shell to modify its air permits and extend its drilling window as well as an incident earlier this summer in which its drillship drifted dangerously close to the Alaska shore.

"The company's Arctic drilling program this summer has not only been an epic PR failure, but a dangerous logistical failure as well," he said. "They've only proven one thing this summer: that oil companies are simply not equipped to deal with the unique challenges of operating in the Arctic."

Shell officials insist their drilling operations are the safest in the world and contain multiple redundant safeguards to prevent and respond to a spill. In addition, drilling will occur in much shallower waters and under lower pressures than those experienced in the deepwater Gulf.