A coalition of environmental and Alaska Native groups is making a last-ditch effort to persuade federal regulators to stop Royal Dutch Shell PLC from exploring for oil this summer in Alaska's northern waters.

Shell's opponents concede that they have no legal challenges under way that could generate a last-minute injunction stopping exploration this summer. Instead, the groups are trying to convince the Obama administration that Shell's recent setbacks are evidence that the company isn't prepared to safely drill in the frigid Arctic Ocean.

"We got up to the eleventh hour, and then Shell started backtracking on some of its promises," said Dan Ritzman, northwest and Alaska regional director for the Sierra Club.

"Shell's run a giant PR campaign to convince the world that their drilling project is going to be safest and the best thing ever," he said. "But their own internal gaffes have reopened a can of worms for them."

The Noble Discoverer leaves Seattle on its way to Alaska for Shell's planned oil and gas exploration. Photo courtesy of Shell.

Drilling critics note that during the last month, Shell persuaded the Coast Guard to ease a safety mandate and asked U.S. EPA to scale back air pollution limits for the company's equipment. The company also raised alarms when one of its drillships, the Noble Discoverer, pulled its anchor loose in Alaska's Dutch Harbor and drifted dangerously close to shore.

Now Shell officials say they are scaling back their summer exploration plans due to delays in building the company's emergency spill response barge and continued shore ice in the Beaufort and Chukchi seas (EnergyWire, July 16).

The firm had hoped to sink five wells in Arctic waters beginning in July. But after spending more than $4.5 billion on leases, vessels and special equipment for this summer's Arctic project, Shell is now planning only two wells -- one in each sea.

At the same time, the company will "drill some 'top holes,' meaning we can start additional wells that can be drilled to total depth in 2013," said Shell spokeswoman Kelly op de Weegh. Under the terms of its permit, Shell must stop drilling in the Beaufort Sea by the end of October and in the Chukchi Sea by late September.

But environmental and Alaska Native drilling opponents are trying to persuade the Obama administration not to grant any drilling permits for the 2012 summer season. They are pinning their hopes of stopping Shell on EPA, which is considering a last-minute company request to waive air pollution limits for the Noble Discoverer.

Shell recently asked for a special air pollution compliance agreement after the ship tested slightly above permit levels for ammonia and nitrous oxide. According to company officials, EPA has acknowledged that the emissions standards "may not be achievable" (E&ENews PM, July 20).

EPA must hand down its air permits decision before Interior Secretary Ken Salazar can decide whether to sign off on Shell's final drilling permits. Salazar recently said that ruling will be released by mid-August.

Seven-year war

Shell and the environmental groups have been fighting over offshore Arctic drilling since 2005, when the company paid $44 million for leases in the Beaufort Sea. Three years later, Shell dramatically upped the ante in Alaska when it paid a whopping $2.2 billion for 275 leases in the Chukchi Sea.

Since Shell won those leases, opponents have challenged nearly every page of the company's application to drill, requesting multiple court hearings, drill plan revisions and delays.

They have peppered regulators with petitions and lawsuits aimed at stopping exploration or at least slowing it down while scientists gathered more data on the impacts of oil development in the region. They say Shell has not proved that it could clean up an oil spill in Alaska's unforgiving Arctic conditions.

In 2007, a coalition of environmental and Native groups won a court order halting Shell's drilling plan in the Beaufort Sea. They charged that the Interior Department had approved the project without examining the environmental effects of a potential oil spill or adequately reviewing potential harms to bowhead whales.

Shell's oil development plans received another hit in 2010 when environmentalists successfully challenged the company's air pollution permits for its Beaufort and Chukchi sea operations.

But that case was publicly overshadowed when the Deepwater Horizon oil rig exploded in the Gulf of Mexico, and President Obama slapped a moratorium on all oil exploration along American shores. The White House also suspended drilling permits in the Arctic.

Over the years, Shell sought to ease local concerns about the company's oil development plans by agreeing to a series of concessions requested by the North Slope Borough and the Alaska Eskimo Whaling Commission. The two groups, which have significant sway in the indigenous communities in North Alaska, had sided with the environmentalists in early legal challenges.

Shell said it would limit oil exploration during the whaling season and increase scientific funding in the region. In return, the two groups withdrew from the legal battles.

But other Inupiat groups and North Slope communities continue to fight drilling. They bristle at suggestions that the Native community largely accepts Shell's plans.

"You should clearly establish who these Inupiats are that are going along with it," said Robert Thompson, an Inupiat resident of Kaktovik, Alaska, and chairman of a Native group called Resisting Environmental Destruction on Indigenous Lands.

"We have Native corporations that are in business with these companies," he said. "That's fine if they want to do business with these corporations, moneymaking enterprises. But they shouldn't pass off themselves as representing the tribes or the individual people who may have different ideas."

Thompson warned that an oil spill could have devastating impacts on Alaska. "I don't see any positive things for people like myself and Inupiats from the North Slope," he said. "We have everything to lose. We could lose our animals we hunt and our culture, which is related to that."

Three more hurdles

In recent months, Shell has struggled to clear the regulatory decks for its exploration projects.

Early this month, the company successfully persuaded the Coast Guard to relax the certification standards for its oil spill containment barge, the Arctic Challenger. The company argued that the vessel should be considered a mobile unit, which would require it to weather a 10-year storm. Initially the company listed the barge as a fixed platform, which would need to withstand a far more rigorous 100-year storm.

Shell still faces three final hurdles before it can ask Salazar for the final drilling permits.

First, the company must prove that the Arctic Challenger, which is still being built in Bellingham, Wash., can meet the Coast Guard's standards for mobile units. Second, it must demonstrate the effectiveness of its containment dome, which is a key part of the company's oil spill response equipment.

Shell's final hurdle is securing an air permit compliance agreement from EPA that would allow the Noble Discoverer to emit more pollution.

Drilling opponents are taking to the streets to pressure EPA to rule against Shell. Last week, environmental groups held rallies outside EPA's offices in Anchorage and in Washington, D.C., to protest Shell's project.

Opponents say they are grabbing every opportunity available to ask the Obama administration to stop Shell. "We're going to DOI, going to the EPA and going to the White House to try to make sure they understand the full story," said Kristen Miller, government affairs director at the Alaska Wilderness League. "We're asking them not to allow this to go forward."

Beyond the protests, however, the environmentalists have no last-minute Hail Mary court challenges available to block drilling. "There are no remaining court cases that would likely affect drilling this summer," said Michael LeVine, Pacific senior counsel for Oceana.

The opponents are pursuing legal cases that could have the long-term effect of slowing down oil development in the Arctic. Early this month, 10 environmental groups filed a lawsuit challenging the Bureau of Safety and Environmental Enforcement's approval of Shell's oil spill response plan.

They are also appealing previous legal decisions on a separate EPA air pollution discharge permit decision and on the Interior's 2008 Chukchi Sea leases.

"We're here for the long haul," said Erik Grafe, an attorney with Earthjustice in Anchorage. "We're not only focused on Shell's current activities, although we think those are premature. We're trying to make sure that Shell has an adequate spill plan and that they're protecting the clean air in the Arctic." The groups are also trying to force the Interior Department to explain what impacts oil spills would have on the Arctic's sea life and ecosystem.

Protesting beyond the courts

Some drilling opponents are going beyond litigation to stop Shell. Greenpeace has launched a worldwide guerilla protest campaign aimed at shutting down all drilling and industrial fishing in the Arctic Ocean. They want the Arctic nations to create a global wildlife sanctuary at the North Pole.

In recent weeks, Greenpeace shut down Shell gasoline stations in the United Kingdom, posted an anti-drilling billboard near Shell's U.S. headquarters in Houston and released bogus press releases allegedly from the oil company.

Greenpeace has also deployed its 237-foot ice-class ship, the Esperanza, to shadow Shell's exploration operations in the Arctic. However, the activists are under a restraining order barring them from getting within a mile of the company's drilling rigs while they sink wells in the Beaufort and Chukchi seas.

Other environmental activists are hoping to apply some of the lessons learned from Shell's drilling negotiations to help rewrite the federal ground rules for future Arctic energy exploration.

Marilyn Heiman, U.S. Arctic program director for the Pew Environment Group, noted that many of the voluntary environmental concessions that Shell agreed to should be mandated for future drilling projects.

"There needs to be specific regulations for Arctic drilling that all companies have to comply with, so it's not a negotiation between the company and the agency each time they get a permit," she said.

Specifically, Heiman wants companies to be required to stop drilling during whaling seasons, provide more equipment for shoreline protection and allow federal inspectors to remain at the drilling site throughout the drilling process.

As Shell gets closer to drilling this summer, the environmentalists and Native groups are entering a new phase of opposition on the Arctic. Whatever Salazar decides, they say they will be scrutinizing federal decisions and pushing for more science, more protections and less drilling in the Arctic.

"We're not just about this summer," Ritzman of the Sierra Club said. "We're about the long-term prospects for drilling up there. Because no matter what happens, this is the beginning. Whether we see exploration or if exploration doesn't start this year, we'll keep pushing next year."