OFFSHORE DRILLING:

Murkowski decries EPA board's remand of Shell permits

The decision by U.S. EPA's Environmental Appeals Board to delay Shell Oil Co.'s plan to drill in the Beaufort and Chukchi seas last week dealt a major blow to Alaska's economy, a spokesman for the state's senior senator said today.

Robert Dillon, a spokesman for Republican Lisa Murkowski, said the board's decision last week to require Shell to review and revise its plan for drilling in the two "polar bear" seas may have reduced available supplies to the Trans Alaska Pipeline System. The pipeline, he said, is already operating at a third of its capacity and could be forced to shut down if supplies fall too low.

"We have to make sure the pipeline continues to have output in the future, both for energy security reasons but also for Alaska's economy," Dillon said.

Shell had permits to drill in the Beaufort and Chukchi seas that would have allowed the projects to go forward this summer.

But the review board decided on Dec. 30 to remand the permits, faulting EPA's analysis of the impact of nitrogen dioxide emissions from drill ships on the Alaska Native communities as limited.

Shell is now faced with the choice of resubmitting its plans with modifications or challenging the decision in a federal court.

Separate claims that black carbon from the drilling would contribute to climate change were not upheld by the board.

Other challenges to the projects are still pending.

There is disagreement about how much oil product must move through the Alaska pipeline to keep it operational, but Murkowski's office said some experts put the number at 300,000 barrels a year.

If the pipeline's output falls too low and is taken offline, Dillon said, "it is a project that is very unlikely ever to be repeated on that scale."

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