AP source: Salazar delays Arctic Ocean drilling

[May 27, 2010]  WASHINGTON (AP) -- The Obama administration is suspending proposed exploratory drilling in the Arctic Ocean.

Interior Secretary Ken Salazar says in a report to be delivered to the White House on Thursday that he will not consider applications for permits to drill in the Arctic until 2011. Shell Oil is poised to begin exploratory drilling this summer on leases as far as 140 miles offshore.

An administration official familiar with the plan said Salazar wants to allow further study of proposed drilling technology and oil spill response capabilities in Arctic waters. The official spoke on condition of anonymity because the plan is not yet public.

Salazar has said he wants to take a cautious approach in the Arctic.

President Barack Obama ordered Salazar to conduct a review of the nation's offshore oil drilling safety after the Gulf of Mexico oil spill last month.

In March, Obama and Salazar canceled a planned 2011 lease sale in Alaska's Bristol Bay, where oil development was proposed by the Bush administration. They canceled four scheduled lease sales in the Chukchi and Beaufort seas and said no additional leases would be offered there until more scientific data are collected.

An administration official said Salazar believes that fisheries, tourism and environmental values in Bristol Bay make the area inappropriate for oil and gas drilling.

Shell, which has leases in both the Beaufort and Chukchi Seas, had sought to begin drilling five exploratory wells in those areas this summer. Salazar's announcement means those wells will not be considered until 2011.

Salazar also is directing the U.S. Geological Survey to conduct an independent evaluation of oil spill risks and spill response capabilities in the state.

Shell Oil, the U.S. arm of Royal Dutch Shell PLC, has the backing of Alaska's political leaders. With few exceptions, they support offshore drilling, a stance articulated by former Alaska Gov. Sarah Palin, the 2008 GOP nominee for vice president.

About 90 percent of Alaska's general fund revenue comes from the petroleum industry. State leaders look to offshore oil to provide jobs and keep the trans-Alaska pipeline from running dry.

[Associated Press; By MATTHEW DALY]

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