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Official pledges support for Arctic drilling

ANCHORAGE, Alaska -- The Interior Department's deputy secretary said Thursday that there will be no slowdown of the permitting process for Arctic offshore drilling if President Obama is re-elected.

Royal Dutch Shell PLC was allowed to begin exploratory drilling in the Beaufort and Chukchi seas off Alaska's north shores this summer, but U.S. Sen. Mark Begich, D-Alaska, told Interior Deputy Secretary David Hayes that he's heard concerns that permitting might be reversed.

"That's a question we hear rumbling out there," Begich said.

That's not the case, Hayes said.

"Shell and a number of other companies have leases that they have entered into with the United States government that give them certain development rights," he said. "It's our responsibility under the law to implement those permitting processes and we will continue to do that."

The exchange took place at a Senate subcommittee hearing billed as an opportunity to review lessons learned following the first Arctic exploratory drilling in two decades.

Royal Dutch Shell PLC has spent $4.5 billion on Arctic offshore drilling, hoping to tap into reserves estimated by the U.S. Geological Survey at 26 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas. ConcocoPhillips and Statoil could begin exploratory drilling in the next two years.

Begich invited government representatives and businesses that support drilling but nobody from the environmental community that bitterly opposes Arctic offshore drilling. They claim oil companies have not demonstrated an ability to clean up a spill of crude oil in ocean waters partially filled with or covered by ice. They also claim there are gaps in basic science knowledge and infrastructure in the region.

Laura Furgione, acting director of the National Weather Service, touched on gaps from her agency's perspective. The Arctic, she said, has little of the information infrastructure needed to provide weather forecasts and warnings of a caliber available in mid-latitudes. A primary reason, she said, is the scarcity of field observations.

Shell Alaska Vice President Pete Slaiby said 2012 was a drilling program success, even though problems with its oil spill response barge kept Shell from receiving permission to drill into petroleum-bearing rock.

The barge carries a containment dome that could hover over a compromised well and funnel oil and gas to the surface. The dome was damaged during testing Sept. 15.

"Our investigation revealed that a faulty electrical connection associated with one of the valves caused the valve to open, which caused the rapid descent and ultimate damage to the dome," Slaiby said. "Safety systems ensured that the dome did not hit bottom, but buoyancy chambers were damaged."

The system will be ready for 2013, Slaiby said.

Shell wants to see continued streamlining of the permitting process, he said, and permitting agencies under one roof.

Federal agencies, he said, must have the substantial resources to make timely decisions.

"Shell paid $2.2 billion for it leases, and I don't think it's exaggeration to say that we would expect the agencies that will administer this work are funded to an appropriate level to allow us to move forward with the investments," he said.