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Obama administration clears hurdles for drilling off Alaska coast

The Obama administration has essentially given oil company Royal Dutch Shell the go-ahead to start drilling off the coast of Alaska. Environmental groups have long warned of the dangers of doing so, but estimates show there may be as much as 22 billion barrels of oil and 93 trillion cubic feet of natural gas in the area. Judy Woodruff talks to Coral Davenport of The New York Times.

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  • JUDY WOODRUFF:

    The Obama administration has essentially cleared the way to allow Royal Dutch/Shell to begin drilling for oil and gas in the Arctic Ocean this summer. It's one of the most consequential and long-awaited drilling decisions from the government. Shell is seeking approval to drill in the American portion of the Chukchi Sea off the coast of Alaska.

    Environmental groups have long warned of the dangers of doing so. Estimates show there may be as much as 22 billion barrels of oil and 93 trillion cubic feet of natural gas in the area.

    Reporter Coral Davenport covers all this for The New York Times, and she joins me from its Washington bureau.

    Coral Davenport, welcome.

    Let's — help us understand a little better what area we're talking about. Exactly where is it, how large is it, what does it look like?

  • CORAL DAVENPORT, The New York Times:

    Judy, it's a very big portion of the Arctic Ocean.

    The part that they're looking at, where Shell's leases are, are about 70 miles off the coast of Alaska. It is a pristine, untouched area. It is home to habitats of several rare species, large mammals, migrating habitats for whales, feeding habitats for walrus.

    It's also a very treacherous area, extreme storms, waves of up to 50 feet high, completely frozen over with ice in the winter. So this is a very remote, very treacherous, almost completely untouched area.

  • JUDY WOODRUFF:

    So, understanding the environmental objections, we know Shell has had difficulties in the past with some drilling in similar circumstances. What has Shell said it's going to do to protect the environment?

  • CORAL DAVENPORT:

    So, this is not the first time the administration has given a go-ahead to Shell to drill in the area. It gave a permit to Shell to start exploring to see what's in the area.

    They went in, in summer of 2012. They were plagued that whole period with safety problems, operational problems. They had two rigs that went to ground that had to be towed away. The administration said that they wouldn't reissue a permit to Shell until they had gone back, assured that they would upgrade their safety and operations procedures.

    In the meantime, the administration had also put forth new drilling safety regulations that anyone drilling will have to follow. Environmental groups of course still say, despite all these promises, all these assurances and new regulations on the part of the administration, this area is just so treacherous to drill and so pristine that they fear that it's still an accident waiting to happen.

  • JUDY WOODRUFF:

    Well, what else should we know about why the administration has agreed to do this? Oil prices are certainly down. The supply is up.

    What is the administration saying is a rationale?

  • CORAL DAVENPORT:

    Well, some of this is built in.

    These areas, these federally owned portions of land were sold by the Bush administration to be drilled, to be leased. And so Shell paid for its lease to drill during the Bush administration. They applied for a permit to use that lease to go in and drill it.

    If the Obama administration had ignored that permit or had, you know, just completely thumbed it down or denied it, Shell absolutely would have sued. If they were to have taken away the permit, they would have to give Shell back the money that it had paid for it, so some of this was just a matter of the Obama administration had to deal with what was on its plate.

    Again, nonetheless, environmental groups are surprised and saying, could it have found some kind of way not to do this? It really is still a very striking — striking piece of this president's environmental legacy.

  • JUDY WOODRUFF:

    But this does, Coral Davenport, this essentially clears the way for this to happen. And we understand this summer, there is not much else that could take place in the meantime in the courts or elsewhere to stop this?

  • CORAL DAVENPORT:

    Right.

    To be clear, what the administration gave today was a conditional approval. They cleared the last — sort of second-to-last and certainly the last major hurdle for Shell to move forward. It gave it on condition that Shell made sure it gets the rest of some of its local and state-level permits. The company has said it's moving forward with doing that. That will be the absolute final.

    But people I have talked to said this is just sort of 95 percent of the way there. And the big piece that everyone was waiting for to see which way it would go was this decision by the Obama administration.

  • JUDY WOODRUFF:

    All right. It's a story that everyone is — I know is watching.

    Coral Davenport with The New York Times, thank you.

  • CORAL DAVENPORT:

    Thanks so much, Judy.

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