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Policy: Environment & Energy

Obama administration takes step toward issuing Arctic drilling rules

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The Interior Department sent draft regulations for drilling in the Arctic Ocean to the Office of Management and Budget, setting the stage for a future battle over the strength of the safeguards.

No specifics have been released about the draft rules, which were filed on Friday. But the move is a sign that the Obama administration plans to forge ahead with Arctic drilling, albeit with some checks in place.

Too weak of standards would anger environmentalists who say the area is too fragile for drilling — many simply oppose any activity in the Arctic. But it would appease industry groups and congressional Republicans who have said the White House needs to act faster so Arctic competitors like Russia don't gain an edge.

White House efforts on Arctic drilling have focused on the need for infrastructure to support drillers in what has been an untapped frontier. Oil spill prevention and response also might get attention.

The stakes are high for oil companies — the Bureau of Ocean Energy Management estimates the Chukchi Sea area alone holds 15 billion barrels of recoverable oil and 78 trillion cubic feet of recoverable natural gas. The Beaufort Sea could hold 8 billion barrels of oil and nearly 28 trillion cubic feet of natural gas.

But drillers have held back on U.S. Arctic plans after a series of equipment and institutional blunders iced Shell Oil Co.'s efforts in the Chukchi and Beaufort seas in 2012.

Shell adopted voluntary standards more catered toward the Arctic environment than the standard offshore drilling practices employed in other areas. But environmentalists have said Shell's experience shows drilling in the Arctic is unsafe.

The Interior Department listed the draft rules as "economically significant," meaning they would cost the economy more than $100 million per year or that employment, productivity, the economy and government entities would take a hit.

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