Shell defends its Arctic drilling plans

Royal Dutch Shell defended its planned return to Arctic drilling, saying new spill-containment systems would prevent a disaster in the event of an oil leak.

Shell has carried out tests in an environment that replicates Arctic conditions, Chief Executive Officer Ben Van Beurden said Tuesday at a shareholder meeting in The Hague. The company would be able to deploy equipment within an hour of an accident, he said.

“We are actually also doing what I believe is unprecedented and over and above requirements that a regulator would set,” Van Beurden said. “We have gone to tremendous lengths to make sure we understand the risks.”

Shell is returning to the Arctic three years after its rig ran aground in a storm. Opponents say drilling would threaten pristine areas and wildlife already at risk from global warming, while a spill could contaminate the region’s fragile environment. The company contends that the world needs a continuous supply of oil to meet demand.

Without further investment in production, the gap between supply and demand may widen to 70 million barrels a day by 2040, according to Van Beurden. That’s almost seven times Saudi Arabia’s current output.

Shell wants to resume drilling in the Chukchi Sea off Alaska this summer and continue next year, Van Beurden told shareholders. The company needs more approvals from the U.S. government before it can start.