Oct. 23--The U.S. Minerals Management Service on Oct. 19 gave conditional approval to plans by Shell Offshore Inc. to drill two exploration wells in 2010 on two outer continental shelf leases in Alaska's Beaufort Sea.

It was the first action taken by the Obama administration on Alaska outer continental shelf exploration.

The North Slope Borough, which opposed a similar plan from Shell in 2007 and filed a lawsuit to stop the drilling, has made favorable comments about the latest proposal.

The approval was on Shell's exploration plan, the initial step in the company's effort to acquire federal and state permits for drilling.

Shell still has obstacles to overcome, including an important federal air quality permit and permits from the state of Alaska.

Also, it's likely that environmental groups will again sue to stop Shell's drilling, as they did when the company proposed a plan two years ago.

North Slope Borough Mayor Edward Itta made no comment of litigation in a statement following the MMS decision.

"Shell made a substantial effort to reduce impacts and shrink the footprint of its 2010 exploration work in the Beaufort Sea, and I appreciate that," Itta said in his statement. "We will continue to work with them to achieve the safest possible operation in these sensitive waters. We'll also be watching to see if state and federal regulators do their part in assuring safe operations too."

MMS's decision requires Shell to suspend drilling during the autumn migration of bowhead whales through the Beaufort Sea so that Alaska Native hunters would be able to conduct subsistence hunting without disturbance.

Shell would be able to return to the drilling after the subsistence hunt is completed, the MMS said in its decision.

Shell plans to use the drillship Frontier Discoverer, which has been modified to operate in summer Arctic ice conditions.

The company also hopes to drill a well in 2010 in the Chukchi Sea using the drillship, but MMS approval for that exploration is still pending.

Shell will still have to acquire several other federal and state approvals, including an air quality permit that would be issued by the U.S. Environmental Protection Agency, as well as an Alaska Coastal Management Program consistency determination from the state of Alaska.

The MMS approval is significant to Alaska, as it is the first OK from Interior Secretary Ken Salazar and the Obama administration for OCS exploration.

"This decision shows Secretary Salazar and the Obama administration recognize the importance of Alaska's abundant offshore oil and gas resources," Sen.