"This is progress," said Alaska Sen. Lisa Murkowski, the top Republican on the Senate Energy and Natural Resources Committee. "Today's announcement from the MMS is an encouraging sign that Alaska's oil and natural gas resources can continue to play a major role in America's energy security."

The Interior Department's Minerals Management Service signed off on a plan that allows Shell to drill up to three exploration wells during the July-to-October open-water drilling season. The company's proposal calls for using one drill ship, one ice management vessel, an ice-class anchor-handling vessel and oil spill response vessels, the Interior Department said. The closest proposed drill site is more than 60 miles to shore and about 80 miles from Wainwright.

"Our approval of Shell's plan is conditioned on close monitoring of Shell's activities to ensure that they are conducted in a safe and environmentally responsible manner," Interior Secretary Ken Salazar said today in a statement announcing his decision. "These wells will allow the department to develop additional information and to evaluate the feasibility of future development in the Chukchi Sea.

Shell, Conoco Phillips and other companies last year paid more than $2 billion for leases in the Chukchi Sea off the northwest coast of Alaska. The companies and state officials believe the offshore reserves could power the Alaska economy for decades.