WASHINGTON - Last week Royal Dutch Shell won approval by the U.S. Interior Department to begin drilling up to four oil and gas wells over two years in the Beaufort Sea off Alaska??s northern coast in 2012 ?" plans that will be "closely watched by environmentalists that bitterly oppose Arctic drilling," writes The Hill.

For years Shell has sought to drill in Arctic waters, but before it can begin, the oil company must receive several other approvals including drilling permits and final EPA air permits, as well as other sign-offs from the U.S. Fish and Wildlife Service and the National Marine Fisheries Service, notes the news source.

Shell applauded the department??s decision last week. "The conditional approval of our Revised Beaufort Sea Plan of Exploration is welcome news and adds to our cautious optimism that we will be drilling our Alaska leases this time next year," said spokeswoman Kelly op de Weegh.

Bloomberg reports that Alaska??s waters may hold as much as 26.6 billion barrels of oil, making it the second-largest domestic oil reservoir after the Gulf of Mexico. Shell was ready to begin exploration in 2010, until Interior Secretary Ken Salazar pledged a review of the Alaska plans after the BP oil spill.