Royal Dutch Shell saw some progress in its Arctic oil and gas drilling program last year. Nonetheless, the company announced on Wednesday that it will not pursue exploratory drilling in Alaska's Arctic waters during 2013.
Oil and gas exploration in the shallow seabeds of northern Alaska has followed a rough road since the federal offshore leasing process was devised in the late 1970s. The industry's initial excitement flagged as costs were found untenable. By the 1990s, no rigs remained in Alaska's Arctic. However, competitive bidding on leasing rights during the Bush administration (2005) unlocked opportunities for companies like Shell to retest the waters. Shell has invested about $5 billion in offshore Arctic leases, as well as underwriting massive lobbying to persuade Washington that Arctic drilling was worthwhile.
Conservation biologist and oil industry expert Rick Steiner represents a widely held opposing perspective. In his blog in The Ecologist two years ago, Steiner said that "Oil drilling in the Arctic Ocean cannot be done without risk and serious impact. There will be chronic degradation, and there will be spills." The overall long-term cost to the region and to the global biosphere may be exorbitant, he believes, far outweighing the short-term benefits and further delaying the necessary global transition to sustainable energy.
Before the end of the drilling season last fall, Shell began its exploratory operations, the region's first in recent memory. The company drilled two of 10 planned prospecting wells in the Chukchi Sea (bordering Russian waters) and Beaufort Sea (bordering Canada).
- Early in September, Shell's drill ship Noble Discoverer sank a well 70 miles offshore in the Chukchi Sea.
- The next month, after the customary Alaska Native bowhead whale hunt, a conical barge, the Kulluk, drilled its well in the Beaufort about 12 miles off the Alaska coast.
Two rigs had to be present in the Arctic at all times for emergency backup capability.
Both wells were "top holes," sealed for now, in which company personnel drilled and cemented pipe casings down to 1,400 feet below the seabed. They also prepared the wells for placement of blowout preventers. Neither well was permitted for development and production because the company lacked adequate spill prevention and cleanup equipment on the site. Both were designed to stop a few thousand feet short of potential mining depths.
However, Shell's introductory work suffered numerous setbacks, leading critics to characterize the initial exploration plans as premature and inadequate. Among the recent problems, these were much more serious than the simple weather delays that also plagued the projects:
- On the Noble Discoverer, main propulsion system difficulties, an anchor drag and near-grounding, an in-port fire, and 16 environmental and safety violations;
- On the Kulluk, engine failures on the ship specially designed to tow the rig to Seattle for maintenance, a New Year's Eve grounding while under tow, and damage to the hull and electrical system; and
- On the company's oil spill response barge, lack of certification and collapsed containment equipment.
As well as Shell itself, the U.S. Coast Guard, Interior Department, Department of Justice, and other agencies are investigating and reviewing the company's 2012 Arctic offshore drilling season.
“Shell’s managers have not been straight with the American public, and possibly even with its own investors, on how difficult its Arctic Ocean operations have been this past year,” said Lois N. Epstein, a member of an Interior Department safety review panel and Arctic program director for the Wilderness Society.
Marvin Odum, Director of Shell Upstream Americas, spoke for the company on Wednesday: “Shell remains committed to building an Arctic exploration program that provides confidence to stakeholders and regulators, and meets the high standards the company applies to its operations around the world. We continue to believe that a measured and responsible pace, especially in the exploration phase, fits best in this remote area."
The effectiveness and safety of Shell's Arctic exploration to date nonetheless remain controversial. Both the Noble Discoverer and the Kulluk will now be towed to dry dock in Asia for maintenance and repairs. As noted in an article yesterday, the work on the rigs may last through the 2013 drilling season, making Shell's announced delay a moot point, significant only for its company policy and public relations value.
Award-winning science writer Sandy Dechert covers developments and environmental issues in conventional, solar, wind, biomass, large and small hydroelectric, and geothermal energy. She detailed events and policy at last fall's 18th UN climate change summit meeting in Doha, Qatar. Sandy has also reported on extreme weather disasters, including superstorm Sandy, winter storm Nemo, and the massive summer wildfires of the past decade.
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