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Blowout Complicates Plan to Drill in Arctic


MAY 15, 2010


ANCHORAGE, Alaska—Plans by Royal Dutch Shell PLC to begin exploratory oil drilling in the Arctic Ocean this summer are drawing increased scrutiny in the wake of the Gulf of Mexico oil spill.

Interior Department officials—under pressure from native and environmental groups to halt the activity—say their final drilling permits will be contingent on new safety reviews.

Last fall, Interior Secretary Ken Salazar approved Shell’s plans to drill five exploratory wells in the Chukchi and Beaufort seas after the area was opened to oil and gas leasing in 2008 by the Bush administration. But Interior still has to sign off on the permits, and officials there now say their decision would rest, in part, on the outcome of a federal review President Barack Obama ordered completed by May 28 of safety issues pertaining to drilling in U.S. offshore waters.

Meanwhile, a coalition of 14 environmental groups joined by the native village of Point Hope, Alaska, sent a letter to Mr. Salazar on May 5 asking him to reconsider Shell’s approval on grounds that the Minerals Management Service, the Interior Department agency that regulates offshore drilling, didn’t “analyze or disclose the effects of a large oil spill” from the exploratory drilling when the MMS approved it.

On May 3, the Northwest Arctic Borough—populated mostly by Alaskan native people—sent a letter to the MMS urging that Shell’s plans be suspended or revoked until the cause of the April 20 Gulf spill at a BP PLC-owned well can be determined.

A key concern among all the groups: that a giant spill in the Arctic Ocean would devastate the fragile environment, and wreak havoc on the culture and economy of native villages that depend on subsistence hunting of marine creatures like the bowhead whale. “The ocean is our garden,” said Earl Kingik, a tribal elder in the Inupiat community of Point Hope. “If any oil spills in our garden, the currents would blow it to us.”

Arctic drilling in Alaska has been mostly confined to coastal land areas such as at Prudhoe Bay, but both the industry and state are pushing to open new fields offshore to help keep oil flowing through the aging Trans-Alaska Pipeline.

Shell officials say they have no plans to delay their drilling, but acknowledge that the Gulf spill didn’t help the Anglo-Dutch company’s public-relations efforts. “Yeah, I woke up that day [of the spill] and said, ‘Yes, this truly will impact the way people look at this industry,’ ” said Pete Slaiby, a Shell vice president in Anchorage.

As part of the federal safety review, MMS Director Elizabeth Birnbaum on May 6 sent a letter to Shell officials asking for an accounting of any additional safety procedures that the company is proposing in light of the Gulf spill. That disaster, she wrote to Shell Oil Co. President Marvin Odum, “highlights the importance of taking every step necessary to ensure the safety of all offshore drilling operations.”

But Shell officials said the Arctic drilling poses less of a threat of a disastrous spill than the Gulf, in part because of differences in geography.

One difference, Mr. Slaiby said, is that the BP well at 5,000 feet deep on the Gulf floor was under far greater pressure than Shell’s would be, because the seabed where the exploratory drilling is to take place is only about 150 feet deep. He added that his company’s drilling sites also would be surrounded by ice much of the year, helping to hold any spilled oil in place for a cleanup.

Shell officials also say they will have the protective barriers known as boom, ice cutters and equipment in place to respond quickly to any spill. But critics question the effectiveness of a response given the remoteness of the Arctic, and say it would be hard to contain any oil during the spring season when the icepack moves a great deal.

“It would be impossible to control it,” said Richard Steiner, a former marine-biology professor at the University of Alaska and a longtime industry critic. “That’s why Obama should take this off the table.”

Shell officials say they could clean oil in any ice condition, and point to an industry-commissioned study completed in 2009 that concluded a spill in ice-covered waters can be easier to control and clean up than in non-icy waters.

Even more important than spill response, though, is prevention, Shell officials say. “The idea is, we don’t want a spill,” Mr. Slaiby said. “This is devastating to us, too.”

Write to Jim Carlton at [email protected]


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