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What’s the rush for Shell to drill in the Arctic? The oil is not going away.

FROM A FORMER EMPLOYEE OF SHELL OIL USA: REPUBLISHED WITH UPDATED INFORMATION SUNDAY 9 JANUARY 2011

John,

I read your postings about Shell Oil’s latest problems in getting drilling permits for drilling in the Arctic. Frankly, I think the emissions issue is a canard. The NOx emissions from Prudhoe Bay and satellite facilities year round dwarf those that Shell would generate in the few months of a summer drilling season.

I think the issue is much larger.

Shell and others have discovered oil, and lots of it, in structures that were drilled previously. Shell’s drilling program is designed largely to delineate the size of those accumulations. A major concern will be reservoir quality and continuity, and Shell wants to get a better handle on reservoir properties and recoverable volumes in those previously drilled structures.

So, what we are really looking at with this drilling program is a ‘proof of commerciality’ for some of those structures. That means Shell will be looking at a development program within a few years. Development of those accumulations will be Sakhalin and Hibernia type programs. Massive concrete structures will need to be built to withstand the sea ice and provide on site storage space for large volumes of oil. Tankers will shuttle that oil from the production platforms to market through perhaps 6-9 months of the year, depending upon ice conditions and whether using icebreakers in late spring and early fall can keep the oil flowing to market on a profitable basis.

These massive structures, which will rest on the sea floor, will never be removed. The have a finite lifetime, and at the end of that lifetime they will need to be cleaned and then probably demolished on site. They will be built at some location and towed to location, and then sunk so they rest on the sea floor.

Production of oil will also include the production of a fair amount of gas. Will Shell be allowed to flare that gas (highly doubtful) or will they be required to re-inject it into the production reservoir? Re-injection is almost a given.

These massive concrete structures will have to be built somewhere, and that probably means somewhere on the North Slope. These are massive construction projects and they will forever change the communities where they are located. Where will these structures be built? Dutch Harbor, in the Aleutian Islands? That is a long tow to the North Slope. Perhaps a North Slope Canadian location would be closer and more economical. Shell has probably already made that decision.

Multiple production platforms means lots of air pollution, and water pollution. It is inevitable.

How will Shell be allowed to dispose of drilling fluids and waste cuttings from the wells they drill. Usually they are dumped over the side.

And on top of all of this there is Shell’s miserable history in the Russian Arctic. And they have begun their Alaska program using two very beat-up old drill ships to ‘cut costs’. In short, they want to drill ‘on the cheap’, and that attitude will probably carry over into their development program as well. History has shown that sort of attitude and method of operation leads to serious problems, as in the 1970 Shell Bay Marchand blowout, the 1988 Shell Bourbon platform blowout, both production platforms in the Gulf of Mexico, and the BP blowout this year. And on it goes.

I think people are looking ahead and beginning to ask questions. They are looking at how Shell is approaching the whole affair, and I don’t think they really like what they see. Nobody trusts Shell, that is for sure. It would be gross stupidity to do so.

And to complicate matter, DOI has absolutely no experience in the oversight of such projects. None. They need time to do their homework and build an organization capable of effective oversight.

So, what is the rush? The oil is not going away.

RELATED INFORMATION

Here is a short blurb on pipeline burial problems in the Chukchi Sea. A great deal of work has been done on the ice scour issue and the impact is has on production facilities and pipelines. That is why oil companies have to date opted to build islands in shallow water connected by causeways. The pipelines are in the causeways and are therefore protected.

http://www.intecsea.com/project_experience/project/default.asp?project_id=26

Attached is link to a fairly large report discussing the ice gouging problem and pipeline design issues. Pressure ridges are a problem, and so are icebergs.

Design Options for Offshore Pipelines in the US Beaufort and …
(This document has 231 pages)

The icebergs can dig very deep furrows in soft sediment. I don’t know how much of a problem they are in offshore Alaska. I don’t think they are much of a problem. I do know that they are a serious problem in the straits between Canada and Greenland. Shell also did studies in that area as well. Icebergs pose a serious problem for offshore pipelines in Nova Scotia, etc.

The pressure ridges also pose a problem for fixed offshore platforms because they can be fairly massive. Back in the 1980’s Shell had no experience with massive concrete gravity platforms, and we all knew typical steel platforms, which were Shell’s Head Office Engineering specialty, wouldn’t work, no matter how much they wanted them to work.

The situation has changed today. RD Shell, and particularly ExxonMobil have experience with designing massive concrete platforms for the Sakhalin and Hibernia fields. I anticipate that Shell would built massive concrete gravity platforms for the Chukchi offshore development programs, and that the oil would be loaded onto tankers. The field would probably be closed in for a good portion of the year because of heavy pack ice and pressure ridges. Those ridges will stop icebreakers dead in their tracks.

These concrete gravity structures are multi-billion dollar projects, and ExxonMobil and the Canadians have far more experience building them than Shell does. ExxonMobil was the real innovator in this area of offshore platform design.

Any interested journalists should visit the Hibernia website and maybe chat with ExxonMobil about the building and design of these structures and then contrast ExxonMobil with Shell. Exxon is a huge company, and very bureaucratic, but far more professional than Shell. That will come through in any discussions.

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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