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Shell Arctic debacle

Screen Shot 2014-09-06 at 21.06.55Article by Jeremy Cresswell published by EnergyVoice.com on 6 Jan 2015 under the headline:

“Noble Drilling has book thrown at it by Alaskan authorities”

The paper stated: “So obviously, the safeguards in place to date have about as much teeth as a guppy. How do we know the repairs done truly take care of the problems with Noble Discoverer? Because Noble Drilling and Shell say so?”

PREDICAMENT: Drilling rig Kulluk aground in Alaska

Written by Jeremy Cresswell – 06/01/2015 6:00 am

Noble Drilling has been charged with environmental and maritime crimes for operating the drill ship Noble Discoverer and the drilling unit Kulluk in violation of federal law in Alaska in 2012.

Under the terms of a plea agreement filed in the Alaskan federal court early last month, Noble Drilling (US) is pleading guilty to eight felony offences, will pay $12.2million in fines and community service payments, implement a comprehensive “environmental compliance plan”, and will be placed on probation for four years.

In addition, Noble’s parent, Noble Corporation plc which is headquartered in London, has agreed to implement an environmental management system covering its fleet of offshore rigs, wherever they operate in the world.

The Alaskan authorities basically threw the book at Noble Drilling (US), which was charged on eight counts including knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the US Coast Guard of hazardous conditions aboard the drill ship Noble Discoverer.

At the time the offences were committed, the Noble Discoverer was operating under contract to Shell, which intended to use them for drilling in the ice-bound Beaufort Sea.

After leaving its drilling location under tow, the Kulluk ultimately ran aground off the coast of Unalaska when it broke free in bad weather.

The Noble Discoverer, a converted log carrier, was dead-ship towed from Dutch Harbor to Seward due to failures with its main engine and other equipment. It also ran aground.

Noble has admitted that it knowingly made false entries and failed to record its collection, transfer, storage, and disposal of oil in the Noble Discoverer’s and the Kulluk’s oil record books in 2012.

Oil record book entries falsely reflected that the Noble Discoverer’s oil water separator (OWS) was used during periods of time when in fact the OWS was inoperable.

Noble had problems managing the bilge and wastewater that was accumulating in the engine room spaces of the Noble Discoverer. This and other conditions led to a number of problems.

Noble devised a makeshift barrel and pump system to discharge water that had entered the vessel’s engine room machinery spaces directly overboard from the Noble Discoverer without processing it through the required pollution prevention equipment as required by law.

Noble failed to notify the Coast Guard about this system, and took steps to actively hide the fact that it was being used.

In the plea agreement, Noble also admits that it negligently discharged machinery space bilge water from the Noble Discoverer into Broad Bay, Unalaska, on July 22, 2012.

While anchored in Dutch Harbor, the Noble Discoverer’s bilge holding tank 27S overflowed and went overboard, creating a sheen in Broad Bay.

Noble Corporation stated in a press release that it has taken responsibility for these actions and assisted in the investigation and in implementing changes in its vessel and management process.

It said that “concerns related to the Noble Discoverer have been addressed during the renovation and modernisation of the rig which occurred as part of an extensive shipyard programme conducted in Korea and Singapore”.

It has been reported locally in Alaska that Shell intends to carry on using the Discoverer in its next Beaufort Sea campaign.

And an extensive editorial in the Alaska Dispatch News is calling into question the competence of the US Coastguard to carry out inspections and issue approvals. Likewise, relevant federal agencies overseeing Shell’s plans are also criticised.

The paper stated: “So obviously, the safeguards in place to date have about as much teeth as a guppy. How do we know the repairs done truly take care of the problems with Noble Discoverer? Because Noble Drilling and Shell say so?”

SOURCE

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From The New York Times: 5 Jan 2015

The Moral of the Kulluk

By Joe Nocera

The cover story of The New York Times Magazine on Sunday, “The Wreck of the Kulluk,” by McKenzie Funk, is one of those articles that you can’t put down even though you know how it turns out. The Kulluk was an offshore exploratory drilling rig, owned by Royal Dutch Shell, which, in December 2012, ran aground in some of the most inhospitable waters in the world.

The Wreck of the Kulluk: 30 Dec 2014

Those waters were the Chukchi and Beaufort Seas in the Arctic Circle, more than 1,000 miles from Dutch Harbor, Alaska, the nearest deep-water port. The rig, which had been towed — with great difficulty — to the Beaufort Sea, was in the process of being towed out again, barely two months after the drill bit touched the sea floor, before ice formations would make the route impassable. The Kulluk and its tow soon ran into a series of dangerous storms. Although no one died, Funk keeps you on the edge of your seat by describing in detail the hair-raising ordeal, which led to the tow captain of a rescue tugboat cutting the Kulluk adrift to ensure his own men’s safety. The Kulluk’s crew, meanwhile, was airlifted via helicopter, in a dramatic, and dangerous, rescue.

Funk also does a nice job laying out all the mistakes Shell made. Despite spending $6 billion preparing to explore for oil in this remote part of the world, it didn’t plan adequately, and it cut too many corners. According to the Coast Guard, which investigated the Kulluk disaster, not only had Shell’s risk management been “inadequate,” but there also had been a significant number of “potential violations of law and regulations.”

I came away from Funk’s article, however, with another thought: Even if Shell had done everything right, what were the chances of something bad happening to the Kulluk, or, more broadly, to any drilling program in that part of the Arctic? They were high. Although this area is considered to hold one of the last great oil fields — with an estimated 23 billion barrels — is drilling for it really worth the risks?

The first issue is the weather. One of the reasons this remote location is at least theoretically accessible to oil companies is because of climate change. “There is less ice, and it is receding from the shore,” said Michael LeVine, the Pacific senior counsel of Oceana, an environmental group dedicated to preserving the world’s oceans. But, he adds, climate change is also affecting the wind, the water and the currents. An area that was already remote, cold and dark is something else as well: unpredictable. Companies trying to explore for oil in the region are essentially flying blind.

Then there is the question of whether the government is up to the task of regulating such high-risk ventures. The answer is: probably not. Even after the Deepwater Horizon spill in the Gulf of Mexico — and despite some improvements in safety regulations — government regulation is still way behind the oil industry. “The technological capabilities and the need for oil companies to drill in more remote places has outstripped the government’s ability to keep up with it,” LeVine told me

There are a host of important environmental issues: the industry hasn’t gotten better at dealing with oil spills since the Exxon Valdez spill 25 years ago, for instance. Yet because the climate is so difficult, the chances of an environmental calamity are increased.

As regular readers know, I am hardly opposed to drilling for oil or gas. Yet this particular high-risk venture seems both foolish and unnecessary. For one thing, the world is awash in oil, thanks to a slowdown in demand and increase in supply because of the fracking revolution. For another, the price of oil is so low as to make new, expensive exploration in the Arctic unprofitable.

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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