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Shell reports on plans for Arctic drilling

Article by Carey Restino published 13 March 2015 by The Bristol Bay Times

“After 2012, every aspect of our plan is under a microscope and every aspect is carefully monitored, including the impact on marine mammals,”

Leaders from southwest Alaska were briefed last week on Shell Oil’s plans for the 2015 season, hearing how the company is ready to start work drilling exploratory wells as soon as the ice leaves the Arctic this summer.

“We are ready to start, but we are still committed to a measured and responsible pace,” said Maniksaq Baumgarter, Shell’s Alaska stakeholder manager, at a presentation last week to Southwest Alaska Municipal Conference participants in Anchorage.

Shell’s challenging 2012 season ended with the company only being able to drill top wells in two locations due to problems with its containment barge, which was required to be on scene before drilling efforts went deep enough to hit oil. Late season ice also delayed the operation that year, and caused drill rigs to dodge the ice once they arrived in the Arctic.

But bigger problems came later, as the rigs were leaving the Arctic. The drill rig Noble Discoverer ran into propulsion difficulties that forced it to be towed the final leg into Seward, and the Aiviq, which was pulling the conical-shaped drilling rig, the Kulluk, broke its towline in stormy seas in December. Shortly thereafter, the brand new 360-foot tug lost all engine power.

A U.S. Coast Guard investigation later found multiple safety and environmental protection violations on the Noble Discoverer, run by Shell contractor Noble Drilling LLC, which agreed to pay $12.2 million in fines following a criminal investigation. One charge also related to the Kulluk, which was irreparably damaged when it grounded near Kodiak Island in 2012 after attempts to tow it through the storm failed.

This year, Baumgarter reported the Kulluk was being replaced with the Polar Pioneer, a semi-submersible 279-foot-by-233-foot drill rig built in 1985.

The plan calls for Shell’s rigs to drill only on the Burger Prospect in the Chukchi Sea. Draft exploration plans submitted to the Bureau of Ocean Energy Management call for drilling six exploration wells using the two vessels. Initial plans called for the Polar Pioneer to be stationed in Unalaska rather than traveling to the Arctic. The new plan would have both rigs drilling simultaneously.

“One of the reasons we are bringing on the Polar Pioneer is that it has a proven track record of drilling in the north,” Baumgarter said.

Baumgartner said Shell was still waiting for the final review of a reworked environmental impact statement from the U.S. Bureau of Ocean Energy Managment following a legal challenge to the parameters under which the offshore leases were originally offered. The timeline given to Shell regarding that review will work for the company, he said, with estimates that the process could be completed any day.

The plan is to have both rigs in the Arctic this year, some 15 to 20 miles apart, he said. The rigs should be arriving in Alaska in June, stationing first in Unalaska. Some time after July 1, when the indications are that the ice is clear, the ships will begin moving north, he said. Some vessels will be staged in Kotzebue Sound, mainly oil spill response vessels, while others will station off Wainwright. Crew changes will be run out of Barrow from July through October, Baumgartner said.

Baumgartner was asked by the audience to explain how Shell can move forward with its work when baseline studies have yet to be completed.

He replied that baseline study data is being shared with other oil companies as well as agencies such as NOAA. In addition, Shell has incorporated traditional knowledge into its monitoring program with subsistence advisors and will continue to have wildlife observers on all its vessels who have the authority to stop or alter the course of Shell’s rigs if they say so.

“After 2012, every aspect of our plan is under a microscope and every aspect is carefully monitored, including the impact on marine mammals,” he said.

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RELATED NEW YORK TIMES ARTICLE BY KIRK JOHNSON PUBLISHED 14 MARCH 2015 IN NEW YORK EDITION

Oil Company Lease Stirs Revolt in Green Seattle

SEATTLE — The environmental messaging never stops here, whether from a city-owned electric utility that gets nearly 98 percent of its power from sources untainted by carbon (and is not about to let residents forget it) or the fussy garbage collectors who can write tickets for the improper sorting of recyclables.

So when a lease was signed allowing Royal Dutch Shell, the petrochemical giant, to bring its Arctic Ocean drilling rigs to the city’s waterfront, the result was a kind of civic call to arms. A unanimous City Council lined up alongside the mayor to question the legality of the agreement with the Port of Seattle, a court challenge was filed by environmental groups, and protesters, in bluster or bluff, vowed to block the rigs’ arrival — though the exact timetable is secret, for security reasons — with a flotilla of kayaks in Elliott Bay.

“You have signed a lease that will amount to a crime against the planet,” said Zarna Joshi, 32, a Seattle resident who was first to speak at a raucous three-hour public meeting this week before the port’s commissioners. The meeting was packed mostly with opponents and punctuated by the occasional dissenter, pointing out the hypocrisy of protesters who had arrived to denounce Shell in vehicles running on gasoline.

Officials at the publicly owned port, which has branded itself as a global maritime gateway “where a sustainable world is headed,” have strongly defended the lease, saying the two-year contract would bring in millions of dollars of revenue and create hundreds of good jobs on 50 acres that Shell would use just west of downtown. The decision to allow oil exploration in Arctic waters is in any case federal policy, noted Peter McGraw, a port spokesman, not anything that the port or the city or the State of Washington can alter.

“The port did everything right,” said a lawyer for the Port of Seattle, Patrick J. Schneider, at a court hearing on Friday defending the lease. “It is an outstanding steward of the environment.”

At the center of the dispute lies a tangle of questions about the politics of climate change. Since Shell will not be drilling or exploring for oil anywhere near Seattle, but merely parking for the night, so to speak, can or should the company be denied a berth because of what might or might not happen thousands of miles away off the north coast of Alaska, or what could take place years in the future if burning fossil fuels — maybe produced by Shell, maybe not — raises sea levels or causes other havoc? Lawyers for the port, in court filings, have said opponents are waging an “intense” political campaign that will falter on the rocks of a narrow contractual dispute.

Opponents of the contract, though, said that protecting Seattle’s environment, in the broadest sense, means taking on the fight everywhere. Whether there may be harm from greenhouse gases, or possible environmental damage from an oil spill or other accident in Alaska, to which Seattle is deeply connected in its economy and history, what Shell does in the Arctic, they say, will not stay there.

“Hosting the Arctic drilling fleet in the city of Seattle is an activity that, if successful in drilling and extracting oil from the Arctic, will almost certainly mean that all of the industrial land in Seattle will be under water, and is completely inconsistent with the region’s and even the port’s goals,” said Mike O’Brien, a Seattle City Council member.

Shell used a private shipyard here for repairing its arctic equipment in 2012, which required no public hearings. The difference this time is the involvement by the port, where the commissioners run for office and contracts are public documents. The city’s Department of Planning and Development, under a request sent this week by the City Council and the mayor, is looking at whether the port’s lease, signed with a local company, Foss Maritime, which would manage the terminal site with Shell as the tenant, is consistent with the legal designation of the terminal’s use for “cargo” handling. That decision is expected in a few weeks.

Meanwhile, a lawsuit by the Puget Soundkeepers Alliance and other groups, including the Sierra Club, is challenging the process under which the port reached its decision. In a hearing on Friday before a King County Superior Court judge, the opponents argued that Shell’s use will not be for cargo handling, which is the defined use for the terminal.

The judge, Mariane C. Spearman, pressed lawyers on both sides to explain what exactly Shell would be doing at the site and whether fears of environmental harm were real or speculative, particularly because the rigs are not actually here yet. She said she would rule within the next week whether the case could proceed.

If the lease is revoked, there would probably not be another space on the waterfront big enough to hold the huge rigs, said Mr. O’Brien, the City Council member. A spokesman for Shell, Curtis Smith, said the company had not looked at alternatives. The two rigs Shell plans to bring in — the Noble Discoverer and the Polar Pioneer — are enormous, one more than 320 feet tall and the other more than 500 feet long.

Mr. Smith said the company also remained committed to exploring for oil in the far north. “We have reason to believe the acreage offshore Alaska is home to some of the most prolific, undeveloped hydrocarbon basins in the world,” he said in an email. “As a result, we are advancing our plans to drill in Alaska in 2015 — dependent, of course, on successful permitting, clearing any legal obstacles and our own determination that we are prepared to explore safely and responsibly.”

Shell has spent more than $4 billion on its efforts in the Arctic, but last drilled there in 2012 after a series of setbacks, including the grounding of a drilling rig, the Kulluk, off an island near Kodiak in the Gulf of Alaska. That mishap has also given fuel to opponents like Ian Siadak, who spoke at the lease hearing on behalf of a group formed within the last few weeks called the Coalition for Port Accountability.

“It is up to you whether you will be known as the commissioners who stayed true to their enthusiastically green campaign promises, or the commissioners who sold the planet to Shell Oil,” he said, in demanding that the lease be revoked — within a deadline of two weeks. If that does not occur, he said, “your position will be clear, and we will take further public action.”

Mr. Siadak declined in an interview to specify what action that might be.

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