Yereth Rosen: Alaska Dispatch News: October 3, 2015

When Royal Dutch Shell announced that it had lost its big-money bet in the Chukchi Sea and would end its entire program in the offshore U.S. Arctic, the hyperbole and finger-pointing began in earnest.

Rep. Don Young accused President Obama and Interior Secretary Sally Jewell of deliberately sabotaging Alaska’s economy. “I’m sure somewhere Sally Jewell and President Obama are smiling and celebrating Shell’s decision to cease operations off the coast of Alaska,” Young said in a statement issued just after Shell’s announcement. read more

FROM A REGULAR CONTRIBUTOR

The former owners of the Frontier drilling company sold their rigs to Noble for $2.16 billion in 2010. Given that their fleet of five vessels consisted of ancient rust buckets which were fit only for the scrapyard, this has always seemed like an inordinately large sum. The five vessels had been acquired by Frontier for about $100 million. The only client of Frontier was Shell. See http://www.reuters.com/article/2010/06/28/us-noblecorp-idUSTRE65R2C520100628 . (See below)

Noble operated two rigs for Shell in Alaska (Discoverer and Kulluk) during the disastrous 2012 drilling campaign. In spite of their performance in 2012, Noble will once again be operating the Discoverer (now over 50 years old) during the upcoming drilling campaign. Discoverer is one of the rust buckets that Noble acquired from Frontier.   read more

Article by Tim Bradner published 11 April 2014 by the Alaska Journal of Commerce under the headline: Coast Guard: Tug engine failure blamed on water in fuel

It is a mariner’s worst nightmare: At sea, in a bad storm, pulling a heavy load and working to keep control in a dicey situation. Then, all the engines quit. And won’t restart. Precisely this event occurred in late December 2012 to the crew of the Edison Chouest vessel Aiviq as it struggled to keep towlines on Shell’s conical drill vessel Kulluk. The effort failed. The Kulluk went aground off Kodiak Island and was a total loss, which is now well known and documented. It was a miracle that there were no injuries or loss of life, and the evacuation of 18 crewmembers from the Kulluk’s heaving deck by Coast Guard helicopters during the storm was an exploit that should go down in maritime history. read more

Extracts from an article by ROB DAVIES published 9 April 2014 by This is Money.co.uk under the headline: “Shell’s UK corporation tax bill tumbles by nearly 90 per cent as company invests more in North Sea and production declines”

Shell’s UK corporation tax bill tumbled by nearly 90 per cent to just £55.5m last year, as the company invested more in the North Sea and production declined. Shell’s UK bill fell from £487m last year to £55.5m, less than it paid in Nigeria, Norway, Australia, Malaysia, Canada and Italy.

Shell’s public image was tarnished last week by a report from the US Coastguard which criticised readiness for Alaskan Arctic drilling. …the US Coastguard assessment of Shell’s preparedness was rather more cutting. The report criticised the plan for towing the Kulluk, saying Shell showed a ‘lack of respect’ for the conditions. It also said Shell’s decision to tow the Kulluk to Seattle amid rough winter seas was partly motivated by a desire to cut tax, something former boss Peter Voser denied. read more

Article by RACHEL D’ORO Associated Press published 4 April 2014 by ABC NEWS under the headline: “Report: Poor Management Led to Shell Grounding”

A Coast Guard report says poor risk assessment and management were factors that led to the grounding of a Shell oil drilling rig in the Gulf of Alaska in 2012.

The report released Thursday also says Alaska’s tax laws influenced the decision to tow the Kulluk to Seattle. Royal Dutch Shell PLC believed the drill vessel would have qualified as taxable property on Jan. 1, 2013, if it was still in Alaska waters.

The Kulluk broke away from its tow vessel in late December 2012 and ran aground four days later on Sitkalidak Island, near Kodiak. read more

Shell’s quest for new reserves has seen it pump billions into money-devouring plays such as its Athabasca Oil Sands Project in northern Alberta and the Kashagan oilfield, a deeply troubled project in Kazakhstan. It’s even tried deep water drilling in the high Arctic. That attempt ended when the stormy waters of the Chukchi Sea crippled its Kulluk drilling platform, forcing the company to pull up stakes. Investors can’t simply count on ever rising oil prices to justify Shell’s lavish spending on quixotic drilling adventures around the world.

Why Turning a Buck Isn’t Easy Anymore for Oil’s Biggest Players

Jeffrey Rubin: Former Chief Economist, CIBC World Markets

27 Jan 2014

Judging by pump prices, Canadian drivers might think oil companies were rolling in profits that only move higher. Lately, though, the big boys in the global oil industry are finding that earning a buck isn’t as easy as it used to be.

Royal Dutch Shell, for instance, just announced that fourth quarter earnings would fall woefully short of expectations. The Anglo-Dutch energy giant warned its quarterly profits will be down 70 percent from a year earlier. Full-year earnings, meanwhile, are expected to be a little more than half of what they were the previous year. read more

Carey Restino: December 27th 2013

A year ago, a handful of mariners from private vessels, U.S. Coast Guard crews, and those contracted to work for Shell Oil headed into a tremendous storm in an effort to save a buoy-shaped oil rig from grounding off Kodiak Island. The Kulluk, a Shell Oil drill rig that had been working in the Arctic, was adrift off the coast of Kodiak Island and the tug that had been pulling it had lost all engine power as it attempted to tow the rig from Unalaska to Seattle through a winter storm. Now, a year later, Shell is applying for permission to return to the Arctic in 2014. As federal officials review the application, the magnitude of the attempt to rescue the Kulluk has only been told in pieces. Here is one man’s story of that effort as the chief engineer aboard the responding Crowley tug Alert. read more

   Author: Tavis Potts, Senior Lecturer in Oceans Governance at Scottish Association for Marine Science: 20 Sept 2013

I have a great respect for National Geographic. I’m a card-carrying member with an annual subscription, and I appreciate the balance, depth and understanding they bring to revealing the links between the natural and human world.

So the latest issue had prepared me for a recent debate at the Royal Society in London which examined the question of the Science of Change in the Arctic. It painted a stark and disturbing picture of our planet’s future in terms of the impact of global sea level rise on coastal cities. It dramatically brought home the message that a fossil fuel-driven civilisation has profoundly altered the planet, which by 2070 will put some 150m people and US$35 trillion worth of assets in the world’s coastal cities at risk from flooding. Our desire for carbon intensive energy has raised sea level by 60mm since 1994 and the draft fifth IPCC report predicts a one metre rise by the end of the century. That is a lot of coast underwater. read more

Today the U.S. Environmental Protection Agency announced settlements with Shell Gulf of Mexico, Inc. and Shell Offshore, Inc. for violations of their Clean Air Act permits for arctic oil and gas exploration drilling in the Chukchi and Beaufort Seas, off the North Slope of Alaska. Based on EPA’s inspections and Shell’s excess emission reports, EPA documented numerous air permit violations for Shell’s Discoverer and Kulluk drill ship fleets, during the approximately two months the vessels operated during the 2012 drilling season. In today’s settlements, Shell has agreed to pay a $710,000 penalty for violations of the Discoverer air permit and a $390,000 penalty for violations of the Kulluk air permit.

Release Date: 09/05/2013
Contact Information: Suzanne Skadowski, EPA Region 10 Public Affairs, 206-295-4829, [email protected]

(Seattle – September 5, 2013) Today the U.S. Environmental Protection Agency announced settlements with Shell Gulf of Mexico, Inc. and Shell Offshore, Inc. for violations of their Clean Air Act permits for arctic oil and gas exploration drilling in the Chukchi and Beaufort Seas, off the North Slope of Alaska.

Based on EPA’s inspections and Shell’s excess emission reports, EPA documented numerous air permit violations for Shell’s Discoverer and Kulluk drill ship fleets, during the approximately two months the vessels operated during the 2012 drilling season. read more

While physically at a standstill, the Aiviq sits at the center of a federal investigation with multibillion-dollar implications for Arctic oil drilling. The U.S. Coast Guard probe seeks to answer why a massive oil rig the Aiviq was towing last winter broke loose and ran aground in the Gulf of Alaska. Royal Dutch Shell PLC, which was overseeing the operation, announced in February it would temporarily freeze its Arctic push.

Vessel sits in Everett as probe of accident unfolds

By Noah Haglund, Herald Writer:  Published: Sunday, September 1, 2013, EVERETT — The walrus has basked for months in the relative warmth of Port Gardner after an unlucky Alaskan winter.She’s expected to linger on the waterfront, perhaps through the end of the year, in all of her white and blue metallic splendor.The walrus visiting the Port of Everett is no tusked marine mammal. The 360-foot ice-class anchor handler is built to tow Arctic oil rigs.The ship’s given name, Aiviq, means walrus in Inupiaq, a language spoken by northwest Alaska natives.

While physically at a standstill, the Aiviq sits at the center of a federal investigation with multibillion-dollar implications for Arctic oil drilling. The U.S. Coast Guard probe seeks to answer why a massive oil rig the Aiviq was towing last winter broke loose and ran aground in the Gulf of Alaska.

Royal Dutch Shell PLC, which was overseeing the operation, announced in February it would temporarily freeze its Arctic push. In the meantime, the Aiviq is likely to remain tied up in Everett.

“Our future exploration plans for offshore Alaska will depend on a number of factors,” said Megan Baldino, a Shell Alaska spokeswoman. “That includes the readiness of our rigs and confidence that lessons learned from our 2012 drilling program have been fully incorporated.” read more

By Tim Bradner, Alaska Journal of Commerce:

Published: 2013.08.15 10:55 AM

The U.S. Coast Guard’s marine casualty investigation into the grounding of Shells’ drillship Kulluk in late 2012 will be concluded Aug. 19 but will not likely be made public until after the first of the year, a Coast Guard spokesman in Alaska said Aug. 14.

Coast Guard spokesperson Kip Wadlow said the investigating officer, Cmdr. Joshua McTaggert, will to deliver his report on the accident to the Coast Guard’s Alaska Commander Rear Adm. Thomas Ostebo on Aug, 19. read more

By Tim Bradner, Alaska Journal of Commerce: June-Issue-2 2013

Two weeks of U.S. Coast Guard hearings on the grounding of Shell’s drill rig Kulluk concluded May 30. A report on conclusions of the inquiry is due in early July, but that deadline may be extended, Coast Guard Lt. Commander Brian McNamara said.

Coast Guard officials are probing Shell’s decisions and risk analysis in sending the drill rig across the Gulf of Alaska under tow during the winter, and whether the proper tugs and tow equipment were used. read more

The panel heard about busted shackles lost at sea. Snapped towlines. Fuel injectors clogged with slime. Forty-foot seas. And harrowing rescue attempts by Coast Guard helicopters to pluck Kulluk crewmembers from a deck that pitched and rolled with each wave. Shell’s Alaska operations manager even admitted the Kulluk left port in Dutch Harbor during the stormiest time of year to avoid paying state taxes, calling into question earlier statements from the same official.

By ANDREW C. REVKIN: June 5, 2013

The Natural Resources Defense Council has issued a statement concluding that recent events — most notably the grounding of a Shell Oil drilling rig in Alaska — show the oil industry is not ready to safely, cleanly drill offshore in the Arctic.

I agree. There’s no logic for pushing fossil-fuel frontiers this extreme while neglecting energy-efficiency measures at home.

Here’s the group’s argument, which builds on its earlier, and justified, criticism of President Obama’s vague new “National Strategy for the Arctic Region”: read more

Around Dec. 7, Shell made the decision to leave that month, weather permitting, Churchfield said. The timing stemmed from concerns Shell had about the prospect of millions in state property taxes that could be assessed if the Kulluk were in Alaska at the first of the year, Churchfield told the panel. But the decision to go in December put the Kulluk and Aiviq into a fierce storm.

Published: June 1, 2013

By LISA DEMER — [email protected]

Over nine days of testimony that wrapped up last week in Anchorage, witnesses told a Coast Guard panel investigating the Dec. 31 grounding of a Shell drilling rig about equipment failures, fuel problems and human error during the troubled voyage and frantic but failed effort to save the Kulluk. Now it will be up to the Coast Guard panel to determine just what caused the Kulluk to crash onto the rocks south of Kodiak Island.

In the hearing, part of a broader formal marine casualty investigation, boat captains, Royal Dutch Shell executives, a Coast Guard officer and others involved in the troubled tow of the Kulluk added new dimension and detail, along with informed theories, to what’s already known about the near-disaster. Some described how it could have been much worse. read more

The Coast Guard says testimony taken during the formal marine causalty investigation hearing, held in the city Assembly Chambers at the Loussac Library, may lead to anything from new industry requirements to criminal charges.

May 30, 2013|By Dan Carpenter | Channel 2 News

ANCHORAGE, Alaska — The U.S. Coast Guard has wrapped up its investigative hearing into the grounding of the Royal Dutch Shell drilling rig Kulluk, after nine days of testimony in Anchorage from key industry and government professionals.

On Thursday, the investigating panel looked into how Shell calculates risks before towing one of its vessels.

Jonathan Wilson, who managed the recovery tow of the Kulluk from Kiliuda Bay to Dutch Harbor in February, spoke over the phone from London. Wilson says the job was considered a “critical tow” due to a number of factors, including the state of the rig after it was damaged during its Dec. 31 grounding on Sitkalidak Island near Kodiak. read more

By LISA DEMER — [email protected]: Published May 28, 2013

An employee for a Shell contractor testified Tuesday that a heavy chain — which investigators indicated can be used to absorb the force of rough weather — was eliminated from the towing setup for Shell’s drilling rig, the Kulluk, because of concerns about handling the gear.

William Hebert works for Delmar, a Louisiana offshore oil field services company, and was sent to Alaska to serve as “rig move coordinator” for the Kulluk. He testified on Day 7 of a Coast Guard hearing investigating the Kulluk’s Dec. 31 grounding in a fierce Gulf of Alaska storm. read more