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Shell Hopes to Resume Alaskan Arctic Drilling in 2014

12:07 pm in Uncategorized by EdwardTeller

The Kulluk in happier times

Royal Dutch Shell announced to shareholders last week that they are contemplating a resumption of oil drilling in Arctic waters adjacent to Alaska this coming summer season:

“We have not yet confirmed if we drill in 2014, but we do expect to file an exploration plan shortly, maybe in the next couple of weeks. It’s likely to be focused on the Chukchi,” Shell Chief Financial Officer Simon Henry told reporters in a media teleconference detailing the company’s third-quarter results.

Shell reported third-quarter earnings that were nearly a third lower than those for the third quarter of 2012. The company cited numerous reasons for the drop, including weaker refinery-business conditions, increased upstream operations and exploration costs, challenges in Nigeria and reduced dividends from an LNG venture.

After an expensive series of mishaps in late 2012 and early 2013, Shell sat out the recently ended 2013 drilling season, as they licked their self-inflicted wounds:

The New Year’s Eve grounding of the Kulluk, the Shell-owned drill ship dedicated to Beaufort operations, was apparently the final blow to the company’s plans to operate there, at least for the foreseeable future. The Kulluk was so badly damaged in the grounding that it may never return to service. It’s been in a Singapore shipyard for months.

“We will not take the Kulluk back next year,” Henry said. “The repair costs may exceed the benefits of doing so.”

The so-called “impairment costs” for the Kulluk could be “a few hundred million dollars in the fourth quarter,” he said. Shell is replacing the Kulluk with a leased drill rig, the Polar Pioneer, Henry said. That ship, owned by Transocean, is semi-submersible unit that is nearly square — 279 feet long and 233 feet wide, according to Transocean’s website.

If Shell pursues Chukchi drilling, it will be done with the Noble Discoverer, the leased drill ship that operated in the Chukchi in 2012, said Megan Baldino, Shell’s Anchorage spokeswoman. The company intends to bring the Noble Discoverer back to Alaska, she said. The Polar Pioneer is intended to be the back-up rig available to drill a relief well, in accordance with federal regulations, Baldino said.

Shell has already spent about $5 billion on its Alaska oil-exploration program, but has managed so far to drill only the top portions of two wells, one in the Chukchi and one in the Beaufort. The company was forbidden by federal authorities to drill into oil-bearing zones because a mandatory oil-containment barge failed to pass U.S. Coast Guard tests in time for the 2012 drilling season.

Henry, in the conference call, said that vessel, the Arctic Challenger, now has regulatory clearance, but that all of the two dozen ships in the fleet that Shell would amass for future Chukchi drilling must also pass new regulatory muster.

The new regulatory muster they must pass is still indefinite, as not all investigations into Shell’s botched 2012 efforts have concluded.  They must submit an entirely new exploration plan to the Bureau of Ocean Energy Management, a new marine mammal protection plan to the National Marine Fisheries  Service and U.S. Fish and Wildlife Service, clean air permits from the Environmental Protection Agency, and even more:

Shell must comply with yet-to-be-issued Arctic-specific rules for future oil and gas activities. Those rules are expected to be released by BOEM before the end of the year, and are expected to cover travel to and from the Arctic — as well as any activities by drillers. The rules are being drafted in response to a Department of Interior investigation into the Kulluk grounding and Shell’s other 2012 woes.

And the U.S. Coast Guard Kulluk grounding investigation has not issued its final report.

My gut feeling is that Shell doesn’t really hold out great hopes for 2014 Alaskan waters drilling.  Greenpeace seems to be thinking along the same lines:

Shell’s Arctic bravado is a desperate attempt to reassure its investors, but the facts tell a different story. Brushing off the loss of hundreds of millions of dollars and casually scrapping a drilling platform are not the actions of a company in control of its operations,” Ben Ayliffe, Greenpeace International’s Arctic campaign leader, said in a statement issued hours after Shell’s teleconference.

“In 2012 Shell proved it is completely unfit to drill in the remote Arctic, a place of unrivaled beauty where any spill would be an environmental catastrophe. In April, it signed a joint deal with Russia’s state owned giant Gazprom, one of the world’s most polluting oil companies with a record of serious negligence. Shell has run out of options, and is prepared to gamble its reputation on projects and partnerships that other oil companies have dismissed as far too risky,” Ayliffe said.

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Chances of Shell Oil Drilling in Arctic in 2012 Diminishing by the Hour – Updated

12:06 pm in Uncategorized by EdwardTeller

Shell Oil has already reduced the number of possible exploratory wells to be drilled this season in the Arctic’s Beaufort and Chukchi Seas from eight to three, or possibly two – one in the Beaufort and one in the Chukchi.  Although they have deployed two drilling rigs into the Arctic this season, the drilling itself cannot start until the oil spill containment equipment on the barge Arctic Challenger is on site.

As of Monday, here is a short version of the current status of the Arctic Challenger‘s re-design and testing, in and near Bellingham, Washington:

Coast Guard officials say they’re waiting for Shell to finish nearly 200 items on the barge before they can be inspected. Those include things like electrical and firefighting equipment.

Another 200 items remain to be documented before the Coast Guard will declare the barge seaworthy. Then, after another federal agency tests the Challenger’s oil-vacuuming system, the barge can be towed to the Arctic. Shell says that journey will take two weeks or more.

Shell had planned to begin drilling in July. But delays in construction of the barge have forced the world’s largest oil company to cut back its Arctic drilling plans. Shell only has permission to drill in the brief Arctic summer.

Bowhead whaling season begins in late August. Given the five-week time frame described in the article quoted above, the barge cannot arrive on site until at least the first or second week of September.

Under agreements with Alaska Native bowhead whaling skippers and their organizations, Shell may drill in the Chukchi after the season begins, because the proposed drill holes are far from where the whales are usually hunted.  This is not the case in the Beaufort.  If only one whaling captain objects to Shell’s 2012 Beaufort plans, they will have to suspend or not start drilling.

A photograph surfaced today, showing an interesting construction detail on the stern of the Arctic Challenger.  First off, here is a screen shot from Google Earth I made of the Arctic Challenger, moored in Coos Bay Oregon, before Shell bought it and started modifications:

Arctic Challenger in Coos Bay - early 2012

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Thoughts on Shell Oil’s Arctic Oil Spill Containment Barge, the Arctic Challenger

8:46 pm in Uncategorized by EdwardTeller

Arctic Challenger 1982 color adj.

Above is a drawing I made thirty years ago today.

It was drawn in Chatham Strait in Southeast Alaska, as the Crowley Maritime tugboat Sea Giant towed the Arctic Challenger from Elliot Bay in Seattle to Prudhoe Bay.  At the time, I was working as a deck hand on the Sea Giant.  Below is a drawing I made then of the Sea Giant.

Sea Giant 1982

The Arctic Challenger was built in 1977, to perform as an icebreaking barge during the Sealift operations that saw the construction of the Prudhoe Bay oil production facilities and infrastructure.  Crowley Maritime’s history page notes:

In the late 1970s Crowley added to its fleet the Arctic Challenger, a 310-by-105-foot icebreaker barge

The Arctic Challenger could haul freight, but its main purpose was to plow through the ice between Wainwright and Prudhoe Bay, should ice conditions warrant that.

Sea Giant and Arctic Challenger 1982

Near the bow there was a tall tower from which the “Ice Captain” was supposed to be able to spot leads in the ice, along with the help of spotter aircraft.  In the stern there were two notches.  They were designed to fit the bows of two 7,000 HP-class Crowley tugs.

Although the Arctic Challenger was not needed as an icebreaker in 1982, it had been tried in that role earlier, and was found to be poorly designed.  It didn’t draw a lot of water – 4.1 feet empty – so, after having been broken by the bows,  ice would creep along underneath the hull and ultimately foul the props and rudders of the propelling tugs.  Not good when you’re 3,000 miles from Seattle.

Crew members of towing tugs had been injured over the five years since the barge’s completion, and it was not considered to be a “good luck” barge in fleet scuttlebutt. It never really found a niche after the Sealifts were over.  It languished, being shuttled from Seattle to the Gulf of Mexico to Coos Bay, Oregon, where it stayed for a long time.

A 2008 blog entry by an Oregon blogger erroneously stated that the Arctic Challenger was “being scrapped out.”  I think the boat then being scrapped was an old Bering Sea trawler of the same name, but the blog entry gave a good picture of the barge:

4

KTOO radio recently published a photo that may be confusing or inaccurate.  It shows a vessel which is not the Arctic Challenger overshadowing a barge which may be the Arctic Challenger under reconstruction in Bellingham, Washington:

Billingham-ship-1024x767

The Arctic Challenger is what Shell Oil claims will be their Arctic oil spill response unit.  They are not joking.

Here is an artist’s conception of what it might look like if and when they finish revamping this loser dockside queen:

la-na-nn-arctic-challenger-20120719-001

Essentially, what you see here is a storage shed with really thick walls at the waterline.  It has never been powered, and none of the new articles about construction delays mention it as being anything more than a barge.  So, as an oil spill response vehicle, it is useless unless configured with its tugboat power.

Unless the problems associated with the hull shape have been addressed, what we will probably see when Shell Oil inevitably spills oil in the Chukchi or Beaufort Seas will be a crew urged on by their bosses to go faster, cramming ice under the barge and into the power sources of the tug, fouling and bending the running gear.

Unless the problems associated with the hull shape have been addressed, the vessel should not be certified by the Coast Guard for Shell’s contemplated use.

I don’t think any of the reporters who have covered the Arctic Challenger have looked very closely at the hulk’s history, or interviewed anyone who has ever worked the rig in any of its previous incarnations.

Federal Work Suspension of Leading Arctic Scientist Ended as Investigation of His Investigators Deepens

11:32 am in Uncategorized by EdwardTeller

"polar bear swimming in the middle of the Beaufort Sea"

"polar bear swimming in the middle of the Beaufort Sea" by danielguip on flickr

Anchorage-based wildlife scientist, Dr. Charles Monnett, has been ordered to return to work today:

The polar bear scientist who has spent more than a month suspended from his government job has now been told that he should report back to work on Friday — although NPR has learned that his job is changing and he will no longer manage federal contracts.

“Chuck is planning to go to work. He just doesn’t know what the work is going to be,” says attorney Jeff Ruch of Public Employees for Environmental Responsibility, which is providing legal representation for wildlife biologist Charles Monnett.

In 2006, Monnett published a report on his sightings of apparently drowned polar bears in the Arctic. The dead polar bears became a powerful — and controversial — symbol of the danger of melting ice and climate change.

Monnett was put on administrative leave on July 18 by the agency he works for at the Department of the Interior. The move came as Monnett was being investigated by the department’s Office of Inspector General.

That investigation is ongoing, and it is not clear what aspects of Monnett’s research or management work are still under scrutiny.

Public Employees for Environmental Responsibility (PEER), which has been representing Dr. Monnett throughout his harassment, issued a press release Thursday afternoon, which they have allowed me to print here in full (emphases added): Read the rest of this entry →