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Coast Guard Report Shows Shell Failed to Recognize Risk in the Arctic

Posted On April 4, 2014 by

Photo: Coast Guard

This past Thursday, the U.S. Coast Guard released a report on its investigation into the grounding of Shell’s Arctic drilling rig Kulluk near Kodiak, Alaska on December 31, 2012. A tug lost control of the Kulluk in heavy weather on the way to Seattle after Shell’s failed attempt to drill for oil in the Arctic Ocean in 2012.

The Coast Guard report provides a detailed account of the events before the Kulluk ran aground and identifies a number of causal factors, including lack of experience in Alaska waters, failure to recognize risks, use of inadequate equipment, insufficient planning and preparedness and major problems with the primary towing vessel.

Were there other factors at play? Shell was in a hurry to get its oil rig out of Alaska waters before the end of the year to avoid the possibility a paying taxes to the State of Alaska if the rig remained in Alaska on January 1. The Coast Guard report also found evidence to suggest that Shell’s contractors may have failed to comply with certain legal or regulatory standards and may have committed acts of negligence.

According to the Coast Guard report, Shell’s contractors knew that conditions would be challenging. In an email, the tug’s master wrote: “To be blunt I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an ass kicking.”

Despite these concerns, the towing operation continued. Trouble started when the Kulluk’s towline gave way on December 27. As the situation grew more dangerous, the Coast Guard rescued the 18-member crew of the Kulluk. Although Shell and the Coast Guard made multiple attempts to regain control of the Kulluk, they were ultimately unsuccessful. Late in the day on December 31, the drilling rig ran aground on Sitkalidak Island near Kodiak, Alaska. Fortunately, salvage crews were able to pluck the Kulluk off the shore on January 6 and tow it to a safe harbor. Thankfully, there was no loss of life or major injuries, and the environmental damage was relatively minimal.

How did this happen? Why was one of the world’s biggest oil and gas companies unable to carry out a routine towing operation safely? The Coast Guard’s investigation cites a number of causal factors, including:

Lack of experience in Alaska waters: Shell’s contractors lacked experience in the Gulf of Alaska waters, especially in the wintertime. This inexperience manifested as an inability to reduce stress on the towline in an effective manner.

Failure to recognize risk: Shell and its contractors “did not recognize the overall risks involved prior to commencement of the tow,” and did not conduct a formal risk assessment.

Inadequate equipment: Shell and its contractors selected and used towing equipment that was not sufficient for the rough conditions that they encountered.

Insufficient planning and preparedness: Shell’s towing plans “were not adequate for the winter towing operation across the Gulf of Alaska,” and were “not adequately reviewed,” and “lacked proper contingency planning.”

Problems with the primary towing vessel: Shell relied on the Aiviq—a purpose-built tug—as its primary towing vessel. But, according to the Coast Guard report, the Aiviq was plagued by design flaws and suffered from preexisting engine problems.

As I’ve written before, we need to make meaningful changes in the way that government agencies plan for and manage oil and gas operations in the Arctic. Fortunately, we’re starting to see some progress on that front.

Unfortunately, there’s bad news, too: the Department of the Interior’s Bureau of Ocean Energy Management is considering selling another round of oil and gas leases in the Chukchi Sea—a move in exactly the wrong direction, especially after a court recently found fault with the agency’s analysis of its last lease sale. Join me in telling the Bureau of Ocean Energy Management to call a halt to this potential Chukchi Sea lease sale. Please sign our petition today