On Jan. 30, Shell Oil announced that it has postponed plans to drill for oil in the Chukchi Sea off the northwest coast of Alaska in 2014. Shell’s decision followed a recent court decision that threw into question the status of Shell’s offshore oil leases in the Chukchi Sea—but other factors are at play, too.
As explained in my previous blog post, a panel of the 9th U.S. Circuit Court of Appeals recently ruled that an environmental analysis associated with the 2008 Chukchi Sea lease sale was faulty. Under the court’s decision, the Bureau of Ocean Energy Management will have to revisit that environmental analysis, and then decide whether to affirm its 2008 decision to sell the offshore leases. In the wake of the court ruling, Shell’s new CEO announced that the company is “not prepared to commit further resources for drilling in Alaska in 2014.”
Just before the government shutdown brought federal agencies to a standstill at the beginning of October, the Bureau of Ocean Energy Management (BOEM) issued a “call for information” for a potential new oil and gas lease sale in the Chukchi Sea off the coast of northwest Alaska. A new Chukchi Sea lease sale would allow oil and gas companies to buy additional oil leases in one of the most remote and challenging environments on the planet. The response to the call for information is easy: now is not the time to sell new oil and gas lease sales in the Chukchi Sea.
The last oil and gas lease sale in the Chukchi Sea was in 2008. Since that time, the Deepwater Horizon oil disaster in the Gulf of Mexico reminded the world that when things go wrong, offshore drilling can have catastrophic consequences for fish and wildlife, marine and coastal environments, and residents of affected coastal communities. The Deepwater Horizon disaster also triggered new safety and environmental protection requirements for oil and gas companies that wish to drill in Arctic waters.
Two years after the Deepwater Horizon disaster, Royal Dutch Shell tried its hand at drilling in the Arctic and experienced a whole series of disasters. Among other things, a massive ice floe blocked access to one drilling site for about two weeks, the company’s drilling vessels violated their air emission permits, the drillship Discoverer suffered propulsion problems and had to be towed to port, and the drilling unit Kulluk ran aground off Kodiak Island and had to be salvaged by outside consultants. For all that, Shell failed to complete a single Arctic well.
What a difference a year makes. Last year at this time, Shell Oil had a fleet of vessels in the Arctic Ocean in an attempt to drill for oil off the north and northwest coasts of Alaska. But Shell’s 2012 season was plagued by mishaps and mistakes, from the near-grounding of the drillship Noble Discoverer last July to the all-too-real grounding of the drilling unit Kulluk on New Year’s Day this year.
In the end, Shell failed to complete a single Arctic well, and both the Noble Discoverer and Kulluk were so badly damaged that they were towed to Asia for repair earlier this year. In fact, the EPA just fined Shell $1.1 million for unauthorized levels of air pollution from the two vessels — yet another reminder that Shell was not prepared for its Arctic operations.
“Shell screwed up in 2012.” Interior Secretary Ken Salazar was bluntly accurate when speaking about Shell’s calamitous Arctic drilling program today.
The Interior Department’s new high-level, 60-day review – while not comprehensive – calls attention to serious shortcomings in Shell’s 2012 effort and recommends a more thorough, integrated approach to planning and oversight before deciding on whether to approve future Arctic drilling operations.
The review confirms what we already knew: that Shell simply was not ready to conduct safe and responsible operations in icy Arctic waters. It also demonstrates that federal agencies need to do a better job holding the oil industry accountable and setting higher standards for safety and environmental protection.
Today, after months of speculation and countless questions regarding their Arctic drilling operations, and on International Polar Bear Day, Shell announced that it would suspend its attempts at further oil exploration in the Arctic for 2013. Given Shell’s performance over the past year, their decision to pause drilling for 2013 is one of the smartest moves they’ve made regarding Arctic operations. Shell has clearly demonstrated that the company is not prepared to conduct safe and responsible operations in icy Arctic waters. We need a time-out on Arctic drilling until we have improved our understanding of the Arctic ecosystem, protected important ecological and subsistence areas and developed effective methods to clean up an oil spill in icy Arctic water
This announcement came after a long season of other mishaps and missteps, followed by continuing troubles in Alaska throughout the winter. Shell’s Kulluk drilling unit ran aground near Kodiak Island in December after Shell lost control of the vessel while attempting to tow it in stormy seas. At roughly the same time, sources in the media reported that Shell’s other Arctic drillship, the Noble Discoverer, suffered a series of significant problems with propulsion, safety and pollution prevention systems.
Two weeks ago, Shell announced that it would tow both of its beleaguered Arctic drilling units to Asia for repair. As Shell prepared to tow the Kulluk, the tugboats assigned to the task wound up crashing into each other.
Shell’s failures during 2012 season demonstrate clearly that the company is not prepared to conduct safe and responsible operations in icy Arctic waters. Secretary of the Interior Ken Salazar initiated a high-level review of Shell’s operations and activities in 2012. We’re urging that the review be transparent, objective, and comprehensive. An honest assessment of Shell’s failures and missteps will show that Shell wasn’t ready for the challenge of operating in the Arctic. And it will also show that the federal regulators who gave Shell the green light need to hold Arctic operators to a much higher standard.
The Department of the Interior plans to release its review in early March. In the meantime, let’s not allow Shell—or any other oil and gas company—to gamble with the health of the Arctic Ocean.
For years, Shell has tried to carry out a risky plan to drill for oil in the Arctic Ocean. This summer, it looked like Shell would finally get its wish.
In June, Secretary of the Interior Ken Salazar said that it was “highly likely” that the federal government would issue the permits Shell needs to conduct Arctic drilling operations. Later, Secretary Salazar told the New York Times that he would decide no later than August 15 whether to allow Shell to conduct exploration drilling in the Arctic this summer.
August 15 came and went, and there was no decision from Secretary Salazar. Why the delay? The delay comes because, as Ocean Conservancy and others have stated repeatedly, Shell is not ready to drill.
Despite having years to prepare, Shell has been unable to complete a series of required modifications to its oil spill containment barge. The barge, the Arctic Challenger,is an integral part of Shell’s oil spill response plan for the Arctic Ocean. But the vessel is currently undergoing modifications in Bellingham, Washington—far from the Arctic.