Obama administration to review Shell’s beleaguered Arctic operations

McClatchy NewspapersJanuary 8, 2013 

Shell Arctic Drill Ship

This aerial photo shows a U.S. Army CH-47 Chinook helicopter sling a trailer aboard the Shell floating drill rig, Kulluk, in Kodiak Island, Alaska's Kiliuda Bay.

JAMES BROOKS — Kodiak Daily Mirror/AP

— The Obama administration is launching a fast-track review of Shell’s troubled Arctic drilling efforts in the wake of a grounded drilling rig, a failed spill equipment test and other problems.

But the administration made clear Tuesday that despite all the struggles it still supports the controversial push to explore for oil in the waters off Alaska. “The administration is fully committed to exploring for potential energy resources in frontier areas such as the Arctic,” Interior Secretary Ken Salazar said.

The Interior Department will do an “expedited, high-level assessment,” with a focus on Shell’s numerous challenges, Salazar said in a written statement Tuesday. He said it will be led by Bureau of Ocean Energy Management Director Tommy Beaudreau and completed within 60 days.

“Exploration allows us to better comprehend the true scope of our resources in the Arctic and to more fully understand the nature of the risks and benefits of development in this region, but we also recognize that the unique challenges posed by the Arctic environment demand an even higher level of scrutiny,” Salazar said.

Shell’s drilling rig Kulluk broke free from its towline and was grounded for several days before being hauled off the rocks Sunday. Shell’s other drilling rig, the Noble Discoverer, has had safety and pollution issues and is the subject of an investigation. And in September, the spill containment dome on Shell’s response barge, the Arctic Challenger, was, according to an internal email by a federal regulator, “crushed like a beer can” during testing off Washington state.

Shell spokesman Curtis Smith said Tuesday that the company welcomes the Interior Department’s review. He said it would help Shell strengthen its efforts.

“While we completed our drilling operations off the North Slope safely and in accordance with robust permitting and regulatory standards, we nevertheless experienced challenges in supporting the program, especially in moving our rigs to and from the theater of operations,” Smith said.

Environmental groups are calling for the Obama administration to immediately suspend Arctic drilling efforts.

“A government review is appropriate, but it doesn’t take much examination of Shell Oil’s myriad mistakes and mishaps to realize that no oil company can match the Arctic Ocean and the hazards that come with it,” Chuck Clusen of the Natural Resources Defense Council said Tuesday.

The Coast Guard, meanwhile, said it will lead its own investigation into the grounding of the drilling rig. That’s expected to take several months. Alaska Democratic Sen. Mark Begich, a supporter of offshore Arctic drilling, announced he plans to hold a hearing “at an appropriate date” into the failed towing of the drill rig and its grounding.

The vessel that was towing the rig is owned and run by the politically connected Louisiana company Edison Chouest Offshore, a Shell contractor. Edison Chouest was among the top donors to Begich and was the top contributor to Alaska Republicans Sen. Lisa Murkowski and Rep. Don Young in the most recent election cycle.

The Obama administration this summer let Shell begin preparatory drilling in Alaska’s Arctic waters, the first company to do so in two decades. Shell hopes to get permission to drill deeper this year into geologic zones that contain oil.

Email: scockerham@mcclatchydc.com; Twitter: @seancockerham

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