Shell wins Coast Guard OK on changes to Arctic-bound barge

The Coast Guard has approved Shell’s request to change the standards for evaluating the readiness of a key emergency response ship that is set to be on hand during planned oil drilling in Arctic waters this summer.

But Shell is still rebounding from two setbacks in its Arctic drilling quest, including an ongoing Coast Guard probe into what caused its Discoverer drillship to drag its anchor and drift toward an island near Dutch Harbor, Alaska last Saturday.

Shell also is awaiting the Environmental Protection Agency’s verdict on whether the company can exceed a federal air permit’s limits on how much ammonia and nitrogen oxide the Discoverer’s main generator engines can emit.

The most recent development affects the Coast Guard’s review of the Arctic Challenger barge still under construction in Bellingham, Wash. The barge is set to carry emergency equipment for containing a runaway subsea well in the event of an accident, and it is slated to be stationed in between Shell’s operations in the Chukchi and Beaufort seas.

Last year, Shell asked the Coast Guard to evaluate the vessel using standards for floating production installations that are anchored in one place for years at a time and must be strong enough to withstand hurricanes and 100-year storms. But earlier this month, Shell asked the Coast Guard to instead vet the Challenger’s anchor system under standards normally used for “mobile offshore drilling units” with less-stringent requirements for riding out storms, since the barge would move to escape approaching bad weather or respond to an oil spill.

Under the MODU classification, Shell had to prove that the Challenger was capable of withstanding a 10-year storm, instead of the once-a-century event.

Coast Guard Cmdr.  Chris O’Neil said Shell requested the change to accommodate a more agile barge mooring system that could “allow repositioning during a response to keep the workers on board out of harm’s way.”

O’Neil said the Coast Guard asked Shell to provide calculations demonstrating the Challenger could comply with standards governing MODUs. While the Coast Guard has accepted Shell’s proposal to grade the Challenger using the 10-year standard, “we do not yet know if the Arctic Challenger can meet that criteria,” O’Neil said.

That doesn’t mean the Challenger is set to sail. Major safety and operational systems are still being installed on the barge and required tests have yet to be conducted. Shell also will have to address Coast Guard-identified deficiencies in the ship’s fire detection and extinguishing systems and prove that the vessel meets minimum safety standards before the Coast Guard will issue a “certificate of inspection.”

“The Coast Guard and ABS are in the process of evaluating the design and inspecting the various systems installed on board to ensure they satisfy accepted safety standards,” O’Neil said.

The Coast Guard has not yet modified a requirement that the Challenger be classed as a floating production installation, and the it is still awaiting a full proposal on classing the vessel from Shell.

Shell spokeswoman Kelly op de Weegh said the company was “pleased with the progress we are making on the containment system.”

“Our priority remains the safety of our people and integrity of the assets we deploy in support of our operations,” she said. “We will ensure the Arctic Challenger is ready to perform perfectly before it departs for Alaska.”

Separately, the Coast Guard has reviewed video footage of the Noble Discoverer drillship that was taken by remote-operated vehicles and divers after it dragged its anchor. Although initial reports said the ship stayed 100 yards away from the shoreline, a photo showed it much closer to land.

Coast Guard Petty Officer David Mosley said the video footage showed no damage, so there’s no definitive proof whether the Discoverer hit ground or not.

Although the ship was held to the seabed by a single anchor on the day of the incident, Shell plans to use an eight-anchor mooring system to keep it above its drilling target in Arctic waters.

An ongoing Coast Guard investigation — which could take weeks to complete — is assessing what caused the ship to drag its anchor and drift toward shore. One possibility is that high winds caused the drillship to start moving, pulling the anchor from the relatively soft sea floor.

“Vessels drag anchor quite often, but they very rarely end up in a major marine casualty,” Mosley noted. “If you’ve got a ship that has a lot of super structure, it could act like a sail on a ship, so in a good wind, it could end up pulling on that more than a small ship or boat in the area.”

Meanwhile, the Environmental Protection Agency is still reviewing Shell’s request for leeway, after the company determined it would not be able to satisfy emission limits for the main generator engines on the Discoverer. Shell officials say the drillship still would stay well within ambient air pollution limits.

Conservationists who already opposed Shell’s Arctic drilling are pleading with the EPA to reject the company’s request.

In a letter to the agency Thursday, a coalition of environmentalists warned that allowing Shell to violate the terms of its permit — and run afoul of the Clean Air Act as a result — “would create a dangerous precedent.”

The group of environmentalists, including the Natural Resources Defense Council, Ocean Conservancy, Oceana and The Wilderness Society, said the EPA should not reward Shell’s last-minute request with leniency now, especially since the company had warnings two years ago that it would not be able to sufficiently curb nitrogen oxide emissions.

“Shell has created an artificial sense of urgency” by not asking for more lenient permit limits earlier, the groups said, adding that the company should not now be allowed to circumvent the permitting process as a result.

“EPA should revoke the permit now, before Shell’s vessels are positioned at the drill site and before operations that necessarily will violate the permit and the (Clean Air) Act commence,” the groups said.

Op de Weegh said Shell has been keeping the EPA informed of the company’s progress.
“Over the last few years, we built and tested various ways to achieve those specific emission standards,” she said. “And, also during that time, we curbed our overall emissions by 90 percent.”

Environmental groups have seized on Shell’s air permit request as evidence the company is breaking its promises to limit its footprint while drilling in the Chukchi and Beaufort seas.

“The closer Shell gets to drilling in the Arctic, the further they backtrack on promises of safety and responsibility,” said Dan Ritzman, the Alaska Program director for the Sierra Club.

Despite the setbacks, Shell is closer than ever to launching drilling, after spending nearly $5 billion and more than seven years preparing for the oil exploration. The Interior Department has signed off on Shell’s broad drilling blueprint for the region and its plans to tackle an oil spill in the Arctic waters. But the Interior Department still must issue permits for individual wells before Shell can begin drilling them.

Environmentalists letter to EPA on Shell’s Chukchi Air Permit Revision Request