Salazar cites ‘troubling sense’ about Arctic drilling mishaps

Interior Secretary Ken Salazar said Wednesday he is concerned about the series of blunders surrounding Shell’s recent Arctic drilling and is looking to a government investigation for answers.

“We don’t know what went wrong, and that’s why it’s important that this high-level review occur,” Salazar told reporters. “There is a troubling sense that I have that so many things went wrong.”

Although Salazar stressed that the Obama administration remains committed to Arctic energy development, he stopped short of saying Shell would be able to resume drilling exploratory oil wells in the Chukchi and Beaufort seas this summer.

In announcing the “expedited, high-level assessment” of Shell’s 2012 Arctic drilling program on Tuesday, the Interior Department pledged the probe would be complete within 60 days and would “help inform future permitting processes in the region.”

Shell and the Coast Guard are still inspecting the Kulluk conical drilling unit, which grounded on an uninhabited Alaskan island on New Year’s Eve and has since been towed to a sheltered bay 30 miles away.

“Shell has a lot of business decisions that it is going to have to make on the 2013 season,” Salazar told reporters after he addressed the Ocean Energy Safety Advisory Committee meeting in Washington. “If they don’t meet the permit requirements, we won’t let them go forward.”

Salazar acknowledged that given possible damage to the Kulluk, “it may be that Shell isn’t even ready to move forward in 2013,” but, he added, “we need to make sure than when it does happen, that we do it in a way that is safe and protective of the environment.”

Most of Shell’s mishaps happened while its rigs were traveling to and from U.S. Arctic waters, including the drillship Noble Discoverer’s out-of-control drift near Dutch Harbor, Alaska, last July, the failure of a unique oil spill containment system during a deployment drill last September and the grounding of the Kulluk rig as it traveled to a Seattle shipyard for maintenance.

Randall Luthi, the head of the National Ocean Industries Association, stressed that those incidents were “unrelated to specific offshore drilling operations, which were conducted safely in 2012 under rigorous oversight by the Department of Interior.”

“Lessons learned from all the activities will be incorporated into future operations,” Luthi stressed, “but the Kulluk incident is not a reason to ban offshore energy development in Alaska.”

Shell spokeswoman Kelly op de Weegh said the company believes “a review will demonstrate that the drilling operations went well.”

“We welcome that review, and we fully support an investigation into recent marine transit issues,” op de Weegh said. “It’s too early to speculate on any impacts to our ongoing exploration program. We will first complete an assessment of the Kulluk, but our confidence in the strength of this program remains.”

But environmentalists say the episodes confirm that even routine maritime operations surrounding Arctic drilling are too risky and underscore the need for a slower approach, if not an outright halt to oil exploration in the forbidding, remote region.

Greenpeace media officer Travis Nichols said the assessment had to be “substantial and thorough.”

“Real oversight is long overdue, and in light of Shell’s record so far the only reasonable conclusion is that it is beyond anyone’s capabilities to safely conduct a drilling operation in the Arctic,” Nichols said.

Greenpeace protesters held signs with headlines on the problems that befell Shell’s Arctic program during the ocean energy advisory committee meeting on Wednesday, ending with a giant picture of the grounded Kulluk rig.

“It doesn’t take much examination of Shell Oil’s myriad mistakes and mishaps to realize no oil company can match the Arctic Ocean and the hazards that come with it,” said Chuck Clusen, with the Natural Resources Defense Council, in a blog post Wednesday.

Salazar repeatedly insisted he would not “prejudge” the outcome of the 60-day review of 2012 Arctic drilling operations.

But federal regulators are now considering new Arctic-specific standards to govern drilling rigs, safety devices, pipelines and other equipment used to develop oil in the region, said James Watson, director of the Bureau of Safety and Environmental Enforcement.

“We will have to look at Arctic-specific standards,” Watson said. “We are already paying attention to what is being done elsewhere in the world and what we would learn from our own oversight of what has happened last year.”

Right now, there are no specific mandates governing Arctic oil development. Some critics worry that without those requirements, safeguards Shell voluntarily implemented in 2012 — including a spill-containment device like the systems required for deep-water exploration in the Gulf of Mexico — would not be followed by other oil companies planning Arctic drilling, including ConocoPhillips, Statoil and Repsol.

The offshore advisory committee that was meeting Wednesday is poised to recommend those mandates, as it concludes its first two years of work.

Environmentalists insist that Arctic standards would help set a floor for protections in the fragile region, by possibly requiring ice-capable equipment and specifying how close rigs need to be for drilling relief wells in case of an emergency.

Marilyn Heiman, Arctic Program director with Pew Environment Group, said those standards are absolutely needed if Arctic drilling continues.

“The Obama administration needs to impose Arctic-specific safety, training and spill response standards and ensure the proper precautions are in place before approving any additional drilling,” Heiman said. “Clearly we’re not there yet.”

Shell’s Kulluk conical drilling unit collided with the rocky shore of Alaska’ Sitkalidak Island on Dec. 31, following a five-day battle to tow the unpropelled rig to safe harbor amid 70-mph winds and waves that climbed four-stories high.

Shell had been towing the 266-foot floating rig to a Seattle shipyard two months after it finished boring the first half of an exploratory oil well in the Beaufort Sea. On Monday, salvage teams successfully pulled it to sheltered Kiliuda Bay for further assessments, and on Tuesday, they were planning to send remote-operated vehicles underwater to examine its hull.