Shell had a lot riding on Arctic rig’s snapped tow lines

Posted on January 11, 2013 at 9:29 am by Loren Steffy in Environment

Salvage teams conduct an assessment of Shell’s Kulluk drill barge on January 9, 2013 in Kodiak Island’s Kiliuda Bay in Alaska (AFP PHOTO / GREENPEACE/ ROBERT MEYERS)

Friday’s column, available at houstonchronicle.com:

For years, Shell Oil Co. claimed that a byzantine regulatory process was impeding its progress in the Arctic. Now, if it gets frozen out of the region, it has no one to blame but itself.

The company had a lot riding on the tow ropes pulling its conical drilling rig across the stormy seas near the Alaskan coast on New Year’s Eve. Shell itself had seven years and almost $5 billion invested in the project, and as the first company allowed to drill in Arctic waters, it carried the burden of not botching the effort for other companies also awaiting permits.

Then, the line snapped, engines on the tugs pulling the rig failed and the 266-foot rig hit the rocks, dashing along with it public confidence that Arctic drilling can be done safely.

The Kulluk grounding handed environmentalists, who have long opposed Arctic drilling, new ammunition in efforts to halt the project. The potential dangers, they argue, will be far greater when oil production begins.

What Shell doesn’t seem to fully appreciate is that to the public, it’s irrelevant whether Shell’s problems involve actual drilling or the maritime operations that support it.

It raises the question: If the company can’t handle basic support operations, how can it handle the technological complexities of actually drilling in such an environment? If it can’t find dependable maritime tow trucks, how can it manage the moon-shot-caliber expertise needed to produce oil safely?

Loren Steffy

Loren Steffy is the business columnist for the Houston Chronicle. His column appears in on Wednesdays, Fridays and Sundays. He is also the author of "Drowning in Oil: BP and the Reckless Pursuit of Profit," and "The Man Who Thought Like a Ship."

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