Feds reveal details on Shell’s Arctic ambitions

WASHINGTON — More details came to light Tuesday on Shell’s plans for exploratory oil drilling in the Chukchi Sea north of Alaska, as federal regulators released a copy of the company’s broad Arctic drilling blueprint.

Shell filed the document with the Bureau of Ocean Energy Management last month, a milestone in its quest to resume drilling in the region after its previous, attempt two years ago was marred by mishaps.

Shell is aiming to drill up to six wells on separate lease blocks encompassing its Burger prospect in the Chukchi Sea, with work unfolding over several years. It plans to put two rigs to work at the same time drilling separate wells, allowing it to maximize the short window between the time sea ice retreats and begins encroaching again. The tactic also means that a second rig will be relatively close by — rather than a seven-day trek away in Dutch Harbor, Alaska — in case an emergency means it is needed to drill a relief well.

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The two rigs tapped for the job are the Noble Discoverer, a turret-moored self-propelled drillship that Shell employed in the Chukchi Sea in 2012, and Transocean’s Polar Pioneer, a semi-submersible offshore drilling unit that does not have its own propulsion.

“Each drilling rig will serve as the other’s relief-well rig,” according to a bureau summary posted with the plan. “The drilling units will move through the Bering Straits and into the Chukchi Sea on or after July 1 and then onto the Burger prospect as soon as ice and weather conditions allow.”

Shell executives have not made an official decision to plunge forward into those icy waters, but filing the exploratory plan is a necessary step in its quest for federal permits necessary to conduct the work next year.

Timeline

Any final verdict from the company and regulators is many months away, as the ocean energy bureau redoes the environmental analysis that underpinned its 2008 auction of the Chukchi Sea oil leases held by Shell and other firms. A federal court ruled in January that the government’s estimate about potential oil recovery from the waters was flawed, prompting the rewrite.

In posting a version of the exploration plan online Tuesday, the ocean energy bureau confirmed it expects to have a draft of that environmental analysis finished in early October, with a final version released in February and a record of decision codifying the Interior Department’s approach to the sale in March.

The ocean energy bureau said it would launch a formal review of Shell’s exploration plan — and a public comment period on the proposal — after it completes the court-ordered environmental analysis and the Interior Department’s record of decision is issued.

The government’s timeline coincides with Shell’s planning process. Although Shell has already moved some equipment to Barrow, Alaska in preparation, most major deployments — and spending — are tied to mobilizing a fleet of vessels, expected next year.

“It appears agencies and industry are rapidly putting everything in place for Shell to drill this coming summer before we have Arctic standards in place and transparency about how Shell plans to avoid repeating the problems of the 2012 season,” said Marilyn Heiman, director of Pew’s Arctic Program.

Shell has been working to convince regulators that it has made broad changes to better supervise its contractors, from drilling companies to boat operators. Shell spokesman Curtis Smith previously said the new Arctic exploration plan reflects lessons learned from the 2012 operation, with “more emphasis on integrated planning.”

Changes planned

One of those changes is a decision to add an additional helicopter to Shell’s lineup of equipment along Alaska’s north coast. The extra helicopter — along with plans to boost the frequency of crew change flights — is likely to translate into roughly 40 round trips weekly.

In the newest exploration plan, Shell also says it is adding more support vehicles and oil spill response equipment, including three anchor handlers instead of just one. “These adjustments have been made in direct response to Shell’s experiences during the 2012 season, the planned use of a second drilling unit and (new discharge monitoring requirements),” Shell said.

Offshore supply vessels are expected to make nearly twice as many round trips to Shell’s contracted drilling units, according to the plan, though it was not immediately clear why the oil company expects that traffic to climb.

Shell is also outlining ambitions to potentially use remote-operated vehicles to do some work on mudline cellars, holes in the seabed at the site of new wells. The 20-by-40-foot mudline cellars, generally excavated over seven to 10 days before deeper drilling commences, are designed to hold emergency devices known as blowout preventers just below the sea floor, protecting the equipment from moving icebergs.

The remote-operated vehicles might be used to help maintain mudline cellars, keeping them clear of debris.

Narrow drilling window

A typical drilling season, limited by both regulations and ice conditions, could start as early as July 1 and close by Oct. 31. But Shell says even an  “average” Arctic drilling window “is long enough for a drilling unit to drill an exploration well from spud to proposed total depth and possibly construct an additional mudline cellar or drill and secure a partial well.”

“The actual number of wells that will be drilled in a season will depend upon ice conditions and the length of time available in each exploration drilling season,” Shell says.

The company is not tinkering with its approach to managing ice in the remote region, nor its plans for dealing with an oil spill, which regulators previously approved.

Michael LeVine, Pacific senior counsel for the conservation group Oceana, said Shell “is getting ahead of itself.”

“The company should demonstrate it can mobilize its equipment safely, respond effectively to an accident, and comply with the law before it contemplates anything more complicated,” he said. “Shell appears to have learned little from its past experiences and should be considering whether it wants to continue to invest huge sums continuing to try to drill in a place for which it is clearly unprepared.”

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About The Author

Jennifer A. Dlouhy covers energy policy, politics and other issues for The Houston Chronicle and other Hearst Newspapers from Washington, D.C. Previously, she reported on legal affairs for Congressional Quarterly. She also has worked at The Beaumont Enterprise, The San Antonio Express-News and other newspapers. Jennifer enjoys cooking, gardening and hiking. She lives in Washington, D.C., with her husband and toddler son.