Officials check out drilling rigs slated for Arctic

Alaskan officials on Sunday toured two drilling rigs docked in a Seattle shipyard, as Shell showed off improvements it has made to the vessels that are poised to begin boring exploratory wells in Arctic seas near Alaska within months.

Shell Oil spent $4.2 billion buying drilling rights in the region beginning in 2005 and has since invested billions more trying to overcome regulatory hurdles, environmental concerns and legal challenges to kick off the exploration. But the company is now closer than ever to launching the drilling, with plans on track to sink up to five wells in the Beaufort and Chukchi seas north of Alaska this summer.

The tour on Sunday gave U.S. Sen. Lisa Murkowski and Alaska Gov. Sean Parnell, both Republicans, a look at the drilling rigs before they set sail to open a new frontier in oil exploration. Alaska’s junior senator, Democrat Mark Begich, visited the ice-class vessels in late May.

Parnell said he was impressed by Shell’s readiness to handle a spill in the slushy, remote waters, amid concerns that such a disaster would strain Coast Guard resources and local infrastructure.

“It’s one of the myths … that help is somehow thousands of miles away, when you’ve got a lot of capability there, not only on the prevention side, but also on the spill response side,” Parnell said.

Murkowski said she too was assured Shell would proceed safely. “I think they know as well as anybody that there is no margin for cutting corners,” she said. They will work within the terms of the permits and work within the terms of safety.”

Environmentalists argue that current technology for removing spilled oil out of even calm, warm seas can only sop up a small percentage of the crude, and that the equipment’s success rate could be far worse in the Arctic.

Government auditors warned in a March report that icy conditions, dark winter days and a lack of infrastructure could hinder efforts to clean up any spill in the region, even if a damaged well were swiftly capped.

The result, conservationists say, could be irrevocable harm to the pristine and fragile Arctic ecosystem, with more damage than caused in 1989 when the Exxon Valdez tanker ran aground near Prince William Sound, some 800 miles south of Shell’s planned drilling.

“If there is a spill in the Arctic, the oil and damage will almost certainly degrade slower and last longer,” said former University of Alaska marine conservation professor Richard Steiner.

But Shell convinced Interior Department regulators to sign off on its plans for responding to spills in the Chukchi and Beaufort seas earlier this year.

It also has won essential clean air permits for the 18-vessel flotilla that will be supporting its two rigs in the Arctic waters, and a federal appeals court just endorsed the government’s approval of Shell’s broad exploratory plan for the region. The company now has secured all but a handful of drilling permits for specific wells and required animal harassment authorizations, and has so far withstood the scrutiny of federal regulators who stepped up their oversight in the wake of the 2010 Gulf oil spill.

But Shell’s aspirations to drill up to three Chukchi and two Beaufort wells this summer might still be overly optimistic, even if the company gets all of its federal authorizations and withstands any last-minute legal scrutiny.

That’s because there’s one element not even Shell can control: Mother Nature.

And this year, she’s sent more ice into the region, crowding shores with thick layers unlike any seen in a decade or more.

“There’s heavier winter ice, and then there is multi-year ice, more ice than we’ve seen in a dozen years,” said Pete Slaiby, Shell’s vice president of Alaska operations. “We are waiting for that sea ice to significantly break up.”

The weather conditions could force Shell to delay the start of its planned exploration by at least two weeks, cutting in to an already curtailed drilling season.

Under federal regulations, the company has to stop drilling in hydrocarbon zones by Oct. 31 in the Beaufort Sea; regulators are requiring that work to end 38 days earlier in the Chukchi Sea.

In a concession to native Alaskans, Shell also has agreed to halt work — and move out of the way for about two weeks — when bowhead whales migrate through the region, so whalers have a chance to bring down the mammals that supply their families and villages with food.

On Sunday, Murkowski said drillers need to be “mindful” and resist the temptation to move too swiftly, despite the compressed time frame.

“Obviously, there are a lot of expectations. People have been waiting for quite some time for Shell to be able to proceed, and I think we are all very hopeful that Shell will be able to prove some very good things,” Murkowski said. “But we are all very cognizant they are working within some time parameters.”

Shell plans on using two ice-class vessels to drill its Beaufort and Chukchi wells. Destined for Shell’s Sivulliq prospect in the Beaufort Sea is the Kulluk — a nearly 30-year-old conical drilling unit that previously spent more than a decade mothballed in cold storage frozen into ice in Canadian waters.

Shell plans to use the Noble Discoverer — a former log carrier built more than five decades ago — to drill in its Berger prospect in the Chukchi sea.

Shell said it spent more than $480 million on technical upgrades to the two vessels. That included adding new engines, installing exhaust systems to restrain emissions and removing all traces of diesel fuel more polluting than the ultra-low sulphur diesel Shell has committed to using in the region.

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