Shell concludes inaugural Arctic drilling season

Shell on Wednesday was wrapping up its high-profile season drilling in U.S. Arctic waters, having punched two holes underneath the Chukchi and Beaufort Sea in search of oil.

The company’s Kulluk drilling unit was in the final stages of demobilizing from its location in the Beaufort Sea north of Alaska on Wednesday, while the drillship Noble Discoverer had begun sailing south from its Chukchi Sea well roughly 70 miles from the coast.

Neither well was finished; instead, Shell plans to return to the sites next year in hopes of boring into potential oil- and gas-bearing zones below the current stopping point about 1,500 feet below the sea floor.

Shell Oil Co., celebrated the end of its Arctic operations as proving that the company can “drill safely and responsibly in the Arctic.”

“The work we accomplished in drilling the top portions of the Burger A well in the Chukchi Sea and the Sivulliq well in the Beaufort Sea will go a long way in positioning Shell for another successful drilling program in 2013,” the company said in a statement. “This year, we had both rigs drilling in theater at the same time, moved closer to the objective, and learned a tremendous amount.”

Some of those lessons were hard-won.

Early this summer, at the start of a narrow window for exploratory drilling in the region, thick sea ice clinging to Alaska’s shores prevented Shell’s ships from cruising to the drill sites.

Then, the Discoverer dragged its anchors and briefly floated out of control near Dutch Harbor, Alaska — an episode that provided fodder to environmental critics closely watching Shell’s work.

Later, Shell confessed it couldn’t satisfy some terms of an EPA-issued air pollution permit governing the Discoverer.

And finally, the company’s first-of-its-kind oil spill containment barge was damaged during certification tests following months of construction delays. That system ultimately won Coast Guard certification earlier this month — but it was too late to make it to Shell’s drilling operations and allow the company to try drilling down into potential hydrocarbon-bearing zones.

“Despite almost unlimited resources and government agencies willing to bend over backwards for the company, Shell was still derailed by an obvious lack of preparedness,” said Mike LeVine, Pacific senior counsel for Oceana.

Conservationists say an oil spill in the region could irrevocably damage the pristine and fragile Arctic ecosystem, with environmental effects eclipsing those caused in 1989, when the Exxon Valdez tanker ran aground near Prince William Sound, some 800 miles south of Shell’s planned drilling.

Oil companies bored 30 exploratory wells in the Beaufort Sea and another five in the Chukchi Sea between 1982 and 1997, but Shell’s work this summer may signal a new Arctic oil rush. Other companies waiting in the wings with leases in the Chukchi and Beaufort Seas include Repsol and ConocoPhillips.

Statoil officials recently said the company would wait until 2015 at the earliest to pursue drilling on its own Chukchi Sea leases, largely to watch Shell’s progress and its interaction with federal regulators that oversee offshore drilling.

Shell said it intends to begin drilling as soon as federal regulators allow next year.

It will be able to get a head start by reattaching the Kulluk and Discoverer to anchors it is leaving in the sea floor, at the site of the new, temporarily abandoned wells.

In a statement Wednesday, Shell praised a White House effort to coordinate permitting of offshore development in the Arctic — echoing testimony Shell Alaska Vice President Pete Slaiby delivered at a Senate subcommittee hearing in Anchorage earlier this month.

The process, Slaiby said, has become smoother and more coordinated as a result of a working group authorized by President Barack Obama and headed by Deputy Interior Secretary David Hayes.

The U.S. Geological Survey estimates that the area north of the Arctic Circle contains 90 billion barrels of technically recoverable oil, with nearly a third of them under the American continental shelf.