Arctic project carries Alaska-size challenges

Part 1: Shell navigates obstacles in Arctic drilling; Related story: Inspectors take different approach to curb spills

BARROW, Alaska – Even if Shell strikes oil in the Beaufort and Chukchi seas, it could be at least a dozen years – and billions upon billions of dollars – before a single drop of it arrives at a refinery.

Here, far above the Arctic Circle, there is no network of pipelines snaking along the seabed. There are no deep-water ports. Even docks can be hard to come by.

The entire infrastructure to support offshore development in a hostile climate would have to be built from scratch.

“The big technical challenge in the Arctic is simply the scale of it because there is no infrastructure,” said Charlie Williams, a recently retired chief scientist at Shell who now sits on a federal drilling safety advisory committee. “It’s the sheer scale of putting in all the pipelines and all the platforms and then putting in all the shore bases to support that.”

While exploratory oil drilling in the region is generally done with rigs on floating vessels, year-round production and development drilling likely would be done by rigs on stationary platforms installed directly into the seabed – structures that have never been placed in U.S. Arctic waters before.

Finding oil is just the beginning, noted Pete Slaiby, the Shell Alaska vice president who is spearheading the company’s Arctic venture.

“If we are blessed with development, there’s going to be a huge amount of work,” Slaiby said, noting that includes technological development, government approvals, pipeline construction and far-reaching federally mandated environmental studies.

“It will be, I think, the largest environmental impact statement done in North America,” Slaiby added. As a result, any production “will be at least a decade away, and probably longer in the Chukchi.”

The platforms that operate hundreds of miles out in the temperate Gulf of Mexico are of no use in the Arctic, where sheets of ice dozens of feet thick cover the water for much of the year.

Unlike Shell’s exploratory drilling this summer, which was limited to a brief “open water” season when ice wasn’t covering the sea, a year-round production schedule would demand robust equipment that could withstand icebergs, freezing sea spray and other weather-related threats.

Williams says the industry can draw on experience penetrating other frontier areas and adapt equipment engineered for similarly harsh offshore environments, such as the North Sea, West Africa and ultradeep-water Gulf.

“I actually think we have good solutions to the technical challenges right now,” Williams said. “We spend, in the industry, a lot of time trying to always get better, and we can continue to improve that. But as far as building big, ice-resistant structures that can actually let the ice break around them, and how to bury the pipelines, a lot of development and thought has already been put into that.”

Cleanup technology

Current cleanup methods are geared toward warmer water. Regulators will probably insist on new techniques for dealing with oil spills, including equipment to track the movement of spilled crude trapped under ice, and to clean it up. Monitoring options identified in a joint industry study include using oil-sniffing dogs, aerial surveillance, radar and buoys that could move with frozen crude.

Federal regulators will watch closely, Deputy Interior Secretary David Hayes vowed.

“This is a frontier area we need to be cautious about,” Hayes said. “We are not precluding, obviously, exploration and potentially production, but we recognize the sensitivities associated with the Arctic and the need to proceed with the best science and best technical input” while respecting the subsistence needs of Alaskan Natives who fish and hunt in the same waters.

Production platforms

There are no offshore production platforms in America’s Arctic waters now. While some rigs installed on islands close to the coastline pump oil from Alaska’s outer continental shelf, that approach isn’t feasible in federal waters farther out, such as at Shell’s Chukchi Sea leases roughly 70 miles from land.

Floating production systems commonplace in the Gulf of Mexico also are unworkable, according to a 2008 assessment of Arctic offshore technology conducted for the federal government.

Instead, the most likely Arctic facilities are bottom-founded structures.

‘Brute force’

Shell’s potential production platform design would use a stadium-size base filled with concrete and iron and have an enclosed facility looming high above the water to avoid deadly ice ridges. It would use so-called “brute-force” engineering to withstand first-year new ice that can pile up underwater and multi-year ice, which tends to be made of a stronger, freshwater crystal because salt has migrated out.

Shell spokeswoman Kelly op de Weegh said the structure would weigh at least 100,000 tons and be a multibillion-dollar investment.

ConocoPhillips, which is preparing for its own exploration and possible production in the area, is contemplating hunting for oil using a different structure similar to the jack-up-rigs that dot the Gulf. But ConocoPhillips’ facility would be built to ice-class standards.

Neither design is proven. While oil industry leaders regularly point to the stormy seas and winds of the North Sea as evidence they can design for tough conditions, that area is not prone to the ice that clogs the U.S. Arctic.


Existing Arctic pipelines provide a model of what could link Chukchi and Beaufort Sea wells with facilities on land, probably running across the National Petroleum Reserve-Alaska to connect with the Trans-Alaska Pipeline Station in Prudhoe Bay. Although the pipeline feeding BP’s NorthStar facility on a man-made island six miles from the Alaska coast is a single-wall structure, two more recent Arctic projects use pipe-in-pipe designs that allow room for insulation and an extra barrier against leaks. Those pipelines are generally buried 6 to 9 feet below the seabed.

Duane DeGeer, manager of Arctic projects at the Houston-based design company Intecsea, said research is already under way to discern how deep ice has historically gouged into the seabed of the Chukchi and Beaufort seas, which would dictate how far down a pipeline would have to be buried.

Pipelines also would have to be designed to withstand the possibility of water slipping through cracks in sea ice, eroding the seafloor and exposing buried pipe. And when pipelines make landfall, they would need to be kept underground far enough to clear decades of eroding shoreline to come.

A quick summer

Another challenge would be swiftly installing the pipeline during summer, when waters are clear.

“People have been taking a look at … the different ways to install a pipeline in a single reduced season,” DeGeer said. “You might have a 90-day window but only 30 days or less in which to install a pipeline.”

Once installed, the pipeline would be largely inaccessible, placing a premium on preventing corrosion and detecting even tiny leaks that could send crude weeping out for months before a seep percolates up through the seafloor.

Doing the groundwork

Shell is laying the framework for pipelines and production platforms to come. This summer, even as its two vessel-based drilling rigs were boring the first half of exploration wells in the Beaufort and Chukchi seas, the company employed scientists and engineers surveying an area the size of West Virginia for a possible pipeline route.

Slaiby said the work was designed to build a baseline data set that would help Shell and regulators understand how to navigate wetlands, wildlife habitat and archaeological sites.

As Shell looks ahead to possible Arctic pipelines and production systems, Slaiby said, the company can draw from its experience pushing the boundaries of offshore drilling and setting up pipeline monitoring systems in tough-to-access deep-water locations.

Shell may be especially well positioned for the task. The company prides itself on being an innovator and a leading technology firm, observed Dave Pursell, an analyst with the Houston-based energy investment bank Tudor, Pickering and Holt.

Shell won plaudits for pushing boundaries of ultradeep-water drilling with its 2-year-old Perdido development project 200 miles from the Texas coast, a project that had to withstand not just extreme water depths but also a rugged seafloor and a complex underground reservoir.

Some of the technology used at the site didn’t exist when Shell bought federal drilling leases there in 1996.

“Shell has always had a focus in working offshore and a focus on solving these really big civil engineering challenges,” Williams said.

Although federal regulators would have to approve the design decisions made by Shell or its competitors, there are no Arctic-specific standards that would govern those options.

Engineers, environmentalists and regulators sitting on the Interior Department’s offshore safety advisory committee appear likely to recommend the government impose baseline standards for Arctic offshore drilling, coastal production facilities and pipelines.

High stakes

Environmentalists insist that Arctic standards would help set a floor for protections in this remote and fragile region. They note that while accidents happen everywhere, when they happen above the Arctic Circle – even on land – they’re much more difficult to clean up.

The most recent example of this came in February, during Repsol’s first winter searching for oil in Alaska, when the company hit a pocket of high-pressure gas at one of its North Slope wells, sending drilling muds erupting out of the ground.

Repsol first struggled to thaw several feet of ice encasing portions of the rig and eventually plugged the well about a month later. But new snowfall obscured drilling muds spewed over the tundra and sub-zero temperatures meant some cleanup equipment couldn’t be operated at the time.

‘Gold standard’

Hayes said operations and safeguards in the U.S. Arctic can be a model for the rest of the world.

“We are very interested in being the leading edge here, of being a gold standard for Arctic exploration,” he said. “Because regardless of what happens in the U.S., there is no question there is going to be offshore development … in the other Arctic nations.”