Shell on ice: Arctic drilling scheme in trouble

Just a short update on the Shell Arctic drilling fiasco that I wrote about here last week. It’s beginning to look as if the federal authorities who greenlighted this risky scheme are having second thoughts:

WASHINGTON — The Interior Department on Tuesday opened an urgent review of Arctic offshore drilling operations after a series of blunders and accidents involving Shell Oil’s drill ships and support equipment, culminating in the grounding of one of its drilling vessels last week off the coast of Alaska.

Officials said the new assessment by federal regulators could halt or scale back Shell’s program to open Alaska’s Arctic waters to oil exploration, a $4.5 billion effort that has been plagued by equipment failures, legal delays, mismanagement and bad weather.

Interior Secretary Ken Salazar said that the expedited review, which is to be completed within 60 days, was prompted by accidents and equipment problems aboard Shell’s two Arctic drilling rigs, the Kulluk and the Noble Discoverer, as well as the Arctic Challenger, a vessel designed to respond to a potential well blowout and oil spill.

In addition, the Coast Guard announced Tuesday that it would conduct a comprehensive marine casualty investigation of the grounding of the Kulluk on Dec. 31. Shell’s repeated and early misadventures have confirmed the fears of Arctic drilling critics, who said that the company and its federal partners had not shown that they had the equipment, skill or experience to cope with the unforgiving environment there.

As noted earlier, it would be best if the feds forced Shell to drop its Arctic offshore drilling plan altogether. The brutal conditions off Alaska would make such a venture risky under the best of circumstances, but Shell’s foolish actions have compounded the problem

On New Year’s Eve, in the middle of a storm, Shell was trying to tow its Kulluk drilling rig from Alaska to Seattle. Why then? Why risk the bad weather, which, as it turned out, caused the rig to break free from its tugboats and run aground on Kodiak Island?

To avoid paying state taxes, of course. From Alaska Dispatch:

A Shell spokesman last week confirmed an Unalaska elected official’s claim that the Dec. 21 departure of the Kulluk from Unalaska/Dutch Harbor involved taxation.

City councilor David Gregory said Shell would pay between $6 million and $7 million in state taxes if the Kulluk was still in Alaska on Jan. 1.

That’s appalling. And it’s one more reason why Shell’s not-so-excellent Alaskan adventure needs to end.

To find out more about the Interior Department investigation of Shell’s Arctic drilling, please read: http://www.nytimes.com/2013/01/09/us/arctic-drilling-to-be-reviewed-in-light-of-accidents.html

To read more from Grist about Shell’s effort to elude taxes, please read: http://grist.org/news/surprise-shells-rig-ran-aground-in-alaska-because-the-company-was-trying-to-avoid-taxes/

To read my Jan. 3 post about the grounding of the Kulluk, take a look at: http://www.stuarthsmith.com/shells-arctic-drilling-is-what-everyone-feared-an-unmitigated-disaster/

To read my blog post from Sept. 20 about earlier problems with Shell’s Arctic drilling please check out: http://www.stuarthsmith.com/a-temporary-reprieve-from-shells-risky-and-reckless-arctic-drilling-scheme/

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