More trouble for Shell in Alaska as oil rig runs aground

2013 has not gotten off to an auspicious start for Shell. Its oil rig, the Kulluk, has run aground with hundreds of thousands of gallons of fuel and oil on board. On Monday night, two of Shell’s ships, the Aiviq and the Alert, were towing the Kulluk near the coast of Kodiak Island in southern Alaska towards Seattle when the rig became detached.

The rig had already been separated four times over the past few days due to stormy weather and rough seas, with swells of up to thirty-five feet and sixty-mile per hour winds battering the rig and its four support vessels, the Aiviq, Nanuq, Guardsman and Alert. Despite attempts to tandem tow the rig, it still could not be controlled. On Saturday, the U.S. Coast Guard decided to evacuate the 18 crew members on board. After the Kulluk became detached for the first time, Shell and the Coast Guard attempted to reconnect the towlines, only for the oil rig to become separated again and again. After the fifth and final time, the Kulluk ran aground on Sitkalidak Island, near Kodiak Island.

According to the New York Times, the rig is carrying 139,000 gallons of diesel fuel and 12,000 gallons of lubricating oil. This is relatively small compared to the amount carried by the Exxon Valdez when it ran aground not too far from the site of the Kulluk grounding in 1989, as it had 53.1 million gallons of oil on board. Still, even a small oil spill could prove highly damaging. Anchorage Daily News, which is offering the best coverage on the incident as it unfolds, reports that there are several salmon streams and three endangered species that inhabit the waters around Sitkalidak Island: Steller sea lions, Steller’s eiders and southwest sea otters. A Coast Guard helicopter flew over the site of the disaster, and officials from Shell, the Coast Guard, and the Alaska Department of Environmental Conservation reported that “the rig appeared intact and there was no sign that any of the fuel, hydraulic fluid or other petroleum liquids on board had spilled.”

Coast Guard Commander Shane Montoya, in charge of the response task force, stated, “We are now entering into the salvage and possible spill-response phase of this event.” Shell’s emergency incident commander, Susan Childs, stated during a press conference that the Kulluk’s unique construction encases the diesel fuel in heavy steel tanks at the center of the ship, implying that the risk of a spill would be lower. The rig also has an ice-strengthened hull. Still, the seas can be a monster to contend with, especially as the rig is being battered near the rocky island shore. Shell is providing frequent updates about the Kulluk grounding on its website.

Senator Lisa Murkowski (R-Alaska), a staunch supporter of drilling in her state, visited the Unified Command post that has been established to respond to the Kulluk disaster. She has not yet issued an official statement, but Coast Guard Rear Admiral Thomas Ostebo observed, “Senator Murkowski shares the Coast Guard desire to protect the pristine Alaskan environment and response personnel.” It’s ironic – and a sad twist of fate – to note that only six months ago, she visited the rig at it was docked in Seattle and tweeted, “Impressive tour of the Kulluk today, before it heads ‘North to the Future’ & a new era in American energy.”

Others in Congress had more opinionated reactions to the rig’s grounding. Representative Ed Markey (D-Mass.), who is also the Ranking Member of the House Natural Resources Committee, is one of the officials in Congress leading the opposition to Shell’s Arctic drilling program. He plans to run for Senator John Kerry’s seat once he vacates it to become Secretary of State. Markey issued a statement regarding the Kulluk, saying, “Oil companies keep saying they can conquer the Arctic, but the Arctic keeps disagreeing with the oil companies…Drilling expansion could prove disastrous for this sensitive environment.” In early December, he also wrote a letter to Secretary of the Interior Ken Salazar asking harsh questions after one of Shell’s containment domes massively failed during testing. Should Markey be elevated to the position of senator, that might create a more vocal and visible challenge to Shell in the Arctic. Markey is right to seriously question the safety of Shell’s endeavors. The company is fortunate that the Kulluk was not carrying more oil on board, as that could have resulted in a major ecological disaster. The multiple failures and accidents Shell has experienced in the few months it has spent engaged in drilling-related activities in the Arctic are a warning sign that the company is not yet ready to drill up north, and perhaps never may be. Furthermore, it’s important to note that the storm was not anything unusual. Rough weather is typical across the Arctic in winter. For instance, just over one year ago, the Russian oil rig, the Kolskaya, capsized while being towed near Sakhalin, killing 53 of the 67 crew members on board.

Shell has now spent close to five billion dollars in the Arctic without generating a barrel of oil. Curtis Smith, Shell Alaska’s spokesperson, said earlier this year, “We’re spending billions of dollars now for the right to spend tens of billions of dollars more.” Shell believes that the chances of striking oil in one of its wells is high, but the costs – and bad publicity – might eventually stack high enough to deter the company from further pursuing its northern exploits. The salvaging of the $290 million Kulluk, and the money the company will have to spend to clean up its image, will further add to its Arctic expenses. In a way, then, each setback Shell encounters in the Arctic is a victory for greens, so long as the setbacks are not actually damaging the environment.

News Links

“What Shell’s Kulluk Oil Rig Accident Means for Arctic Drilling,” Popular Mechanics