Saturday, February 16, 2013

More Thoughts on Shell's Botched 2012 Arctic Season and Their Dismal Chances for 2013

Since Shell announced that both the Kulluk and Noble Discoverer will be "dry towed" to Asia for incredibly costly repairs, there hasn't been a whole lot written in the Alaska press or on Alaska blogs on what this means for Shell's possibility of even having a 2013 season.  The few assessments in, including mine, aren't positive.

The most pessimistic, and perhaps realistic assessment outside of Alaska I've read since the dry tow announcement has been by Michael Eboh, writing for AllAfrica:
James West, an analyst with Barclays Capital, said that aside from the Kulluk, there are only two other rigs able to operate in sea-ice conditions - the Orlan and the SDC Drilling Rig - but neither appears to be available.  
The Orlan is part of drilling and production operations at the massive Exxon Mobil Corp. and OAO Rosneft joint project off Sakhalin Island in Russia.  
Continuing, he said, even if a pair of new rigs was found to do the work they would likely need to undergo modifications for the job, and Shell would have to file amendments to its drilling permits to use the vessels.
Shell is also required to have vessels used in their Alaska Arctic drilling program approved by relevant US agencies.  Which brings to mind a few questions:

1).  As I've previously written, based on Shell's own estimates, the Kulluk and Noble Discoverer may not even make it to Asia shipyard dry docks until mid to late April.  Whether the work will take a few weeks or a couple of months, the vessels will then have to be inspected and recertified by the U.S. Coast Guard and the Bureau of Safety and Environmental Enforcement.

Can that be done in Asia?  I don't know, but seriously doubt it.  So, would Shell then risk bringing them to Alaska upon repair and modification completion for inspection, where some of the work might not be able to be done, or head them to Puget Sound or further south?

All of this eats up time.

2).  The U.S. Department of Interior 60-day review of Shell's 2012 operations, announced on January 8th, is due to be completed before March 10th (emphasis added):
Interior said the review, which will include technical assistance from the U.S. Coast Guard, will identify “challenges and lessons learned.”  
“The review, which is expected to be completed within 60 days, will pay special attention to challenges that Shell encountered in connection with certification of its containment vessel, the Arctic Challenger; the deployment of its containment dome; and operational issues associated with its two drilling rigs, the Noble Discoverer and the Kulluk,” Interior said.  
The review will examine Shell’s safety management, oversight of contractors and ability to meet federal standards for development in the Arctic climate.
There has been remarkably little written about this since the Salazar announcement.  The now outgoing Secretary stated last summer, "I will hold their feet to the fire in terms of making sure that we are doing everything we can to abide by the standards and regulations we have set, and to make sure that the environment and the Arctic seas are protected."

That was before the catastrophic failure of the Arctic Challenger's containment dome, the Noble Discover's USCG impoundment and the Kulluk's grounding.  Will Obama's push to make America "energy independent" trump holding Shell's feet to the fire in the DOI review?  I'm not optimistic.

3).  Senator Begich's Washington D.C. office has told me his hearing or hearings by the U.S. Senate Subcommittee on Oceans, Atmosphere, Fisheries and Coast Guard (which he chairs) will be held in March, but have not provided further details.  If Interior, not wanting to muck up the environment for the Sally Jewell nomination hearings, decides to sit on their review, will Begich have the spine to go out there first, at the same time the damned (I mean the term literally) rigs are exiting the Western hemisphere?  We will see.

4).  What appeared a few months ago to be the weak link in Shell's three-legged special vessel drilling scheme, the Arctic Challenger, hasn't been heard about in a long while.  Has the new, armored containment dome been tested?  We don't know.

5).  The Unified Command has drawn down, disbanded for now.  It may have been premature.  There's a lot of shitty weather possible between now and late April, between Kodiak and Korea.

Her's a video of the Doolittle B-25's, being launched in the area these rigs will be dry towed through in April, on April 18, 1942:

The Hornet, from which the Doolittle raid B-25's were launched, was about the same tonnage as the Kulluk, only more seaworthy.  See how the Hornet almost gets buried at the bow in some late April waves.

Here is an image of how the Kulluk is to be towed to Dutch.  Not looking good:

Here is an image of the USS Cole on an ocean lift vessel like the one the Kulluk and Noble Discoverer will have to mount and safely ride.  The Cole displaces a third of the Kulluk's tonnage:

Here is an image of the same lift vessel, the Blue Marlin, carrying the X-band radar SBX vessel.  This useless boondoggle displaces 50,000 tons, which is almost twice the Kulluk:

Here is an image I took in August 2011, comparing size of the Kulluk to the SBX:

Here is the same situation, shot from a better angle by Shell:

We're a long way from seeing these ill-starred rigs getting to the places they now have to go.

One thing that strikes me about Alaska coverage of all this, is how little Shell has put into Alaska itself in a positive way.  The North Slope and Cook Inlet oil companies that work here all have tried to contribute to organizations and infrastructure in the communities where they work.  I'm fairly cynical about how that relates to their overall Alaska profits, but they have contributed.

What has Shell done?  Not much.

Yet the cost of this one monumental series of fuckups has cost enough to build any number of things here in Alaska:

The new UAA sports complex.

or fund AWAIC for the next five centuries.

or start a program to educate every high school graduate within 250 miles of where Shell will drill for the next 300 years.



Anonymous said...

Yep, fuck Shell. Better start boning up on Conoco Phillips offshore plans for 2014 as well, they're advertising for help on the SoA Alexsys website.

Anonymous said...

Ooops, make that 2013