New era in Alaska drilling looms


Amid the tangle of towering steel, heavy cranes and overcast skies of Seattle’s busy commercial shipyards, Shell Oil’s massive Kulluk drilling rig is preparing to push off for the Arctic Ocean.

When it does, America’s balance between energy needs and environmental fears will enter a new era. Barring unexpected court or regulatory action, by July the Kulluk will begin drilling exploratory oil wells in the frigid waters off Alaska’s northern coast.

After one of the biggest environmental fights in the U.S. in decades, there is a palpable sense of all-systems-go on the dock. Shell has invested $4 billion leading up to this moment, hoping the new wells will open the tap on an undersea field that could be one of the biggest ever discovered in the U.S. The Obama administration has given all but the final go-ahead, sensing the potential of 500,000 gallons a day of new oil flowing into the trans-Alaska pipeline.


At a nearby slip, the 301-foot Nanuq is also preparing to steam north. Its job will be to contain and clean any oil spills created by the Kulluk or its companion rig, the Discoverer. The question is whether it and several companion vessels are up to the task.

Conservationists fear that a spill in these fragile and forbidding waters, marbled with ice during the spring and fall and shrouded in darkness by winter, could send a deadly pool of oil seeping below that ice -- creating a catastrophe that would make BP’s Deepwater Horizon spill seem like an easy cleanup by comparison.

The Beaufort and Chukchi seas, where the Kulluk is headed, may be so remote few humans will ever see them, but they are the nurseries of the earth.

Tens of thousands of familiar American birds make epic journeys each year to the Arctic to feed and nest. The austere waters nurture food-chain building blocks for whales, walruses, seals and polar bears. Struggling Eskimo communities depend almost completely on these animals for sustenance as winter temperatures plunge to 40 degrees below zero.

Even if it doesn’t spill a drop of oil, Shell’s fleet will release thousands of tons of industrial carbon, nitrogen dioxide and other pollutants into the air every year, adding to levels of toxic chemicals and acid in the northern waters.

“It is beyond the pale of stupidity that in the face of everything that’s happening in the Arctic that we would launch a drilling program,” said Jim Ayers, former director of the Exxon Valdez Trustees Council, who helped review the Deepwater Horizon oil spill in the Gulf of Mexico for the U.S. Coast Guard.


Both Shell and environmentalists are rushing to court for last-minute legal reviews.

But aboard the Nanuq, Shell’s vice president for Alaska operations, Pete Slaiby, is preparing to see the last bureaucratic hurdles in his rear-view mirror. “We’re optimistic we’re going to get there in the next couple of weeks,” he said. “At this point, we are planning on drilling this year unless a federal agency or court action determines we will not.”


Spill preparation

The only full cleanup drill conducted in icy waters off Alaska occurred around a BP near-shore project in 1999 -- and was quickly termed an embarrassing failure. Ice knocked over booms. Collection hoses froze.

Oil industry officials say they’ve had more than 10 years to improve the technology, and Shell has proposed to deploy an entire fleet of heavily equipped response vessels near its rigs, ready to pounce if an accident happens. Yet deep worries remain.

“Most of the spill equipment they have can’t work in the weather we’re talking about,” said Layla Hughes, Arctic representative for the World Wildlife Fund, who recently led reporters on a renegade tour of the Seattle shipyards to view the Kulluk.

“This is a fairly old rig that hasn’t drilled a well in 18 years. It’s been what they call cold-stacked -- frozen in the ice in a little port in the Canadian Arctic,” Hughes said. “Is this what they call the best available technology?”

Slaiby said Shell was accustomed to drilling in formidable latitudes. The Atlantic’s North Sea has bigger waves and wind than do the Beaufort and Chukchi seas, he says, and Alaska’s Cook Inlet has stronger currents.


The company drilled a series of exploration wells in the Beaufort and Chukchi seas beginning in the late 1980s without serious incident.

“What I’ve learned working around the world is everybody wants to think their ocean is the most ferocious and baddest place to work in the world,” he said. “It is serious stuff, but these issues, we’ve tackled as an industry four decades ago.”

The dramatic shrinkage of sea ice has made offshore oil exploration in the Arctic an easier proposition than it once was. Shell believes the July-October window under which it will be allowed to operate in the Beaufort (ending 38 days earlier in the Chukchi) will enable it to drill in a minimum of ice.

The biggest challenge has been fallout from the Deepwater Horizon spill, which pulled the plug on offshore drilling around the country and forced Shell to undergo a major redesign of its drilling and spill-response programs.

The new oil spill plan, approved by the federal government for the Chukchi Sea on Feb. 17 (action on the Beaufort plan is pending), now envisions a flotilla of spill-response vessels, including the Nanuq -- along with its companion vessel, the Aiviq. Other equipment is to be pre-positioned along the northwestern Alaska coast. The centerpiece of the plan is to have already on-scene a sophisticated well-capping stack, of the kind that after a great deal of painful trial and error sealed off the BP blowout.

The company’s engineers say a blowout is unlikely -- Shell will be drilling in less than 150 feet of water, compared with the 5,000 feet in which the Deepwater Horizon operated, and at much lower pressures.


Further, as a result of what was learned in the gulf, regulations governing offshore production are now much more exacting -- with stringent new requirements for blowout preventers, worst-case discharge assessments, engineering oversight and well casing standards.

“We have reorganized in a sensible, rational, responsible way the way offshore drilling is regulated in this country ... and established a very different context for discussion than we would have had two years ago,” said Michael R. Bromwich, who recently stepped down after overhauling the federal Bureau of Ocean Energy Management, Regulation and Enforcement.

“This is never going to be a zero-risk activity. But with as many precautions as have been taken here, it’s not a high-risk activity,” he said in an interview.

On board the Nanuq, Shell officials outlined a plan under which the vessel, in the event of a spill, could cruise through heavy ice and launch 30-foot response vessels from its deck. Oil collected by the Nanuq would be transferred to an ice-ready storage tanker capable of handling 520,000 barrels.


‘Pretty abysmal’

Analysts say the biggest threat could come from oil moving toward shore.

Once ice sets in, shore-based boats may be unable to set sail, and coastal waters in the Beaufort are too shallow for deep-draft boats to approach -- setting up the scenario that critics worry about most: a late-October spill that no one can get to.

Retired Vice Adm. Roger Rufe, who helped prepare the Coast Guard’s review of BP’s Gulf of Mexico disaster, said the United States’ ability to address a spill in icy conditions is “pretty abysmal.”


“I don’t think anybody’s really proven they can clean up a spill very effectively in the ice,” said Rufe, addressing a recent panel on offshore drilling hosted by the Pew Environment Group. “We have never proven anywhere in the world that we’re very good at picking up more than 3 or 4 or 5% of the oil once it’s in the water.”

It’s not a worry-free enterprise, Slaiby admits.

“I will be concerned from the moment we start to the moment we leave,” he said. “I’m paid to be concerned about everything. But we do believe that we have some pretty robust systems that are in place.”