by Kiley Kroh and Michael Conathan
This week’s grounding of Shell’s enormous Kulluk drilling rig near Kodiak Island, Alaska has not inspired confidence in its preparedness to drill for oil in the Arctic Ocean.
The rig was being towed from Dutch Harbor, Alaska to Seattle when its tow vessel lost control of the massive platform during a harsh winter storm. After numerous attempts to secure the equipment failed, it settled near the shore of uninhabited Sitkalidak Island in the western Gulf of Alaska on Monday night and remains there – with nearly 150,000 gallons of fuel and other fluids on board. The Coast Guard is coordinating a 500-plus person response to assess the damage, but neither they nor Shell has any idea when or how they will regain control of the foundering giant.
Adding insult to injury, on Thursday, the Alaska Dispatch reported that the reason Shell was working so feverishly to move the rig in such harsh conditions was to avoid paying millions of dollars in state taxes it would have owed if the rig was still in Alaska waters on January 1.
Far from an isolated incident, the latest fiasco is just the most recent in a litany of technical failures and struggles with Mother Nature that continue to accentuate Shell’s lack of preparedness to operate in the region. As Christopher Helman writes in Forbes, “It would be a comedy of errors, if the stakes weren’t so high.”
Each of these mishaps, warnings and troubling revelations would individually be reason for pause. Taken together, they offer overwhelming evidence that the oil and gas industry is not prepared for the enormous challenge and incalculable risk of offshore drilling in the remote and volatile Arctic Ocean. Exploiting Arctic offshore reserves is not an imperative and, in fact, is an absurd response to the devastating effects of climate change that are enabling offshore drilling in the first place. Despite investing more than $5 billion into an Arctic venture that includes top-notch crews and state-of-the-art equipment, Shell has stumbled every step of the way.
Here is a look back at some of the major mishaps Shell incurred and warnings they received during 2012: