Royal Dutch Shell drilling rig Kulluk aground off Alaska 1/2/13. Image: U.S. Coast Guard
Kiley Kroh and Howard Marano via CAP.
In order to avoid the catastrophic consequences of climate change, enormous fossil-fuel reserves will need to remain in the ground untouched.
2012 was supposed to be a banner year for Royal Dutch Shell, as the company planned to embark on the first Arctic offshore exploratory drilling activity in decades and set itself up to make billions of dollars prospecting for oil in the far-flung region off Alaska’s North Slope. But that’s not how things turned out.
Instead, beginning with efforts to prepare for operations, the company experienced one setback after another. Shell struggled to meet the government’s safety requirements for its oil spill response equipment, experiencing multiple technical failures and permit violations. Mother Nature weighed in and kept the drilling sites choked with sea ice. Yet despite these setbacks and others, Shell received permits from the federal government in August to begin preparatory drilling, albeit not deep enough to actually strike oil in Alaska’s Beaufort and Chukchi Seas.
The coup de grace came on New Year’s Eve when Shell’s Kulluk rig ran aground near Kodiak, Alaska — a fiasco that required a 500-plus person response effort, led by the Coast Guard, working for more than a week in dangerous conditions to secure the rig. This final calamity prompted the Obama administration to launch a high-level 60-day review of Shell’s entire Arctic drilling program, and after assessing its equipment and determining that both Arctic drilling rigs were too damaged to operate in 2012, caused Shell to announce on February 27 that it would not seek to drill in the remote and challenging region in 2013.
In presenting the results of the Department of the Interior’s review on March 14, outgoing Secretary of the Interior Ken Salazar admitted, “The government still has a lot to learn. The Arctic is a very difficult environment to operate in. … Shell is one of the most resource-capable companies in the world (and) they encountered a whole host of problems in trying to operate up there.” The review concluded that Shell would have to develop a “comprehensive plan” for its operations before it would be allowed to move forward. This begs the question: What exactly did the permit process consist of before all these mishaps?
Shell spent seven years and an estimated $5 billion getting ready for its chance to tap the reserves of fossil fuels thought to be stashed beneath the Arctic seabed, and the result was irrefutably a failure. Neither the oil and gas industry nor its regulators are adequately prepared for Arctic offshore drilling operations.
Furthermore, climate change is already wreaking havoc in the region, melting it at an alarming rate and setting off a domino effect that will ripple through the entire global system. The trends so plainly on display in the Arctic are merely a preview of what awaits the rest of the planet if serious action isn’t taken soon to aggressively curb our carbon emissions. If we allow corporate interests to tap the reserves of additional fossil fuels that have been exposed by the rapid onset of global climate change, we’re missing the clear message about the future of our environment on a planetary scale. Slowing the devastating steamroll of climate change requires slashing the amount of greenhouse gases we put into the atmosphere, not opening up vast new sources of carbon.
In President Barack Obama’s most recent State of the Union address, he reiterated his commitment to addressing the urgency of climate change for the sake of future generations. The president’s will, however, is matched by the utter intransigence of Congress and what has been called the most antienvironmental House of Representatives in history. Looking forward, the Obama administration will face some big decisions early on in the second term: the fate of the controversial Keystone XL pipeline, regulating pollution from existing coal-fired power plants, and whether or not to move forward with offshore drilling in the fragile Arctic.
America’s Arctic outer continental shelf will be undisturbed by drilling rigs in 2013, but the battle over oil and gas exploration in its frigid waters is far from over. Shell made clear that it sees this latest announcement to pause operations as a hiatus, not a cancellation of its plans to tap the Arctic Ocean’s reserves. Marvin Odum, Shell’s director of Upstream Americas, said, “Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012.”
The Obama administration will also need to decide on ConocoPhillips’ applications to begin exploratory drilling in 2014. The company said its plans remain on track and it will submit remaining information to the Department of the Interior this spring, despite Shell’s problem-filled year.
As CAP’s John Podesta and Carol Browner articulated in a recent Bloomberg op-ed, Shell’s string of mishaps and failures provide overwhelming evidence that the oil and gas industry is not prepared for the enormous challenge and incalculable risk that accompanies any operations in the Arctic. In light of that reality, they wrote, “The Obama administration shouldn’t issue any new permits to Shell this year and should suspend all action on other companies’ applications to drill in this remote and unpredictable region.”
Below we examine in further detail the risks and potential consequences of offshore drilling in the Arctic region.