Shell’s Arctic Oil Exploration Operation Faces Multiple Investigations

From Miami Herald

By Lisa Demer

As response teams continued Tuesday to evaluate Royal Dutch Shell’s once-grounded oil drilling rig, the Coast Guard, the Obama administration and U.S. Sen. Mark Begich all announced investigations or reviews taking a close look at Shell:

• Interior Secretary Ken Salazar announced “an expedited, high-level assessment” of Shell’s 2012 offshore drilling program in the Beaufort and Chukchi seas.

• The Coast Guard commander for Alaska has ordered a formal marine casualty investigation into the circumstances of the Dec. 31 grounding of the then-unmanned Kulluk during a pounding Gulf of Alaska storm just offshore Sitkalidak Island, south of Kodiak.

• Begich, in a letter to the national Coast Guard commandant, Adm. Robert Papp, and Shell Oil Co. president Marvin Odum, said he planned to hold an oversight hearing in his capacity as chairman of the Senate Commerce subcommittee on oceans, atmosphere, fisheries and Coast Guard.

The Kulluk, a heavy, round, Shell-owned drilling rig, was refloated Sunday night and towed Monday to Kiliuda Bay on the southeast side of Kodiak Island. It was pulled by the Shell-contracted Aiviq, the same ship that was towing it when troubles started Dec. 27 during the winter storm.

Shell and its salvage crews were waiting to get more information on the Kulluk’s condition from underwater inspections by divers, remote-operated vehicles or both. ROVs were headed to Kiliuda Bay Tuesday. A spokesman for the command team managing the Kulluk incident said he didn’t know if they would perform in-water inspections Tuesday or when results would be available. The command team wasn’t planning a live video feed of the inspections but images should be available after the fact, said spokesman Ignacio Gonzalez, who normally works for Shell in Houston.

In October, the Kulluk began drilling a single exploratory well in the Beaufort Sea and a Shell-contracted vessel, the Noble Discoverer, began a well in September in the Chukchi. An oil-spill containment dome was damaged during testing, so Shell wasn’t allowed to drill to depths at which it expected to find oil.

The Department of Interior review, expected to be complete in 60 days, will examine practices as well as what the agency called Shell’s challenges. Among those are the damaged oil spill containment dome, a novel apparatus that Shell volunteered to engineer but that now is required as part of its oil spill response; problems in getting Coast Guard certification of the companion oil-spill containment barge, the Arctic Challenger; and issues with both of Shell’s drilling rigs, the Kulluk and the contracted Noble Discoverer. The Discoverer dragged its anchor while in Dutch Harbor this summer, and also had problems with safety and pollution control equipment.

The broad review will look at Shell’s safety management systems, its oversight of contractors, and its ability to meet what Salazar called strict standards for oil exploration and development offshore in the Arctic. It will be led by Tommy Beaudreau, the director of Interior’s Bureau of Ocean Energy Management. Inspectors with BOEM’s sister agency, the Bureau of Safety and Environmental Enforcement, were on board Shell’s rigs during drilling operations.

Environmentalists welcomed the broad review by the Obama administration, which has been pushing Arctic oil exploration as a way to reduce dependence on foreign oil.

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