What Shell’s Kulluk Oil Rig Accident Means for Arctic Drilling

An oil rig owned by Royal Dutch Shell that ran aground near Kodiak Island, Alaska, on Monday night is still being battered by winds and high seas, raising fresh questions over the company?s plan to open the Arctic Ocean to offshore drilling. The oil rig, the Kulluk, was being towed south for repairs and improvements at a shipyard in Washington State in advance of the 2013 drilling season when crews ran into trouble during a winter storm on December 27. In a building series of mishaps, towing equipment broke, engines on the primary tug failed, and a series of relief vessels, including the Coast Guard cutter Alex Haley, were unable to maintain control of the drifting rig. All the while, the storm built in strength, with winds ultimately reaching 70 knots and waves topping 50 feet at times. The Kulluk is now grounded just off the coast Sitkalidak Island, near the eastern end of Kodiak Island.

A Coast Guard rescue crew in an MH-60 Jayhawk safely hoisted a small transport crew off the Kulluk in extremely dangerous conditions. While the rig can hold up to 103 workers during drilling operations, a skeleton group of just 18 was riding the Kulluk south. The men onboard were outfitted with Mustang survival suits made for frigid water, and all had undergone survival training.

The Kulluk is carrying about 143,000 gallons of diesel fuel and 12,000 gallons of other hazardous fluids onboard. No oil has been spotted in the water and there?s no evidence of damage to the rig?s hull, according to Coast Guard officials who spoke during a press conference held at 2 pm Alaska time (6 pm Eastern) on Tuesday. Helicopters and C-130H planes are being used to monitor the rig from the air, and the Coast Guard hopes to land a crew of salvage experts onboard to assess any damage and help formulate a plan for getting the Kulluk afloat and out to sea once again. About 500 personnel are involved in the response, according to Coast Guard officials.

I visited the Kulluk for four days at the end of October while it was onsite in the Arctic. The rig is built with 3-inch steel plates and a circular shape to resist enormous pressures from pack ice. For that reason, it seems well-prepared to survive being slammed against the coast. However, the rig has no keel and only a nominal bow, which makes it a slow, rough ride while under tow in the open sea. During drilling operations, it can be moored with 12 anchor lines. It also has a single ?survival? anchor, but it?s not known whether it was deployed before running aground. Since the rig has no propulsion system, it is just an enormous floating piece of steel if it?s neither anchored to the seafloor nor attached to a tug.

Shell bought the Kulluk and leased the Noble Discoverer drillship to pursue a plan of opening the Arctic Ocean to an offshore oil industry that one day could rival Alaska?s North Slope or even the Gulf of Mexico in importance. But since purchasing offshore leases in 2005 and 2008, lawsuits, regulatory hurdles, and mishaps have prevented the company from exploring for oil. In 2012, the company finally seemed ready to begin drilling. But it fumbled several times over air permits, Coast Guard certification of an oil-spill response barge, and severe damage to a required piece of oil-spill equipment. In an echo of the current situation, the Noble Discoverer pulled anchor and nearly ran aground this summer in Dutch Harbor, in the Aleutian Chain of islands.

All this raises several questions about Arctic drilling, which will be addressed in the weeks and months to come.

1. Assuming the Kulluk is salvaged, will it be ready to drill in 2013, as Shell planned? How extensive will the damage prove to be?

2. What does this mean for offshore Arctic drilling overall? Critics have long argued that drilling in the Arctic Ocean is too dangerous because of harsh conditions and remote locations. The current situation is unfolding just about 50 miles from the Coast Guard?s largest installation in Alaska, Air Station Kodiak. If the Kulluk had run aground more than 1000 miles away on the coast of the North Slope, Shell would be largely on its own. The Coast Guard has no permanent facilities up there, and only one functional ice breaker, the Healy, which is meant primarily for scientific research.

3. Will Shell run into fresh regulatory challenges as it seeks to explore for oil in 2013 and beyond? Will it get to drill in 2013 as planned?

Source: http://www.popularmechanics.com/science/energy/coal-oil-gas/kulluk-oil-rig-accident-arctic-drilling-14928526?src=rss

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