Shell Gives Up on Arctic Oil in 2012 After Latest Failure

Yesterday, Shell admitted what we’ve known all along: the company is just not ready to drill for oil in the Arctic Ocean.

This past weekend, a failed test of Shell’s oil spill containment system resulted in damage to the dome designed to contain oil in the event of a spill. In light of the damage to the containment dome, Shell announced that it was abandoning its plans to drill into oil-bearing layers in the Arctic Ocean this summer. The company said its drilling operations in the Arctic Ocean this summer would be limited to “top holes”—initial sections of wells that do not penetrate into known oil-bearing layers.

According to one media report, trouble with the containment dome started when one of the dome’s winches failed to operate correctly. Engineers sent a subsea remotely operated vehicle to investigate the problem. The ROV tangled in the anchor lines of the containment dome, causing the dome to sink into the silt on the ocean floor. As a result of the incident, the dome suffered an undisclosed amount of damage.

The containment dome failure is just the latest in a series of setbacks that have plagued Shell throughout the summer:

• Earlier this summer, Shell changed its story about its ability to clean up oil spilled in the Arctic Ocean. Portions of Shell’s oil spill response plan assume Shell would be able to clean up 90 percent of the oil released in a worst-case spill in the Arctic—even though actual recovery rates rarely exceed 20 percent even in the best of conditions. In the face of questions about its capacity to recover spilled oil, the company backpedaled, saying that it would only “encounter” 90 percent of spilled oil.

Credit: Damian Gadal flickr stream

• Around the same time it was changing its story about oil spill recovery, Shell admitted that one of its drillships—the Noble Discoverer—would not be able to meet air pollution standards set forth in EPA permits. The oil company was forced to seek a waiver from EPA to allow the drillship to emit additional pollution. EPA granted Shell’s request for a waiver a few weeks ago.

• In July, the Noble Discoverer nearly ran aground in relatively protected waters near Dutch Harbor, Alaska. The incident raised questions about Shell’s ability to operate safely in more challenging conditions further north.

• All summer long, Shell has had trouble obtaining Coast Guard certification for its oil spill response barge, the Arctic Challenger. Unable to meet the original safety requirements, Shell sought—and received—permission to have the barge evaluated under less stringent standards. Even then, it took all summer for Shell to renovate the barge, and the Arctic Challenger was not able to leave the dock for sea trials until well into September.

• The day after Shell began initial drilling the pilot hole for a long-delayed exploration well in the Chukchi Sea, a huge ice floe drifted toward the well site. The presence of the ice—which measured roughly 30 miles long by 12 miles wide—forced Shell to stop drilling operations, disconnect the drillship from its anchors, and pull away form the well site. At this writing, Shell is still waiting for the ice to clear the area.

Viewed in the context of all these shifts, missteps and setbacks, it should come as no surprise that this past weekend’s test of Shell’s containment dome was a failure. Shell’s record speaks for itself: the company is just not up to the challenge of operating safely and responsibly in the Arctic environment.

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