Salazar orders review of 2012 Arctic oil, gas drilling

This story was updated Jan. 9 with additional comments.

The US Department of the Interior has launched an expedited, high-level assessment of the 2012 offshore drilling program in the Beaufort and Chukchi seas, Interior Sec. Ken Salazar announced. The assessment, which will take 60 days, will review activities and identify challenges and lessons learned, he said.

It will pay special attention to problems Shell Offshore Co. encountered in connection with certification of its containment vessel, the Arctic Challenger; the deployment of its containment dome; and operational issues associated with its two drilling rigs, the Noble Discoverer and the Kulluk, Salazar said on Jan. 8.

US Bureau of Ocean Energy Management Director Tommy Beaudreau, who has been selected to serve as Acting Assistant Interior Sec. for Land and Minerals Management, will lead the assessment, with technical assistance from the US Coast Guard.

He said the review will look at Shell’s safety management systems, its oversight of contracted services, and its ability to meet the strict standards in place for Arctic oil and gas development.

DOI said during limited preparatory operations this past drilling season, Shell constructed top hole sections for one well each in the Chukchi and Beaufort seas. The department’s US Bureau of Safety and Environmental Enforcement conducted unprecedented oversight and had inspectors present onboard each Shell rig around the clock throughout those operations.

“As we oversee historic domestic drilling, BSEE will continue its unprecedented oversight of drilling activities in the Arctic and we will continue to hold anyone operating in public waters to the highest safety and environmental standards,” BSEE Director James A. Watson said.

USCG also announced it has initiated a comprehensive marine casualty investigation regarding the recent grounding of the Kulluk drilling unit. BSEE and the National Transportation Safety Board will provide technical assistance for the inquiry, DOI said.

Welcomes review

Responding to Salazar’s announcement, a spokesman for Shell in Alaska said on Jan. 9 that it’s important to take a look at 2012's Alaska offshore exploration season, and the company believes a review will demonstrate that drilling operations went well.

“We welcome that review, and we fully support an investigation into recent marine transit issues,” he told OGJ. “It's too early to speculate on any impacts to our ongoing exploration program. We will first complete an assessment of the Kulluk, but our confidence in the strength of this program remains.”

Randall B. Luthi, president of the National Ocean Industries Association, said on Jan. 8 that the organization stands ready to work with DOI in its review of offshore Alaska energy development activities. “It is, however, important that facts speak more forcefully than emotions and unfounded fears,” he added.

Luthi, who was US Minerals Management Service director from July 2007 to January 2009, said the recent grounding of the Kulluk was a weather-induced transportation incident. “It is unrelated to offshore drilling operations, which were conducted safely in 2012 under rigorous oversight by [DOI],” he noted. “It appears that no diesel fuel, lube oil or hydraulic fluid from the Kulluk was released into the environment, a testament to the safety engineering of the rig.”

It is important to incorporate lessons from the Kulluk’s grounding into future operations, but the incident itself is not a reason to ban offshore energy development in Alaska, Luthi said.

Not comfortable

But Cindy Shogan, executive director of the Alaska Wilderness League, said that Salazar indicated he never felt comfortable with allowing Shell to move forward in the US Arctic Offshore.

“His concerns echo what we have said all along, which is Shell Oil is not ready to drill in the Arctic,” she said on Jan. 9. “Any investigation will show that oil drilling in the Arctic Ocean cannot be conducted in a safe and responsible manner.”

Michael Brune, executive director of the Sierra Club, said on Jan. 3 that the Kulluk’s ground demonstrates that US President Barack Obama should withdraw Shell’s Arctic Offshore drilling permits.

“This is the last straw,” he declared. “We should judge Shell not by their assurances or their PR tactics, but by their record—and Shell’s record clearly demonstrates that letting them operate in the Arctic is an invitation for disaster.”

Contact Nick Snow at nicks@pennwell.com.

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