In spite of letters and petitions of opposition being sent to the Obama administration and having their drilling platform barricaded by protesters in various types of floating crafts, Royal Dutch Shell arctic drilling plans received a green signal from the U.S. government.
The foreign company can now start drilling below the arctic floor off the Alaskan northwest coast for the first time in over 20 years.
Originally, Shell only had permission to drill in the top regions, but they now have equipment that is supposed to guarantee against a blow out when they drill lower, and will have to get a lot of work done before things get too difficult in late September when hings get a little too frigid.
Shell now has two drill ships and 28 support vessels in the Chukchi Sea.
Transocean’s RIG Polar Pioneer, which is a semi-submersible drill ship, has already started work at the Burger J site, but the exploratory drilling may not produce anything for 10 years.
They had been exploring before, but in 2012 Shell lost its primary drilling rig when it sank. It was also fined for polluting the air.
Shell will be the first company to operate in this U.S part of the Arctic Ocean, and other energy companies like ConocoPhillips COP and Statoil ASA STO also have permits, but have no immediate drilling plans.
Groups like Green Peace that had protested any permits to drill are not alone in their opposition and caution.
According to the former BP boss, Lord Browne, who had to deal with the devastation in the Gulf of Mexico in 2010, drilling for oil in the Arctic may harm Shell’s reputation and cost it dear because the company board would most likely not prioritize a pristine Arctic over the search for oil.
As he said,
“I’m not chairman of Shell. But I think [Arctic drilling] is very expensive and I would always go for hydrocarbons which have less cost and effort involved. Some companies will genuinely believe – they may be right – that they can produce oil safely and environmentally securely in extraordinary conditions.[But] I’ve never been a great supporter of right-on-the-margin development, partly because of the cost. So I think you’ve got to be careful what you do and cost includes your long-term reputation.”
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Even Shell’s CEO Ben van Beurden has said:
“The drilling in the Arctic comes with an increased risk profile and that is because the environment is much more fragile than other environments. It is also much more unforgiving in terms of climate, weather, etc. It is also, by the way, the particular reservoir that we are going to explore in, one that is – from a technical perspective – relatively easy. So you have to make a judgement: ‘Can I do this in a responsible way?’
Whether that means that we can develop this in a way that makes commercial sense remains to be seen.”
When he was asked about the fallout from some calamitous mistake that could close down Arctic drilling, he said:
“If you are in our industry there are always significant risks that you have to worry about and therefore you have to have a very, very strong risk management framework, a very, very good risk management culture and an open and transparent dialogue within the company about what are the risks that you take on”.
I guess an “oops” and then some contrition will be a good remedy, as it seems to have worked well when the Deep Horizon’s oil spill happened, and kissing the boo-boo was acceptable to make it all better.
Opposing this, Greenpeace director John Sauven said:
“It’s been like Keystone Cops for Shell up there [in the Arctic], hasn’t it? They’ve had drill ships run aground, an oil containment dam crushed like a beer can, a towline snapped… Nothing of what they have done over the past couple of years would give you any kind of guarantee that they could drill safely for oil in the Arctic.”
But Shell’s van Beurden has assured us:
“There is no such thing as a risk-free world, so I cannot eliminate the risk altogether, but I can bring it back to something that I think is appropriate and manageable.”
Like BP did with the Gulf.