Grounding 'shows Arctic drilling danger'

This aerial image provided by the US Coast Guard shows the Royal Dutch Shell drilling rig Kulluk aground off a small island near Kodiak Island. (AP)
This aerial image provided by the US Coast Guard shows the Royal Dutch Shell drilling rig Kulluk aground off a small island near Kodiak Island. (AP)

Anchorage - The grounding of a petroleum drilling ship on a remote Alaska island has refuelled the debate over oil exploration in the US Arctic Ocean, where critics for years have said the conditions are too harsh and the stakes too high to allow dangerous industrial development.

The drilling sites are 1 600km from Coast Guard resources, and environmentalists argue offshore drilling in the Arctic's fragile ecosystem is too risky. So when a Royal Dutch Shell PLC ship went aground on New Year's Eve on an uninhabited island in the Gulf of Alaska, they pounced - saying the incident foreshadowed what will happen north of the Bering Strait if drilling is allowed.

For oil giant Shell, which leads the way in drilling in the frontier waters of the US Arctic, a spokesperson said the grounding will be a learning experience in the company's years long effort to draw oil from beneath the ocean floor, which it maintains it can do safely.

Though no wells exist there yet, Shell has invested billions of dollars gearing up for drilling in the Beaufort and the Chukchi seas, off Alaska's north and northwest coast.

Fragile, remote

The potential bounty is high: The US Geological Survey estimates 26.6 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas exist below Arctic waters.

Environmentalists note the Beaufort and the Chukchi seas are some of the wildest and most remote ecosystems on the planet. They also are among the most fragile, supporting polar bears, the ice seals they feed on, walrus, endangered whales and other marine mammals that Alaska Natives depend on for their subsistence culture.

"The Arctic is just far different than the Gulf of Alaska or even other places on earth," said Marilyn Heiman, US Arctic director for the Pew Environment Group.

Royal Dutch Shell PLC in 2008 spent $2.1bn on Chukchi Sea leases and estimates it has spent a total of nearly $5bn on drilling efforts there and in the Beaufort.

Shell Alaska spokesperson Curtis Smith said the company has a long, successful history of working offshore in Alaska and is confident it can build another multi-decade business in the Arctic.

"Our success here is not by accident," Smith said. "We know how to work in regions like this. Having said that, when flawless execution does not happen, you learn from it, and we will."

Ship ashore

The drill ship that operated in the Beaufort Sea, the Kulluk, a circular barge with a funnel-shape hull and no propulsion system, ran ashore on Monday on Sitkalidak Island, which is near the larger Kodiak Island in the gulf.

The ship had left Dutch Harbor in the Aleutian Island under tow behind the 110m anchor handler Aiviq on 22 December. It was making its way to a Pacific Northwest shipyard for maintenance and upgrades when it ran into a vicious storm - a fairly routine winter event for Alaska waters.

The tow line snapped on 27 December. Shell vessels and the Coast Guard reattached tow lines at least four times. High wind and seas that approached 15m frustrated efforts to control the rig, and it ran aground on a sand and gravel beach.

Shell, the drill ship operators and transit experts, and the Coast Guard are planning the salvage operation.

Calmer weather conditions on Wednesday allowed a team of five salvage experts to be lowered by helicopter to the Kulluk to conduct a three-hour structural assessment. Also taken to the Kulluk was a state-owned emergency towing system for use in the operation.

"There are still no signs of any sheen or environmental impact and the Kulluk appears to be stable," Coast Guard Captain Paul Mehler said on Wednesday night in a telephone briefing. He flew over the rig earlier in the day with a Shell representative and an Alaska Environmental Conservation Department official.

Timeline unsure

Mehler said the assessment team that checked the ship on Wednesday was working with salvage planners but it was too early to speculate on a time line for moving the ship.

He said he saw four life boats on the shoreline but there was no indication that other debris had been ripped from the ship.

The overflight in rain and 56k/h winds showed a few birds but no marine mammals near the rig, said Steve Russell of the Environmental Conservation Department.

The state of Alaska has been an enthusiastic supporter of Arctic offshore drilling. More than 90% of its general fund revenue comes from oil earnings.

However, the trans-Alaska pipeline has been running at less than one-third capacity as reserves diminish in North Slope fields. State officials see Arctic offshore drilling as a way to replenish the trans-Alaska pipeline while keeping the state economy vital.

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