Shell's controversial Arctic campaign - how safe is it?

October 1, 2012 | 00:00

Shell's controversial Arctic campaign - how safe is it?

How safe is the drilling programme that Shell has started in the Arctic waters around Alaska? Environmental activists fiercely oppose Shell's activities, but the US Department of Interior has approved the company's plans and issued the necessary permits. Independent experts agree that, in theory, Shell's plans look safe. But they point out that very little is yet known about the real risks of Arctic oil drilling. They would like to see more research being done before the vulnerable region is given over to the oil industry.

No one knows how much of the Arctic's reserves can be recovered economically (c) BostInno

The US Geological Survey (USGS) has estimated that the Arctic region contains 90 billion barrels of undiscovered, technically recoverable oil, 1,670 trillion cubic feet (46,760 billion cubic metres) of technically recoverable natural gas, and 44 billion barrels of technically recoverable natural gas liquids. Those are sizable amounts, roughly equivalent to Russia's proven oil and gas reserves. Of course there is a big difference between 'technically recoverable' and 'proven' reserves: no one knows how much of the Arctic's reserves can be recovered economically.

USGS further estimates that over half of the oil and gas resources in the Arctic occur in just three of the 25 geologically defined areas: Arctic Alaska, the Amerasia Basin and the East Greenland Rift Basin. This makes the Arctic region around Alaska tempting territory for oil companies daring to take up the challenge of exploration behind this last oil frontier.

Shell is the first company to have taken up this challenge. This autumn the Anglo-Dutch oil company started preparations for exploratory drilling in the Beaufort and Chukchi Sea north and northwest off Alaska. That is to say, in the Chukchi Sea, Shell was permitted to drill one exploration well but had to cancel this plan at the last moment due to approaching sea ice and a failure to comply with technical regulations. In a press release dated 17 September, Shell said it will now confine its drilling program in the Chukchi Sea to constructing a number of so-called 'top holes'. These are essentially the 'foundations' of exploratory wells. In other words, when Shell returns to the Chukchi Sea next spring, it can start drilling its exploration wells rightaway, as the top holes are already in place. (On Shell's corporate website, you can find instructive video films on how Shell's drilling programme in Alaska works, including even footage of current operational activities.)

In the Beaufort Sea the company was forced to follow the same scenario after it appeared that Shell's containment barge the Arctic Challenger could not meet the safety standards of the Coast Guard. Shell now plans to return to the Beaufort and Chukchi Seas to drill for hydrocarbons next year. The plan was to drill four exploratory wells in the Beaufort Sea and six in the Chukchi Sea over a two-year period (2012-2013).

But while Shell enthusiastically claims on its website that "this is an exciting time for Alaska and for Shell", environmental groups are much less excited, to say the least. Under the heading "Save the Arctic", Greenpeace has started a massive campaign against Arctic drilling in general and Shell in particular (though it is also targeting Exxon, BP, Rosneft, Gazprom and others). "The same dirty energy companies that caused the Arctic to melt in the first place are looking to profit from the disappearing ice", says Greenpeace. "If we let them do this, a catastrophic oil spill is just a matter of time."

Bowhead whales

Alaska has long been an important oil-producing region for the US. Between 1980 and 2000, the State accounted for an average of one-fifth of all US oil production. In a way Alaska is "an Oil Exporting

Production in Alaska has been declining since 1988. That is why legislators have been pushing hard for authorisation to drill for oil and gas in the Arctic seas

Country": more than 90% of its revenues derive from oil. But production in Alaska has been declining since 1988. That is why legislators, backed by companies like Shell and ConocoPhillips, have been pushing hard for authorisation to drill for oil and gas in Alaska's Outer Continental Shelf (OCS) off the state's north coast. In other words: in the Arctic seas.

For a long time, Shell and other companies were unable to obtain permission to drill in this region. But beginning this year, after having invested over $4 billion in offshore infrastructure, research and leases, Shell finally managed to get its last crucial Oil-Spill Response Plan (OSRP) for the Beaufort Sea approved by the Bureau of Safety and Environmental Enforcement (BSEE). The company now has permission to drill 'top holes' in the Beaufort Sea between July 15 and October 31 and in the Chukchi Sea until September 24.

Shell's plans have been resisted fiercely by international environmental NGOs and Alaskan natives because they fear deleterious effects on native populations and the marine environment. The Beaufort and Chukchi Seas are the main migratory routes in the western Arctic for mammals to their breeding grounds, especially bowhead whales. These whales are a staple diet of a dozen Inupiaq communities along the coast. Bowhead whales travel up to 18 miles to avoid sounds they don't like. "For every additional mile a whaler has to travel, there's more potential for injury or a potentially catastrophic event", said Thomas Lohman, an environmental resource specialist in the North Slope Borough Department of Wildlife Management in Environmental Health Perspectives.

Shell has repeatedly promised not to drill in the Beaufort Sea before the end of the whaling season, but NGO's point out there are a lot more risks to consider. A spill in the order of magnitude of the Exxon Valdez or Deepwater Horizon could easily reach Cape Krusenstern, a treeless coastal plain and national bird reserve twenty miles south of the village of Kivalina. During fall, half of all migratory birds on the American continent visit Cape Krusenstern beach ridges, hills and lagoons where they feed and stage. Caribou herds, sometimes numbering several thousands, roam the slope. And for more than five millennia, Inupiaq along the coast, from Kotzebue in the Northwest Arctic Borough to Barrow on the North Slope, have hunted all kinds of seals, whales, fish and game there.

Booms and skimmers

In theory, Shell's OSRPs are sound. The hefty OSRP manuals for the Beaufort and Chukchi sketch a wide array of measures to be taken in case of a spill. In case of an accident, the company has twenty-two vessels standing by, oil collection equipment at hand and a second rig available to drill a relief well to stop a possible blowout. A five-story blowout preventer will be built over the wellhead, including a newly developed 100-ton capping stack.

Nanuq, Shell’s oil-spill response supply vessel, and other large barges are carrying so-called booms and skimmers. The ice-resistant booms float on the water surface and act as barriers to prevent oil from spreading. Booms are also used to gather spilled oil in U-shaped pools, so it can be burned at the spot (called in situ burning). Or, better still, the booms will gather the oil and pump it into the Affinity, an Arctic tanker with 513,000 barrels of storage space located within 240 nautical miles of the rig. There are two different types of skimmers: one sucks up spilled oil like a vacuum cleaner, the other spins in the water and absorbs oil on rotating fibres.

When heavy weather prevents mechanical recovery or freeze-up sets in, Shell plans to shift to a different scenario. In-situ burning with torches from helicopters and the use of dispersants like Corexit are then supposed to contain the spill. Corexit was also used in The Deepwater Horizon and Exxon Valdez clean-ups and is said by critics to be highly toxic. Both burning and the use of dispersants are contingent on approval by the Coast Guard which, by law, is in charge of the response, though it is not responsible for carrying out the cleanup. Under the Oil Pollution Control Act of 1990, the party that is responsible for the spill must respond to it and control it. The rules led to some confusion after the Macondo blowout as the Coast Guard was forced to alternately hand over control and take the lead at different points during the response.

The measures described by Shell in its OSRPs are virtually the same as the ones taken during the cleanup of Macondo. The problem is that although the US government has reorganised the Department

"Little to no progress has been made to improve the regulation and safety conditions of offshore drilling in the US"
of the Interior and changed the Mineral and Management Service into the Bureau of Ocean Energy, Management, Regulation and Enforcement (BOEMRE), regulatory oversight of offshore drilling has not changed substantially. In April 2012, Oceana, the largest international advocacy group for ocean conservation, reported that "little to no progress has been made to improve the regulation and safety conditions of offshore drilling in the US." According to Oceana, only a quarter of the inspectors needed to oversee the Gulf of Mexico had been hired while the number of inspections of drilling platforms declined by thirteen percent from 2010 to 2011.

Although weather conditions in the Arctic can be much worse than in the Gulf of Mexico, the Arctic also offers some advantageous conditions. Thus, the Beaufort and Chukchi Seas are rather shallow, less than 150 feet. This makes them more accessible to divers and ROVs (remotely operated vehicles). Because of the shallowness, well pressures at the sites are expected to be less than 4000 psi, compared to the Macondo well’s pressure of 15000 psi, making it easier to control a possible blowout. Moreover, it is believed that, in case of an oil spill, the formation and existence of sea ice dampens the waves, slows down weathering and prevents oil spreading over large areas. This would widen the window of opportunity to react in case a spill occurs.

Controlled spills

But this is all theory. In truth, little is really known about how oil and gas production (and possible oil spills) in the Arctic may affect the natural habitat. In a report released last year ("Science Needs to Inform Decisions on Outer Continental Shelf Energy Development in the Chukchi and Beaufort Seas, Alaska"), the USGS states that "it is difficult, if not impossible to examine the rapidly emerging science and technical information to the decision-making process" and that "numerous efforts have been unsuccessful at developing a transparent, quantitative and comprehensive method to assess cumulative impacts". According to Oceana, instead of taking those concerns seriously, BOEMRE, the responsible federal agency, downplayed this lack of scientific evidence and approved Shell's OSRPs regardless of these knowledge gaps.

The only country that has recently carried out field tests of controlled oil spills for scientific purposes is Norway. Under the Joint Industry Program (or JIP), six oil companies (Shell, ENI, Statoil, ConocoPhillips, Total and Chevron) together with Sintef, an independent research organization based in Trondheim, have conducted extensive field trials over the last twenty years. In 1993, 2008 and 2009 limited amounts of crude oil were released in the Barents Sea, east of the Svalbard archipelago. During those trials, several response techniques were validated, including new skimmer concepts, use of dispersants, booms to improve in-situ burning of oil-in-ice as well as remote sensing and the detection of oil-in-ice.

According to Ivar Singsaas, senior scientist in marine chemistry and research manager at Sintef, these field trials were successful. "In 2009, we succeeded in igniting the confined oil with the ice in fire-proof booms", he tells EER. "95 percent of all oil was burned while the residue was collected. We also tested chemical dispersants and new equipment. Up to now, mechanical recovery in open waters is the most frequently used method in case of an oil spill. It can also be done in water covered by ice but with reduced effectiveness, especially in severe ice conditions. JIP has proven that it is possible to use dispersants in much higher concentrations of ice than previously thought. This increases the window of opportunity."

If stationary water diminishes the effect of dispersion into the water, Singsaas adds, "companies can bring in vessels for artificial turbulence, the so-called 'prop wash'. And although booms have reduced effectiveness when the ice exceeds the water with thirty percent, at a high enough percentage of cover, ice itself can act as a sort of boom."

Failing light

The question is whether such field trials accurately replicate the actual conditions in the Arctic, which can be incredibly harsh and unpredictable, especially when the Arctic winter sets in. Without warning, bright sunny weather of minus 30 Celsius with excellent visibility can change into a raging blizzard, putting all flights and operations on hold for days.

William Scott Pegau is familiar with the circumstances. For years he has managed the research program of the Oil Spill Recovery Institute (OSRI) in Cordova, Alaska, part of the Prince William Sound Science Centre. OSRI was set up by the US Congress after the Exxon Valdez ran aground on a well-marked reef in 1989 in Prince William Sound. Approximately 11 millions of gallons of crude oil were spilled onto shores as far as the Kenai Peninsula and the Kodiak islands, more than 500 miles away. The Exxon Valdez Oil Spill Trustee Council, a governmental body set up on the basis of a settlement with ExxonMobil and one of the financers of OSRI projects, expects it will take decades before the 21,000 gallons of the oil that's still remaining will have disappeared. To prevent such a disaster from happening again, OSRI has been given a mandate to identify and develop the best available techniques, equipment and materials for dealing with oil spills in the Arctic and sub-Arctic marine environment.

According to Scott Pegau, responding to a spill in spring and in open water is relatively easy. But in autumn the window of opportunity changes radically. "That's one of the concerns I have", he says. "During fall there's failing light and the potential for frazil ice that will impact cleanup efforts. Poor

"What worries me is that there isn't unbiased scientific evidence to go by"
infrastructure in the Arctic is also important. We don't want to develop equipment that is unable to reach the area because it's too large for the logistical capacities of the region. It will take at least three days to sufficiently react, probably longer. When cleanup teams arrive, working conditions will be difficult. Darkness limits operations and equipment freezes. Dispersants work best under windy conditions and could be an important tool in case of a spill. But we are just beginning to learn the potential effects of adding large volumes of dispersed oil into the environment. In open water cleanup teams could pick up twenty percent of the oil. A hurricane after dispersants have been used strips everything out. What worries me is that there isn't unbiased scientific evidence to go by."

Worst case

The Pew Environment Group, an independent NGO promoting pragmatic, science-based standards for conservation policies in the US, raises similar concerns. Pew, which has followed the oil industry for decades, is not opposed to offshore drilling per se, but believes it's far too early to start now in the Arctic. At least two to three more years of thorough scientific research needs to be done, says Marilyn Heiman, Director of Pew’s US Arctic Program and former board member of the Exxon Valdez Oil Spill Trustee Council.

"With more than two dozen vessels and icebreakers on standby and an improved capping and containment system, Shell's OSRPs are robust", Heiman comments. "But even those OSRPs have their flaws. Don't forget this is a frontier area with extreme weather. You should really have a relief rig nearby in case an oil spill or blowout occurs. But Shell wants to use its Beaufort drilling rig in Camden Bay as a backup in case something goes wrong at Burger Prospect in the Chukchi Sea, and vice versa. The Kulluk and Noble Discoverer rigs are over 400 miles apart. This approach will cause a serious time lag and will narrow the window of opportunity to respond."

Another concern of Pew is the 'worst case' discharge scenario Shell has drawn up. This scenario envisions a spill taking place in early September. However, Shell is permitted to drill in the Beaufort Sea

"Don't forget this is a frontier area with extreme weather. You should really have a relief rig nearby in case an oil spill or blowout occurs"
until the end of October and a true worst-case spill, Heiman says, seldom takes place in favourable circumstances. It is more likely to occur at the end of operations in October when freeze-up occurs. “Slush ice will be starting to move in and hamper cleanup operations. Key response tools would lose their effectiveness. It would take hours to defrost skimmers and lines for booms. The probability of igniting the oil starts to drop with each day.” So, according to Heiman, “there would be absolutely no comprehensive cleanup methods left”.

Another criticism voiced by Heiman concerns mapping: "Shell could have done better. They have to identify the areas that are important to marine mammal migrations, subsistence and sensitive habitats along the shore that could be impacted by a spill." She says the US government should have followed the example of Norway. "That country has drawn up maps where it is permitted to drill and where not."

Heiman feels more time is needed to carry out the entire process properly. According to Scott Pegau, some progress has been made: "The Coast Guard in Kotzebue, one of the hubs in the Arctic north, has done a decent job in identifying which shorelines should be protected first", he notes.

Hence, although Shell is steaming ahead in the Arctic, the debate on oil drilling in the Arctic Seas is by no means over. Not even within the oil industry. The latest news is that Christophe de Margerie, CEO of French oil major Total, has voiced opposition to oil drilling in the Arctic, because of the risks of an oil spill. He did not, however, object to gas production in the Arctic. Total has no plans to explore for oil in Arctic waters, only for gas.

 

Additional reading

See also these earlier articles on oil and gas drilling in the Arctic:

Subhankar Banerjee, BP’ing the Arctic, 26 May 2010 
Uchenna Izundu, Gambling on Greenland, 10 January 2011
Matthew Hulbert, Arctic Oil: Putin’s Last Chance, 19 July 2012 
Subhankar Banerjee, Walking the Waters, 29 August 2012


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