Shell Gives Up on Alaska Drilling For This Year

Shell will forgo drilling into the hydrocarbon zones beneath its Alaska exploration sites because of damage during tests of its oil spill containment system, thrusting the safety concerns that have been raised repeatedly by opponents of artic drilling into the spotlight yet again.

The oil company disclosed that the containment dome aboard the Arctic Challenge barge was damaged during one of the final tests of its Artic Containment System. Repairs will take several days — enough to prevent the company from doing any more than drilling shallow top holes this year at its sites in the Chukchi Sea.

"The time required to repair the dome, along with steps we have taken to protect local whaling operations and to ensure the safety of operations from ice floe movement, have led us to revise our plans for the 2012-2013 exploration program," says Shell in a statement issued September 17. "In order to lay a strong foundation for operations in 2013, we will forgo drilling into hydrocarbon zones this year. Instead, we will begin as many wells, known as ‘top holes,’ as time remaining in this season allows. The top portion of the wells drilled in the days and weeks ahead will be safely capped and temporarily abandoned this year, in accordance with regulatory requirements."

Shell got clearance to begin exploratory oil drilling in the Chukchi Sea in late August. Those permits let it drill i,400 feet below the Chukchi seabed, but the company still needs approval from the US Coast Guard for its oil-containment barge before it can dig farther down into oil reservoirs that are about 4,000 deeper than that.

US Coast Guard officials have repeatedly said the resources for cleaning up an oil spill in the Arctic Ocean don’t exist.

Shell is still waiting on permits to begin work in the Beaufort Sea.

In either case, there is a deadline — one imposed by Mother Nature as ice begins reforming for the winter season. Drilling on the Chukchi Sea sites must finish by September 24. The window of opportunity is bigger for the Beaufort projects; Shell will have until October 31 to drill exploratory wells before the ice begins to freeze over. 

If Shell gets its way, it will continue drilling shallow wells at the Burger A prospect in the Chukchi Sea later this week; the site discovered in the 1990s could contain up to 1.8 billion gallons of oil. It is also hoping for some progress at the Beaufort site.

Combined, the sites could be worth an estimated $10 billion for Shell, reports Bloomberg.

Ironically, Shell has already spent about half of that amount to fight for the rights to drill in Alaska after a moratorium of more than 20 years. 

Opponents of Artic drilling welcomed Shell’s latest setback, saying is raises important safety concerns – again – and suggesting that the US reconsider its decision to let drilling proceed.

"Ever-shifting sea ice and technical challenges have proven too much for Shell, bearing out predictions that the Arctic is simply too volatile to allow for safe drilling operations," says Michael Conthan, director of Ocean Policy for the Center for American Progress. "Shell’s inability to get its own equipment in order, despite a massive investment of time and money, should give pause to any company with similar plans, and the same challenges will remain next year. Until we develop adequate safeguards and sufficient response infrastructure to manage and support drilling operations, the Arctic should remain off limits to drilling."

Greenpeace also held up the latest mishap as validation that the Artic should be off limits.

"Shell has invested seven years of effort and spent the best part of $5 billion on its Arctic program, but we can now see what a monumentally reckless gamble this was," says Ben Ayliffe, Senior Artic Campaigner for Greenpeace. "The company has nothing to show for it except a series of almost farcical safety mishaps that has left its reputation in tatters. Investors must now be asking whether investing such vast sums of money trying to exploit the fragile Arctic is really worth it."

More than 2 million people worldwide support the Greenpeace campaign to Save the Arctic, which has drawn more attention in recent weeks as the pace of the Artic ice melt accelerates.

For more information on the campaign to Save the Arctic:

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