In a briefing open to the press with Senator Lisa Murkowski, Shell emphasized its experience in harsh, remote Arctic environments and the lengths and expense it is willing to go to safely explore, develop and produce oil and gas resources in the Chukchi and Beaufort seas.
“We do work in a lot of areas worldwide where there are weather conditions that are more challenging than what we see in the Beaufort and the Chukchi,” said Shell Alaska Vice President Pete Slaiby. “For instance, we’ve been operating in the North Sea since the mid-1960s where we have higher winds and seas. The Gulf of Mexico can have dramatically higher wind. What we get in the Beaufort and Chukchi is multi-year ice. The currents you see right out the window here in Cook Inlet are probably two to three times the current you see in the Chukchi, and Shell put the first two platforms in Cook Inlet in the early 1960s.”
The Chukchi Sea is an important future source of U.S. energy supply with up to 29 billion barrels of oil and 209 trillion cubic feet of natural gas potentially in place. The Chukchi is considered the most prospective unexplored offshore basin in the country.
Shell has been slammed with repeated permitting and litigation delays and has spent in excess of $3.5 billion over the past several years to acquire leases and prepare for drilling. The company is seeking approval for a 2012 exploration plan that would allow it to drill several wells in both the Chukchi and Beaufort, reinforced by a flotilla of support ships, barges, tugs, recovery vessels, back-up drill rigs, and a double-hulled icebreaking tanker with a capacity of 513,000 barrels.
Shell was planning to mobilize its fleet in 2010, but the Deepwater Horizon spill in the Gulf of Mexico led to a de facto moratorium on Arctic drilling. The company’s 2011 program was scuttled after its final air permit was revoked by the Environmental Protection Agency’s (EPA) appeals board.
Shell is now looking for a positive record of decision on a supplemental environmental impact statement by October 3. If that decision isn’t positive, the 2012 program would also be derailed.
In an encouraging sign, the EPA has issued draft air quality permits for Shell and ConocoPhillips exploratory drilling operations in the Chukchi and Beaufort seas beginning in 2012. The draft permits are subject to a 30-day public review, and it is likely that environmental groups will also appeal the most recent drafts. Shell has spent over $60 million over the past four years to secure its air permits.
“We believe the work we have done to further modify and reduce our air emissions to meet new standards meets the goal of having no measurable impact on the environment or coastal villages,” said Shell’s spokesperson Curtis Smith.
At a July briefing in Anchorage, Shell highlighted its comprehensive spill prevention and response plans to Murkowski and the press. The company assured Murkowski it has the capability to respond quickly and effectively to a spill without the support of onshore infrastructure, which is currently quite limited in the Arctic.
Shell noted that drilling in the Arctic offers distinct differences and advantages over deepwater exploration and development in the Gulf of Mexico. The pressure encountered in deepwater drilling is multiple times greater than in Alaska where wells would be in much shallower water. The much lower reservoir pressure in the Alaska OCS means a significantly lower blowout risk compared to deepwater drilling in the Gulf. There are also major differences in well designs, as well as fundamental differences in the geology of the regions.
As it does with hurricanes in the Gulf of Mexico, Shell also has the ability to quickly move rigs out of harms way if ice moves in during its summer open-water drilling season.
Shell pointed out that the cold water of the Arctic and the depth of drilling offer some advantages that work in the company’s favor. For example, the Deepwater Horizon spill in the Gulf of Mexico last summer occurred in 5,000 feet of water. In the Chukchi, Shell proposes to drill in water up to 150 feet deep. In deepwater drilling in the Gulf of Mexico, down-hole pressure is three to five times greater than what would be encountered in the Arctic, making a well much more difficult to cap in the Gulf. With the much shallower waters of the Alaska Arctic, an initial oil slick – should an accident occur – would be between 150-250 feet wide.
Oil would reach the surface in less than 10 seconds if a blowout occurred in Alaska, while oil from last summer’s Gulf spill took more than an hour to surface and by then the slick was a mile wide.
Because oil would not emulsify as quickly in cold water, Shell would have a longer window of opportunity to use dispersants in the Arctic without losing their effectiveness.
At the core of Shell’s contingency plan is to have oil spill response equipment on site at drilling locations and staged at strategic points, ready for deployment in the unlikely event of a spill. The self-contained response capability would also include trained personnel and supplies.
The company already has extensive experience operating in remote Arctic regions with little or no infrastructure. Shell will use equipment specifically designed for deployment in icy conditions, even though the company would be drilling during a 105- day open-water season.
Shell emphasized its top priority and focus is the prevention of spills through effective well planning and the use of remote oversight and monitoring of drilling operations.
Given the difficulty encountered in stemming the flow of oil from the deep water spill in the Gulf of Mexico, Shell is developing two new well capping and containment devices for use in the Arctic. If there were a blowout in the Arctic and if the well’s blowout preventer recessed into the sea floor were to fail, Shell’s first response would be to cap the well to stop the escape of oil into the ocean. That could be done by lowering a capping system onto the well bore and then it would be clamped into place. This system would include conduit to send oil to storage vessels at the surface. This system would give drillers the capability to kill the well by re-entering the well or by injecting fluids.
A second device that could be deployed is a containment dome designed to be lowered over the top of the well to gather oil escaping from the well and direct it through piping to surface vessels.
Shell’s plan for the recovery of oil includes three tiers: recovery near the well site, recovery near to shore, and recovery onshore and along the shoreline.
Shell’s drilling operations will have a purpose built, ice-capable spill response vessel on site to support any well site oil recovery operation. The Nanuq is already in operation while a second vessel is under construction. The Arctic Endeavor, an ice-strengthened barge, would support nearshore response.
The vessels would be fully equipped with boom, skimmers, and other spill response equipment. An ice-class, double-hulled tanker would be used to store recovered oil.
For the shoreline and onshore areas, Shell has pre-staged equipment at strategic sites and has a contract with the spill response cooperative Alaska Clean Seas for onshore operations. Plans include the protection of high priority, environmentally-sensitive onshore sites.
Shell says it has enough equipment to respond independently to the largest foreseeable spill at any of its drilling operations in the Arctic. Should it prove necessary, the company also has access to caches of spill response equipment worldwide. Much of the equipment could be flown in through Barrow or the village of Wainwright. Much of the equipment is packaged so it can be transported quickly.
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