'Reckless' Shell puts Arctic drilling plans on hold
Environmental protesters blasted Shell on Monday after the energy giant abandoned controversial plans to start drilling for oil in the Arctic this year when a final test of its environmental protection equipment failed to meet the standards required to gain a full drilling permit.
The oil and gas group said a new type of "containment dome" – designed for use in the event of a leaking wellhead – had been damaged during testing.
"During a final test, the containment dome aboard the Arctic Challenger barge was damaged," Shell told investors in an update on Monday morning. "It is clear that some days will be required to repair and fully assess dome readiness."
As a result Shell has been unable to secure a permit to undertake full drilling operations and will have to wait at least until after the Arctic winter to resume its efforts.
The long-planned drilling programme in the Chukchi Sea, 112km off Alaska's north-west coast, has been dogged with last-minute hiccups as the company has raced to get drilling under way before the winter sets in.
Some drilling started this month but was halted within days after it emerged that an ice floe 48km long and 19km wide appeared to be heading towards the drill ship. Progress was further hampered by efforts taken to protect local whaling operations.
"In order to lay a strong foundation for operations in 2013, we will forgo drilling into hydrocarbon zones this year," Shell said. It will continue to drill several preparatory "top holes" ahead of full-blown drilling operations next year.
Responding to Shell's latest Arctic setback, Ben Ayliffe, senior Arctic campaigner at Greenpeace International, said: "Shell has invested seven years of effort and spent the best part of $5-billion on its Arctic programme, but we can now see what a monumentally reckless gamble this was. 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."
Shell still awaits a full drilling permit for its exploration programme in the area and the paperwork is dependent on successful testing of its Arctic containment system, which includes the dome. "We look forward to the final receipt of our drilling permits for the multiyear exploration programme upon the successful testing and deployment of the Arctic containment system," the company said.
Environmental campaigners have repeatedly warned about the high risks involved in Arctic drilling as well as the potentially catastrophic consequences of a spill similar to Deepwater Horizon in a region already affected by climate change.
Asked if another major spill would destroy the company's reputation, Peter Slaiby, vice president of Shell Alaska, recently told the Guardian: "I feel there is a hell of a responsibility on my head, but we have clear accountability models. I have the ability to do things in the right way and I have the backing of the most senior leaders in Shell to do things the right way."
Slaiby had also rounded on critics, such as Greenpeace, which had raised concerns about the amount of field testing undertaken using the containment dome, also known as a "capping stack".
"We even had the director of BSEE [Bureau of Safety and Environmental Enforcement] out with me looking at the capping stack ... I find these charges [of insufficient planning] groundless."
Focus of debate
Earlier this month, the containment dome had become the focus of debate after documents obtained under a Freedom of Information Act request suggested field testing of a containment dome took place over just two hours on June 25-26.
Public Employees for Environmental Responsibility (Peer), a US watchdog that helps federal and state employees raise concerns over environmental issues, said it was shocked by the single page of notes from the BSEE after it filed a federal lawsuit against the agency asking for all documents relating to the capping tests.
"The first test merely showed that Shell could dangle its cap in 200ft of water without dropping it," said Kathryn Douglass, a Peer lawyer. "The second test showed the capping system could hold up under laboratory conditions for up to 15 minutes without crumbling. Neither result should give the American public much comfort."
In its statement on Monday morning, Shell – which has spent more than $4.5-billion over four years preparing for work in the Chukchi and Beaufort seas – pointedly reminded investors of the importance of its Arctic drilling programme to the US economy.
"This exploration programme remains critically important to America's energy needs, to the economy and jobs in Alaska, and to Shell," it said.
Meanwhile, one of the world's leading ice experts has predicted the final collapse of Arctic sea ice in summer months within four years.
In what he calls a "global disaster" now unfolding in northern latitudes as the sea area that freezes and melts each year shrinks to its lowest extent ever recorded, Professor Peter Wadhams of Cambridge University calls for "urgent" consideration of new ideas to reduce global temperatures.
In an email to the Guardian he said: "Climate change is no longer something we can aim to do something about in a few decades' time, and that we must not only urgently reduce CO2 emissions but must urgently examine other ways of slowing global warming, such as the various geo-engineering ideas that have been put forward."
These include reflecting the sun's rays back into space, making clouds whiter and seeding the ocean with minerals to absorb more CO2.
Wadhams has spent many years collecting ice thickness data from submarines passing below the Arctic Ocean.
He predicted the imminent break-up of sea ice in summer months in 2007, when the previous lowest extent of 4.17-million km² was set.
This year, it has unexpectedly plunged a further 500 000 km² to less than 3.5-million km². "I have been predicting [the collapse of sea ice in summer months] for many years. The main cause is simply global warming: as the climate has warmed there has been less ice growth during the winter and more ice melt during the summer.
"At first this didn't [get] noticed; the summer ice limits slowly shrank back, at a rate which suggested that the ice would last another 50 years or so. But in the end the summer melt overtook the winter growth such that the entire ice sheet melts or breaks up during the summer months.
"This collapse, I predicted would occur in 2015-16 at which time the summer Arctic [August to September] would become ice-free. The final collapse towards that state is now happening and will probably be complete by those dates".
Wadhams says the implications are "terrible".
"The positives are increased possibility of Arctic transport, increased access to Arctic offshore oil and gas resources. The main negative is an acceleration of global warming."
"As the sea ice retreats in summer the ocean warms up (to 7°C in 2011) and this warms the seabed too. The continental shelves of the Arctic are composed of offshore permafrost, frozen sediment left over from the last ice age.
As the water warms the permafrost melts and releases huge quantities of trapped methane, a very powerful greenhouse gas so this will give a big boost to global warming." – © Guardian News and Media 2012