Grounded rig Shell’s latest Arctic setback – by Carrie Tait (Globe and Mail – January 3, 2013)

Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

CALGARY — Royal Dutch Shell PLC is scrambling to develop a recovery plan for a grounded drilling rig and its toxic cargo, in what has become the latest flashpoint in the debate over the industry’s ability to safely operate in the environmentally fragile Arctic.

About 143,000 gallons of diesel fuel, as well as other petroleum products such as lubricants, is on the rig, which is stuck off the Alaskan coast. It was being pulled to Seattle for servicing when “near hurricane” weather and engine failures on the tugboat thwarted the voyage late last week.

Towlines separated earlier this week, and the emergency backup plan – towing it by the stern – also faltered. The Dutch company did not have a contingency plan if both towing blueprints failed.

While the grounded rig, named Kulluk, was not drilling when trouble struck, even its transportation woes demonstrate how difficult it is to operate in the Arctic. The vast region’s delicate ecosystems are a key point in the debate, with critics arguing it is impossible to safely extract hydrocarbons in the area and operators saying they can do so successfully and responsibly.

Despite the energy industry’s insistence it can drill safely, some are showing reluctance. Norway’s Statoil ASA, for example, recently said it would hold off its Alaskan Arctic plans until at least 2015 after watching Shell’s troubles there in 2012.

Shell said on Tuesday it is “picking up a lot of the cost.” The coast guard has not detected any spilled lubricants or diesel, which was on board largely to provide weight to steady the vessel.

Authorities running the emergency mission have not decided what to do with the rig.

“The unified command is going to look at a multitude of options and they are going to pick the safest and the best way to make sure there is not an environmental impact,” Mark Lutz, a spokesman at the joint command centre, said in an interview Wednesday. “So as far as guessing on which one they are going to do, I can’t really do that at this time.”

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/grounded-rig-shells-latest-arctic-setback/article6875944/

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