A Dangerous Gamble in the Arctic

by Bill Meadows

The Arctic recently sent a strong warning that hubris has no place in one of the world’s most challenging, high-stakes environments. Shell Oil, which is ready to take a dangerous drilling gamble in the Arctic’s icy waters, should take note.

In mid-February, the Spanish company Repsol suffered a blowout at its onshore Qugruk 2 well on Alaska’s North Slope. Drillers hit a pocket of gas more than 2,500 feet beneath the surface. Natural gas and an estimated 42,000 gallons of drilling mud spewed from the well, and workers evacuated the rig to avoid the risk of an explosion or fire. After nearly a month of trying to bring the well under control — made more difficult with temperatures so cold it was impossible to operate outdoor equipment — Repsol decided to plug and abandon the well. Drilling mud cleanup will begin now that the well has been plugged.

After the blowout, the well’s hydraulic lines and other components quickly froze in the frigid Arctic air. Despite losing its well, Repsol was lucky; no workers were injured or killed, and no oil was spilled. Things could have been much worse.

Despite state approval of the Qugruk 2 drilling and a local drilling contractor performing the work, both Repsol and state regulators were surprised when the well hit the gas pocket that caused the blowout. Repsol personnel and experts from Texas-based Wild Well Control were unable to stop the blowout or “kill” the well because of the frozen mud and equipment. Nevertheless, Repsol is intent on drilling a nearby offshore well during the next few weeks — and the state might allow the company to do so — without a full understanding of what went wrong with Qugruk 2.

The lessons to be learned from this incident are simple: 1. Drilling companies cannot control the extraordinarily harsh Arctic conditions that can make it difficult to protect workers, regain control of a blowout, or recover lost oil and muds, and 2. All blowout control equipment and personnel should be located in the Arctic and proven to work under Arctic conditions.

Shell — which is seeking federal approvals to drill in the Arctic Ocean during the summer of 2012 — says it could quickly stop a blowout in the Arctic Ocean and recover 95 percent of spilled oil even though only single digit percentages of oil have been recovered after spills in temperate parts of the world. We heard the same confidence on blowouts and cleanup operations from BP prior to the Gulf spill in 2010. Shell officials also say they can operate safely in the frigid, stormy Arctic Ocean, a remote region with limited spill-response infrastructure. Seriously, how will Shell handle a major spill and offshore cleanup during a period of high winds, rough seas, and rapid ice formation that can occur during “open water” months like October? And how will they evacuate workers during conditions when helicopters can’t fly?

In recent days, members of the British Parliament expressed dismay after Shell admitted it will not have time to test a well-containment system in ice-filled waters before drilling in the Arctic Ocean. The MPs showed more candor than we typically see from many members of Congress who are eager to promote the development of American oil resources. British lawmakers said that oil companies are planning to cope with a spill using containment devices, dispersants and burning without knowing if those methods would work in the Arctic.

MP Caroline Lucas was quoted in the Guardian on March 14 as saying that oil company executives appear to be complacent about the chance of a major spill:

There is no reason to believe that any lessons have been learned from the Deepwater Horizon blowout. They seem to be shutting their eyes and crossing their fingers that they will not have a spill and it beggars belief that they are not able to tell shareholders how much it would cost to deal with a worst case scenario.

The Arctic Ocean is one of the most remote and challenging environments in the world, and requires extreme diligence, careful planning and great humility for any company attempting to operate there. Shell appears to be lacking all three. Unfortunately, the Arctic Ocean isn’t a poker table, where hubris can sometimes make up for bad cards. In the Arctic, overconfidence can lead to disaster.

The federal government should not allow Shell to gamble with the Arctic Ocean.

Posted: 03/21/2012 5:09 pm