A Department of Interior (DOI) report on Shell’s 2012 Arctic operations reveals inadequate management oversight and details key recommendations for conduct and oversight of future exploration projects.
On March 14, 2013, DOI released its 2012 assessment of Shell’s Arctic operations. The review identifies inadequacies that led to a series of problems related to containment system deployment, marine transport, and grounding of drilling rigs. DOI also provides key recommendations to recommencement of Shell’s drilling program and future exploratory activities in the Arctic. The U.S. Coast Guard is currently conducting a separate marine casualty probe to assess the currently grounded Kulluk drilling rig.
Shell’s 2012 operations were subject to Arctic-specific standards including deployment of a subsea containment system prior to drilling and measures to facilitate open-water emergency response; however, the company failed to obtain timely containment vessel certification and finalize vital components of its drilling program. Due to inadequate management oversight, the DOI, in January of 2013, directed another detailed review of the Shell’s offshore operations in the Beaufort and Chukchi Seas. In February 2013, Shell announced its decision to halt exploratory activity in order to address management and planning issues.
Among report recommendations, DOI asks Shell to submit a comprehensive drilling and maritime operations plan upon resumed exploration in the Alaskan Arctic. The report also calls for a third-party to audit operation management. The review emphasizes the need for an Arctic-specific model, and recommends continued safety and environmental improvements. It also expresses the need for coordination across federal, state, and local authorities, drilling companies, and communities to streamline permitting and exploration activities.
Alaska’s offshore resources offer opportunities to boost U.S. energy security while demonstrating safe exploration practices. However, exploration in the Arctic presents unique challenges related to climate, environment, subsistence needs of local communities, and limited infrastructure. DOI’s Arctic drilling review signifies the need for thorough preliminary work and robust management planning to oversee contractors and employ capable operators. The report recommends key steps toward implementing essential changes prior to approval of future offshore exploration projects.
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