U.S. Coast Guard rescues crew of Kulluk on Dec. 29. Photo credit: U.S. Coast Guard

Shell Oil’s drilling rig that ran aground last week during rough weather has finally been towed away from the shore. The Kulluk, an offshore drilling rig with no propulsion engine of its own, ran aground on a remote Alaskan island on New Year’s Eve after choppy waters and high winds caused the tug boat that was carrying it to lose control. Initially raising alarm because of the 143,000 gallons of diesel fuel on board, the Kulluk has seemingly escaped major damage.

The Kulluk, a $290 million platform acquired and refurbished by Royal Dutch Shell in 2005, is central to the company’s Arctic oil and gas exploration activities. Of the major international oil companies, Shell is moving aggressively into the Arctic for oil development, and it has already spent around $5 billion thus far without yet completing a well.

Last week, Shell was moving the Kulluk to a port in Seattle for the winter when the ship ran aground due to hazardous weather conditions. The incident is only the latest in several missteps by Shell in its quest to drill in the Arctic. In July, The Noble Discoverer, another of Shell’s drilling ships, slipped its anchor in Unalaska Bay and drifted towards the shore. While no injuries or damage occurred, the incident raised concerns about Shell’s operations.

Also, Shell has struggled to satisfy all the regulatory hurdles needed to allow it to move forward. In order to obtain the necessary permits, Shell is required to have an oil spill containment vessel on hand to respond to a hypothetical well blowout. Shell was forced to scale back its plans to drill in 2012 after its spill containment dome was “crushed like a beer can” during tests.

While seemingly minor incidents, the cumulative effect is taking its toll. Environmental groups are trying to capitalize on Shell’s failures. Oceana’s Deputy Vice President stated in a press release, “Shell is obviously not prepared for Alaskan waters.  The Kulluk accident began in weather conditions for which any reasonable operator should have been ready.”

Moreover, the incident has gained the attention of some members of Congress. A group of 45 Democrats in the House are calling on the Department of Interior to investigate what went wrong with the Kulluk, raising pressure on Shell.

Still, Shell will press on because the energy resources are potentially huge. The U.S. Geological Survey estimates that the Arctic holds 22% of the world’s undiscovered energy resources. An estimated 30 billion barrels of oil are said to be located off the coast of Alaska alone (for more information on Arctic energy reserves, check out ASP’s fact sheet “Artic Climate and Energy”). The latest setbacks, the company asserts, will not alter its drilling plans for 2013.

Nick Cunningham wrote a report about the risks of offshore oil drilling in the artic, which you can read here. 

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