April 04, 2014

"New findings further complicate the oil industry's efforts to launch a new era of exploration in Arctic..."

National Geographic 'Shell's drilling rig, Kulluk, ran aground off the coast of Alaska in late 2012 due to the company's "inadequate assessment and management of risks" in icy, storm-tossed waters, said the U.S. Coast Guard on Thursday in its final report on the accident.' by Marianne Lavelle

'The new findings further complicate the oil industry's efforts to launch a new era of exploration in Arctic, which is estimated to hold 13 percent of the world's undiscovered oil and 30 percent of its undiscovered natural gas. (See related "Quiz: What You Don't Know About Energy in the Changing Arctic.") The Kulluk accident occurred weeks after Shell* made the first foray into drilling in U.S. Arctic waters in two decades, an effort forestalled by equipment troubles and advancing ice.  (Related: "Ice-Breaking: U.S. Oil Drilling Starts as Nations Mull Changed Arctic")

'The Coast Guard concluded that Shell made an ill-advised decision to tow its drill rig away from the state, a 1,700-nautical-mile journey across the northern Gulf of Alaska in the final days of December 2012, in part to avoid millions of dollars in tax liability. Under state law, the tax would be assessed on January 1, 2013 if the vessel was still in Alaska waters, the Coast Guard report noted.

'The Kulluk could not move under its own power, but had to be towed. The Coast Guard detailed the missteps aboard its tow ship, the Aiviq, and how its fuel tanks were improperly configured, leading to contamination, most likely by seawater. According to the Coast Guard report, the Aiviq tow master sent an email to the Kulluk tow master before the journey: "To be blunt I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an ass kicking."'

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