Shell gets nod to drill into oil-bearing zones offshore Alaska

Shell has obtained an approval to go deeper, into oil-bearing zones, with its exploration in the Chukchi Sea, offshore Alaska.

Bureau of Safety and Environmental Enforcement (BSEE) Director Brian Salerno on Monday announced that Shell received approval of one Application for Permit to Modify (APM) to conduct exploratory drilling activities into potential oil-bearing zones offshore Alaska at one of the wells at the Burger Prospect, Burger J. The company remains limited to the top section of the Burger V well.

Shell submitted an APM on August 6 to modify the Burger J Application for Permit to Drill (APD), which previously restricted Shell from drilling into oil-bearing zones since a capping stack was not on hand and deployable within 24 hours, as required by BSEE. The reason the capping stack was not available is that the vessel carrying it the MSV Fennica, was damaged and had to turn around for repairs in Portland, Oregon.

A capping stack is a critical piece of emergency response equipment designed to shut in a well in the unlikely event of a loss of well control. The capping stack is now in the region and capable of being deployed within 24 hours.

“Activities conducted offshore Alaska are being held to the highest safety, environmental protection, and emergency response standards,” said Salerno. “Now that the required well control system is in place and can be deployed, Shell will be allowed to explore into oil-bearing zones for Burger J. We will continue to monitor their work around the clock to ensure the utmost safety and environmental stewardship.”

No simultaneous drilling

Shell is still prohibited from simultaneous drilling at Burger J and V, in accordance with the approved APDs, which define limitations related to marine mammal protection consistent with requirements established by the U.S. Fish and Wildlife Service (USFWS). Consistent with regulatory requirements, a USFWS Letter of Authorization (LOA) issued on June 30 requires Shell to maintain a minimum spacing of 15 miles between active drill rigs during exploration activities to avoid significant effects on walruses in the region. Shell is using two rigs for the operation, the Polar Pioneer semi-submersible drilling rig, and the Noble Discoverer drillship.

Under the LOA, Shell is also required to have trained wildlife observers on all drilling units and support vessels to minimize impacts to protected species. Shell must stay within explicitly outlined vessel operating speeds and report daily regarding all vessel transits.

To ensure compliance with this and other conditions, BSEE safety inspectors have been present on the drilling units Noble Discoverer and Transocean Polar Pioneer 24 hours a day, seven days a week to provide continuous oversight and monitoring of all approved activities. The inspectors are authorized to take immediate action to ensure compliance and safety, including cessation of all drilling activities, if necessary. BSEE experts have been engaged in thorough inspections of both drilling units and Shell’s response equipment, the BSEE said in a statement.

The Burger Prospect is located in about 140 feet of water, 70 miles northwest of the village of Wainwright.

BSEE says that all phases of an offshore Arctic program – preparations, drilling, maritime and emergency response operations – must be integrated and subject to strong operator management and government oversight, as detailed in Shell’s Integrated Operations Plan;

A shortened drilling season to allow time for open-water emergency response and relief rig operations late in the drilling season before projected ice encroachment;

• Capping stack must be pre-staged and available for use within 24 hours;
• A tested subsea containment system must be deployable within eight days;
• The capability to drill a same season relief well;
• A robust suite of measures to avoid and minimize adverse impacts to marine mammals and their habitat, impacts to Native subsistence activities, and other environmental impacts; and
• Drilling units and their supporting vessels must depart the Chukchi Sea at the conclusion of each exploration drilling season.

Environmentalists not happy

As expected, the conservation groups have reacted negatively to Shell receiving final drilling permit for the Burger J well, saying the decision should not have been given due to a risk of a major oil spill in the Arctic.

In response, Sierra Club Executive Director Michael Brune said: “President Obama’s decision to grant Shell the final drilling permits goes against science, the will of the people, and common sense.”

“We are witnessing a growing movement against drilling in the Arctic Ocean. There’s a 75-percent chance of a major oil spill if Shell drills in the Arctic, and a 100-percent chance of further climate disruption. That’s why hundreds of thousands of Americans have stood-up and said ‘Shell No’ to drilling in the Arctic.”

“Granting Shell the permit to drill in the Arctic was the wrong decision, and this fight is far from over. The people will continue to call on President Obama to protect the Arctic and our environment,” Brune said.

Lois Epstein, an Alaska-licensed engineer and Arctic program director for The Wilderness Society issued the following statement:

“With all due respect, this drilling permit does not hold Shell to ‘the highest safety, environment protection, and emergency response standards,’ as BSEE stated today,” Epstein said.“The weak provisions in the permit, along with the industry’s inability to clean up major spills and its inability to rehabilitate oiled wildlife, provide a strong technical rationale for the Obama administration to disallow Arctic Ocean oil drilling. Not allowing Arctic Ocean oil drilling would have been the right technical decision.”

Below is a list of what Epstein thinks is wrong with Shell’s Arctic drilling plan for 2015:

• Shell will test its blowout preventers every 14 days instead of every seven.
• Shell will meet only the federal Bureau of Ocean Energy Management’s weaker air-quality rules instead of following the more stringent rules set by the Environmental Protection Agency.
• No wells will have a zero-discharge limit for contaminated drilling muds, compared to half the wells in 2012.
• Shell will no longer recycle toxic drilling fluids.
• The drilling plan does not contain critical habitat protections for polar bears.
• The risk of an oil spill affecting the sensitive western coastline of the National Petroleum Reserve-Alaska is doubled with two rigs operating in the Chukchi Sea.

Update

Regarding DOI’s approval, the U.S. Senator for Alaska, Lisa Murkowski, said: “Today’s announcement on the Interior Department’s final approval of Shell drilling in the Chukchi Sea is welcome news for Alaska’s economy and our nation’s energy security. Shell has spent years preparing to fully explore its leases in the Arctic offshore. The responsible development of those resources will create jobs and provide a badly needed long-term supply of oil for the trans-Alaska pipeline, ensuring that we continue to be a major energy supplier well into the future.”

Offshore Energy Today Staff