October 2, 2013

Arctic Drilling – can it ever be safe?

Author Leigh Williams.

It was reported last week that US officials are drafting proposed minimum standards for oil and gas activity in U.S. Arctic waters, partly with an eye to codifying some of the voluntary steps that Shell took during its 2012 drilling in the Chukchi and Beaufort seas north of Alaska.

The standards are due by the end of the year, giving companies with oil and gas leases in federal Arctic waters a chance to decide whether they want to pursue drilling next year. Shell Oil, which took a pause this summer while its Arctic drilling rigs are repaired in Asian shipyards, has said it aims to return to the region in 2014.

It is worth reflecting on the unique challenges posed by operations in the Arctic and whether drilling there can ever be truly safe.

There are five main issues with hydrocarbon exploration and production in the Arctic from a pollution perspective.

First, the harshness and instability of the operating environment which will tend to cause mistakes and equipment failures to happen more frequently than in a normal environment.

Second, ensuring rigorous adherence to safety regimes and transparent reporting of incidents to ensure an effective response. This may be easier in some territories than others.

Third, an incomplete understanding of what pollution containment techniques are effective in the Arctic.

Fourth, the lack of infrastructure to support an effective containment operation when there is a spill in the Arctic.

Fifth, an incomplete understanding about the environmental impact of an oil spill in the Arctic.

The lack of infrastructure to deal with a pollution incident is probably the most serious issue. The point is illustrated by the resources that were available and were used to deal with the Macondo spill. According to BP’s website: “At its peak, the response [to Macondo] involved the mobilization of approximately 48,000 people, the coordination of approximately 6,500 vessels and the deployment of approximately 2,500 miles of boom to contain or absorb the oil. BP employees and retirees brought their expertise from all parts of the business, from around the world to the response effort“.

By contrast, in the Arctic, there is essentially no real infrastructure to speak of. It would simply be impossible to mobilise anything approaching the number of craft and personnel to deal with a serious spill in the Arctic. For example, the response fleet for the Shell exploration venture in Alaskan waters consists of less than 10 vessels and a capping device to deal with a ‘worst case scenario’. This is not to suggest that the fleet is bound to be ineffective. However, it demonstrates what is economically and physically possible. If the Deepwater Horizon is a ‘worst case scenario’ and required tens of thousands of personnel and thousands of vessels to bring it under control, it is perhaps questionable whether, had it occurred in the Arctic, it would ever be brought under control.

As anywhere, but particularly the Arctic, the focus has to be on safety and minimising the risks of a spill. It would only take one major incident for exploration and production to be put in jeopardy forever. Given the potential for catastrophic environmental damage, it makes sense for the Arctic states jointly to develop and enforce uniform standards of minimum best practice. It is important that knowledge is shared and there is transparency between the Arctic states. What has to be avoided is one state trying to gain advantage over the others by permitting lax operating standards or dealing inadequately with, or worse, covering up environmental damage.

If you found this article useful, please share it using the buttons below.