Salazar launches assessment of Shell Arctic drilling program

JANUARY 9, 2013 — The New Year’s Eve grounding of the drilling vessel Kulluk is just the latest in a string of problems faced by Shell in its Arctic drilling problem. Today, Secretary of the Interior Ken Salazar today announced that what he called “an expedited, high-level assessment” will “pay special attention to challenges that Shell encountered in connection with certification of its containment vessel, the Arctic Challenger; the deployment of its containment dome; and operational issues associated with its two drilling rigs, the Noble Discoverer and the Kulluk.”

The review is expected to be completed in 60 days and will be led by Bureau of Ocean Energy Management (BOEM) Director Tommy Beaudreau, who has been selected to serve as the Acting Assistant Secretary for Land and Minerals Management. The review will look at Shell’s safety management systems, its oversight of contracted services, and its ability to meet the strict standards in place for Arctic development. The Coast Guard will provide technical assistance for the review.

“Developing America’s domestic energy sources is essential for reducing our dependence on foreign oil and creating jobs here at home and the Administration is fully committed to exploring for potential energy resources in frontier areas such as the Arctic,” said Secretary Salazar. “Exploration allows us to better comprehend the true scope of our resources in the Arctic and to more fully understand the nature of the risks and benefits of development in this region, but we also recognize that the unique challenges posed by the Arctic environment demand an even higher level of scrutiny.”

During limited preparatory drilling operations last season, Shell constructed top-hole sections for one well each in the Chukchi Sea and the Beaufort Sea. Bureau of Safety and Environmental Enforcement conducted unprecedented oversight and had inspectors present onboard each Shell rig around the clock throughout those operations.

“The Bureau of Safety and Environmental Enforcement demands operators make safety at all levels at all times their number one priority, and we expect the highest level of performance from operators in the Arctic,” said BSEE Director James A. Watson. “As we oversee historic domestic drilling, BSEE will continue its unprecedented oversight of drilling activities in the Arctic and we will continue to hold anyone operating in public waters to the highest safety and environmental standards.”

The U.S. Coast Guard has also announced it has initiated a comprehensive marine casualty investigation of the Kulluk grounding. BSEE and the National Transportation Safety Board will provide technical assistance for the Coast Guard’s investigation.

Rear Adm. Thomas P. Ostebo, the Coast Guard 17th District commander, ordered a formal marine casualty investigation on Friday into the circumstances and contributing factors involved in the grounding of the drilling unit Kulluk on the southeast shore of Sitkalidak Island, Alaska on Dec. 31, 2012. A formal marine casualty investigation is convened when a vessel casualty has considerable regional significance, may indicate vessel class problems, or is the best means to assess technical issues that may have contributed to the incident.

The formal marine casualty investigation will be led by a Coast Guard investigating officer, with participation and support by the Bureau of Safety and Environmental Enforcement (BSEE) and the National Transportation Safety Board (NTSB) as technical advisers.

In accordance with statute, the formal investigation will probe every aspect of the incident, to include but not limited to the causes of the incident, whether there is evidence that any failure of material was involved or contributed to the incident or whether there is evidence of misconduct, inattention, negligence of willful violation of the law.

Additionally the investigation will evaluate factors associated with the Kulluk and its support vessels, and will determine as closely as possible:

• The cause of the accident looking at the full scope of all towing vessels, towing equipment, procedures and personnel involved;
• Whether there is evidence that any failure of material (either physical or design) was involved or contributed to the casualties, so that proper recommendations for the prevention of the recurrence of similar casualties may be made;
• Whether there is evidence that any act of misconduct, inattention to duty, negligence, or willful violation of the law on the part of any person holding a Coast Guard credential contributed to the casualties, so that appropriate proceedings against the credential of such person may be recommended;
• Whether there is evidence any person caused or contributed to the cause of the casualties including the planning and subsequent review of the Kulluk’s tow plan.

The Coast Guard marine casualty investigation likely will take several months to complete due to the extent and depth of its inquiry. It says that the findings of the investigation will position the Coast Guard to take appropriate remedial action to address the factors that contributed to the casualty.