Royal Dutch Shell Group .com Rotating Header Image

Shell’s biggest regulatory challenges in Arctic Alaska may yet lie ahead

Alex DeMarban | Jul 02, 2012

Editor’s note: This is the third installment of a three-part series regarding Shell’s upcoming offshore activity in Alaska’s Arctic region.
Part 1: Shell readies to roll dice on multibillion-dollar bet in Arctic.

A chunk of ice the size of a small stadium, perhaps a rogue remnant of a distant ice island, recently ground ashore near the Northwest Alaska village of Wainwright, providing a textbook example for the kind of subsea phenomena Royal Dutch Shell must watch for as it considers where to build hundreds of miles oil pipelines.

Those pipelines won’t be built unless the Netherlands-based oil giant finds a huge cache of oil — a very real prospect, given Shell is giving itself 1 in 2 odds it could discover commercial quantities of crude off Alaska’s northern coastline.

The company is set to begin exploratory drilling in the coming weeks after years overcoming legal and regulatory hurdles. And one thing Shell is studying extra closely: Masses of ice whose underwater keels can potentially shred the seafloor and anything in their way, including an oil pipeline running to Alaska’s shores.

Contracting with ice experts, Shell officials are studying underwater images dating back to the 1980s to make sure they choose a safe route for any pipeline the company might build in the future. Along with finding the route is making sure the line is buried deep enough to avoid what’s known as “ice gouging.”

The oil company hasn’t drilled an exploratory oil well off Alaska’s coast since the 1990s, but it’s likely to start drilling up to five wells this summer in the Arctic Ocean’s Beaufort and Chukchi seas. Already looking beyond exploration, Shell has spent tens of millions of dollars studying potential routes for what could be at least 350 miles of pipelines to carry its offshore crude under sea, across the tundra, and linking up to the 800-mile trans-Alaska pipeline that carries about 13 percent of U.S. domestic oil production.

“It’s almost (as big a project as building) another trans-Alaska pipeline,” said Erling Westlien, a lead environmental engineer for the pipeline project.

Indeed, with an expected price-tag near $50 billion according to one energy analyst, it would be the largest oil pipeline system built since the trans-Alaska pipeline, which transports crude from the state’s Arctic oil fields southward to Prince William Sound, where the oil is loaded on tankers and shipped to markets. At peak construction in the 1970s, it employed more than 20,000 construction workers.

Shell’s pipeline project takes on a new dimension, given it must also run under the seafloor in the U.S. Arctic, an area that has never been developed for oil production. Shell officials say plans to build the pipeline and the construction of massive at-sea platforms could touch off the nation’s largest environmental impact statement ever, sparking legal opposition from environmental groups and Alaska Natives opposed to the project.

If history is any guide, the gargantuan undertaking could take years before work even starts.

Litigation, environmental debates and acts of Congress

Efforts in the 1970s to build the state’s “main vein,” as some refer to the trans-Alaska pipeline, stalled for years because of environmental battles and Alaska Natives who demanded they should have title to land the pipeline would cross.

The ruckus reverberated across Alaska and the nation, leading to the federal government’s largest-ever land claims settlement with the country’s aboriginal people. Alaska Natives won the right to form scores of regional and local corporations endowed with 44 million acres of land and nearly $1 billion.

With the passage of land claims legislation, environmental suits remained the final barrier to construction on the trans-Alaska pipeline. It was Alaska’s late U.S. Sen. Ted Stevens who fought for a bill to classify the project a national security priority — not a hard sell in the politically charged atmosphere caused by the Arab oil embargo of 1973 — and thus rendered moot lawsuits filed as delaying tactics. In one of history’s rare Senate deadlocks, it was Vice President Spiro Agnew, presiding as Senate president, who broke a tie vote and thus authorized pipeline construction to proceed.

Building Shell’s massive pipeline today could make those struggles of the 1970s seem small. “The nation is more litigious today, not less,” notes Curtis Smith, Shell’s Alaska spokesman.

Westlien estimates it could be another decade or longer before Shell could begin shipping oil through its lines and the larger trans-Alaska pipeline because of the nearly certain legal battles the company and, perhaps, government agencies would face during the approval process for the project.

On both water and land, Shell would encounter numerous regulations, including those meant to protect several animals listed under the Endangered Species Act, including the bowhead whale, the iconic polar bear, even the spectacled eider. Because of the threat climate change poses to the Arctic, more animals, including ringed seals, are in line to get those protections, which could further complicate the pipeline’s approval process. And in the time it takes to build a pipeline, the regulatory rules could also change.

Lois Epstein, an engineer and member of the Interior Department’s Ocean Energy Safety Advisory Committee, says Shell has raised the bar on oil-spill prevention, including committing to having sophisticated blowout preventers to slice through the well pipe and shut off the well, should drilling operators encounter a problem. But other companies eyeing offshore drilling in Alaska’s Arctic may not follow Shell’s lead, says Epstein, Arctic program manager for The Wilderness Society.

The Bureau of Safety and Environmental Enforcement needs to set Arctic standards for all oil development. It should include such protections as blowout preventers with backup shear rams like Shell is using, as well as double-walled pipes, top-notch leak-detection systems, and frequent shutoff valves to isolate spills along section of pipes, Epstein says.

Shell is still studying pipe design but will select the safest plan available that includes frequent and regular shutoff valves along the pipe, Smith says. “Everything we have done is the gold standard,” he says. “We’ll bring that same technical experience and expertise to a pipeline.”

Pipeline routes

Shell is searching for oil in both the Chukchi Sea to the northwest of Alaska and the Beaufort Sea to the northeast. If it finds enough oil in each location, it will pursue construction of two pipelines.

Possible scenarios include:

–In the Chukchi, a subsea pipeline would snake 70 miles to the southeast, coming ashore somewhere near the Iñupiat village of Wainwright. From there, the line would travel east more than 250 miles, likely through the National Petroleum Reserve-Alaska (NPR-A) — an area about the size of Indiana — and link up to the trans-Alaska pipeline.

–From the Beaufort Sea prospect, an offshore pipeline route would head 20 miles south to somewhere near the Point Thomson oil and gas field, and then head west about 22 miles west of an existing pipeline at an oil field known as Badami. From there, it would link up to the trans-Alaska pipeline.

Shell is studying a variety of potential corridors, Westlien says.

The company in recent years has focused most of its ground studies on the Chukchi route, in part because that’s the longer of the two pipelines, he says. Any land route, it seems, would travel through the 23.5-million-acre NPR-A, a tract of undeveloped land larger than the 19-million-acre Arctic National Wildlife Refuge that lies well to the east.

The U.S. Bureau of Land Management is currently considering a new management plan for NPR-A — created by President Harding in the 1920s as an oil warehouse for the U.S. Navy — and whether to enhance or ease restrictions. The area is home to Teshekpuk Lake, a world-class nesting ground for migrating waterfowl — a battle ground for environmental groups opposed to oil development in that part of the reserve.

Fighting the ice

Whatever routes Shell chooses for its lines, sea ice will be a nemesis. The ice has already delayed plans this year. The company hoped to moves its two drilling rigs and flotilla through the Bering Strait by July 1. But unusually late sea ice in the strait and around the company’s prospects delayed those plans, and the fleet is bound for Dutch Harbor, an Alaska fishing town still hundreds of miles from the Arctic.

The Bering Strait is Alaska and Russia’s gate to the Arctic Ocean, an area that’s home not to icebergs, but to powerful sea ice hemmed in by the narrow channel. That ice becomes denser and tougher each summer because the brine melts out.

Even if Shell for some reason decides not to build pipelines — perhaps it chooses to load tankers at sea (something it is currently not considering) — the company’s production plans must still contend with sea ice. That’s because Shell plans to process raw product into pipeline-grade crude on permanent, at-sea platforms rising 100 to 150 feet from the seafloor.

“Brute-force engineering” is how one Shell official described how such a platform, built of concrete or steel, would overpower massive blocks of ice. It would house the pipes extending into the ocean floor. A huge base, maybe 400 feet wide, as well as foundation structures known as skirts sunk into the seafloor, would help stabilize the platform against colossal sea-ice forces.

The company began thinking about building such platforms in the region in the 1980s and 1990s, when it drilled some 30 wells in the Beaufort and Chukchi seas, sometimes in the same prospects Shell is preparing to drill this summer. That first round of exploration, as well as work done by other past explorers, gives Shell a multi-decade view of the way ice has impacted the regions, company officials say. They’re studying long-term data that includes records of seafloor soundings, ice-gouging patterns, and the flow of ice on the ocean.

One area of focus are the sea ice keels that have tilled patterns into the floor somewhat resembling raked sand in a Japanese garden, Westlien says.

The company has good data, but it wants to know more, says Ziba Morisi, pipeline development manager for the Alaska project. Shell will take a conservative approach to how deep it must bury its pipelines, with a safety factor taking it much deeper than the known depth of gouges.

“We do as much as we can to make sure we don’t have to worry about that piece of equipment for 20, 30, 40 years,” Morisi says.

What if an ice keel shreds an oil pipeline? Morisi would not say what depths Shell is considering to sink its pipelines, but it would be deep enough to keep collisions “minimal.”

SOURCE

Along with burying the lines extra deep along the safest route, Shell would have the capability to shut down operations and stop the flow of oil. The chance of such mistake is very small, said Smith.

Other options the company is considering include deploying icebreakers to force aside rogue ice floes, Morisi says.

“We don’t want to break the ice per se, but if it’s within the capacity of an ice breaker, it can push it or get it out of the way,” she says.

The company is already closely tracking ice movements and will continue doing so, using such technology as satellite imagery and aerial observation. Through satellites, the company watched over weeks the wayward ice that may have broken from an ice island and grounded near Wainwright.

Late last week, Shell sent a team to measure that ice’s vitals. After it had grounded in about 100 feet of water, the team found the width was the size of a football field, with the ice rising from the sea by as much as a three-story building. It had apparently found its way to Alaska through the Barrow Canyon, a subsea feature that begins near Wainwright and runs along the Chukchi Sea coastline. It may have acted like a sort of track guiding the ice chunk toward shore.

On Monday, Shell officials were still studying the event and trying to look at the gouge apparently left behind by the ice sheet, Smith says.

Smith, Shell’s spokesman, said it’s extremely unlikely a pipeline will be ruptured by an ice keel. As for all safety standards, Shell will continue to push the envelope.

“She can watch Shell,” he said of Epstein and her desire to create Arctic regulations for all oil companies. “I can guarantee whatever we do will be to the highest level of quality.”

Contact Alex DeMarban at alex(at)alaskadispatch.com

This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Comments are closed.