Saturday, January 05, 2013

More trouble for Shell Oil's drilling operations in Alaska. Update!

Courtesy of CBS News:  

CBS News has learned that the U.S. Coast Guard has called in their criminal investigators to probe potential violations of federal law involving the activities of a 572-foot oil drilling and exploration ship owned by the Noble corporation, and contracted by Royal Dutch Shell to search for oil in the arctic. Royal Dutch Shell owned the drilling rig, the Kulluk, that ran aground in rough Alaskan seas Monday. 

The revelation that another Noble ship working for Shell may have been operating with serious safety and pollution control problems bolstered allegations from environmental activists that the oil industry is unable to conduct safe oil drilling operations in the Arctic Ocean. 

The Coast Guard conducted a routine marine safety inspection when Noble's Discoverer arrived at a Seward, Alaska port in late November. The inspection team found serious issues with the ship's safety management system and pollution control systems. The inspectors also listed more than a dozen "discrepancies" which, sources tell CBS News, led them to call in the Coast Guard Investigative Service (CGIS) to determine if there were violations of federal law. 

Sources told CBS News that when criminal investigators arrived, the Noble Discoverer's crew had been provided with lawyers and declined to be interviewed.

The whole crewed lawyered up?  Oh no, NOTHING to hide there!

And of course THIS news is on the heels of the serious problems going on with the Kulluk, the oil ship currently stranded off of Kodiak island.

I see some serious fines coming Shell Oil's way.

You know if I were in charge of Shell Oil's arctic oil research department, I might be advising the powers that be to cut their losses and get the hell out of Alaskan waters while they still can.

Update: Rachel Maddow did a deep dive on this situation last night on her show.


  1. Anonymous7:07 AM

    New twist in stricken rig saga: Shell was moving it to avoid tax. The oil giant will instead suffer a multi-million dollar loss on the exercise after the rig ran aground off the Alaskan coast

    Shell’s ill-fated attempt to tow an offshore oil rig from Alaska to Seattle in the final days of December was motivated by a desire to avoid $7m (£4.3m) of Alaskan state taxes, it emerged today.

    But the oil giant will instead suffer a multi-million dollar loss on the exercise after the rig ran aground off the Alaskan coast on Monday night.

    The rig was beached during a violent storm on its way to a Seattle shipyard for routine maintenance, in a round-trip timed so that, thanks to an accounting loophole, Shell could avoid an Alaskan state tax.

    However, because the rig ran aground late on New Year’s Eve and began 2013 within three miles of the Alaskan coast, Shell remains liable for a unique state property tax on equipment dedicated to oil and gas development and exploration.

    Shell admitted today that its decision to move the rig, the Kulluk, just weeks after it was brought to the Gulf of Alaska in November, was motivated by financial considerations.

    “It’s fair to say that the current tax structure related to vessels of the type influenced the timing of our departure. It would have cost Shell multiple millions to keep the rigs here,” a Shell spokesman said.

    Another Shell spokesman, in London, said: “While we are aware of the tax environment wherever we operate, the driver for operational decisions is always governed by safety. In this case, what mattered most to Shell was the two-week window of favourable weather that was forecasted for that journey.”

    He denied suggestions that the routine maintenance and inspection could have been carried out in Alaska.

    David Gregory, a councillor for the city of Unalaska, said Shell’s equipment tax bill would come to between $6m and $7m, adding: “Maybe they should have just stayed there.”

    In addition to the tax, Shell faces millions of dollars of charges including the cost of repairs. It must also reimburse the federal and state governments for an emergency response which involved more than 500 people, including the evacuation of the rig’s crew of 18 by Coast Guard helicopters in weather the Captain later described as “close to a hurricane”.

    Salvage experts flown to the rig concluded that none of the 139,000 gallons of diesel and 12,000 gallons of hydraulic fluids on board had been spilled. However, they cautioned that it was unclear how serious the damage was or how long it would take to refloat and move the Kulluk.

    For Shell, the incident is the latest in a series of setbacks in its costly pursuit of oil in the environmentally-sensitive Arctic region which is nonetheless regarded as the next great frontier for oil exploration.

    The Kulluk began its journey on 21 December and a week later was about 50 miles south of Kodiak Island – out of reach of the Alaskan tax man.

    But the tug that was pulling it suffered multiple engine failures just as a subtropical cyclone made its way into the North Pacific. On Monday night, in the dying hours of 2012, the rig ran aground about 1,600 feet from Sitkalidak Island, next door to Kodiak.

    Shell has so far spent £3.2bn buying up leases and on exploratory drilling off Alaska’s north and north-west coasts but has yet to discover any commercial quantities of oil. Full-scale production in the region is still thought to be years away.

  2. Anonymous7:29 AM

    Can anyone produce a map that shows where this rig is along the Alaskan shore line. Where it was before the move and where it was going? Alaska is a big state and we in the lower 48 are not all that familiar with the area. Thank you.

    1. Can anyone produce a map that shows where this rig is along the Alaskan shore line.

      The tip of the "A" symbol in the map linked to below indicates Sitkalidak Island. The larger island that most of the "A" is on top of is Kodiak Island. To the NNE, near the top of the map, you should see Anchorage marked.


      To get this link, I went to, which I have bookmarked. I copy/pasted "Sitkalidak Island" (without the quote marks) into the Google Maps location field (not to be confused with the Firefox location field, though that will give you useful information too). Google Maps then offered me two choices: "Sitkalidak Island, United States" and "Kodiak Island, Sitkalidak Avenue, Old Harbor, AK, United States". I clicked on the first choice, and a map showing Sitkalidak Island appeared. I then clicked on the "-" on the map scale tool enough times to shrink the map until Anchorage was within the map area. Then I clicked on the Google Maps "link" icon (looks like three links of a chain) to bring up a display with the link you see above.

      If you were able to follow that, then the next time something like this comes up, you will be able to post the link yourself.

      Maps displayed by Google Maps include a scale of miles/kilometers, allowing locations like "about 50 miles south of Kodiak Island" and "1,600 feet from Sitkalidak Island" to be worked out.

  3. lostinmn7:42 AM

    Where's snowdrift Snookie on this? She's the oil expert isn't she?

    1. Anonymous8:51 AM

      Why bother? We already know her response:

      ¨The proverbial can´t return a phone call. The Dutch! They´re know for dikes.¨

  4. Anonymous8:22 AM

    Come on, Sarah, let's hear it for "Drill, Baby, Drill." In fact, "Drill here, drill now."

    1. She only says that when fucking Glen, Brad, or Curtis.

  5. Anita Winecooler8:41 PM

    Here's the link on Rachel's blog to CBS's coverage of "Noble".

    And we wonder why the GOP wants to gut the EPA? Big Oil has them by the short and curlies!

  6. Anonymous9:25 PM

    I want to know how the "Discoverer" was allowed to operate in Alaskan waters with such violations. My little sailor pea brain says they should have had a routine safety inspection before heading North to Alaskan waters.... before she sailed. Seems like the CG dropped the ball here a bit.
    VernD (USCG Retired)

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