Feds Slam Shell for 'Inadequate Assessment of Risks' During Trip to Arctic

ByEVAN SIMON ABCNews logo
Friday, May 29, 2015

Just weeks after the Obama administration approved Royal Dutch Shell's plan to resume drilling in the Arctic, a federal agency has concluded the oil giant failed to properly assess risks during the company's last trip to the icy region in 2012.

The report, released Thursday by the National Transportation Safety Board, asserts Shell is "ultimately responsible" for the nearly disastrous grounding of the Kulluk oil rig off the coast of Alaska in 2012. The Kulluk was carrying 143,000 gallons of diesel fuel and 12,000 gallons of other petroleum products when its towing operations failed, leaving the motorless vessel drifting in volatile arctic waters before eventually slamming into Kodiak Island off the Alaskan Coast. A disastrous oil spill was avoided in part because of the quick response of rescue crews which were able to tow the rig to safety. Nonetheless, authorities blame Shell for the grounding.

"The probable cause of the grounding of the mobile offshore drilling unit Kulluk was Shell's inadequate assessment of the risk for its planned tow," the NTSB said before adding that Shell and its contractors should have "either mitigated those risks or departed at a time of year when severe weather was less likely."

Royal Dutch Shell did not immediately respond to ABC News' request for comment. But the company has repeatedly stated that its 2012 problems were tied to transportation issues, not drilling, and that the Obama administration's approval signals the confidence regulators have in their plan. Shell spokesman Curtis Smith wrote to the Associated Press by email, saying the company is reviewing the report but has already made changes and "engaged extensively with the regulators on that topic."

The NTSB report asserts the potential hazards facing the Kulluk's route were known to Shell and its contractors, but the oil giant went ahead with its plan anyway. In a blunt passage, the report states that a tow master sent an email to Shell officials warning them of the dangers of their proposed route.

"I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an ***kicking," the email read, according to the NTSB report.

The report is the latest to critique Shell's history in the arctic.

In 2013, the U.S. Interior Department released a report saying that Shell's difficulties in the Arctic "raised serious questions regarding its ability to operate safely and responsibly in the challenging and unpredictable conditions offshore Alaska." The report recommended the company halt drilling until all safety issues were addressed. Then in 2014, the U.S. Coast Guard issued its own report on the Kulluk incident, which found that it was caused by the company's "inadequate assessment and management of risks." Finally in 2015, The Bureau of Ocean Energy Management, the agency that approved Shell's plan for drilling in the Chukchi Sea, stated in a February report that there was a "75% chance of one or more large spills" occurring in the area over the next 77 years in addition to hundreds of "minor spills" if oil exploration was expanded in the region.

For years, Shell has eyed the icy waters of the Chukchi Sea for its oil reserves, a remote area off the coast of Alaska, considered by both environmental groups and industry officials to be one of the riskiest places in the world to drill for oil. The closest Coast Guard station with equipment for responding to an oil spill is over 1,000 miles away, making it difficult for rescue and cleanup crews to reach the area in the event of an accident.

Thursday's NTSB report was released the same day President Obama took to his personal Twitter account to answer questions about climate change, where he defended his decision to grant Shell permission to resume drilling in the Arctic.

"But since we can't prevent oil exploration completely in region we're setting the highest possible standards," Obama wrote. The president also pointed out that his administration had rejected an earlier plan submitted by Shell and has already shut off the most sensitive Arctic areas to drilling.

Critics argue preventing oil exploration in the Arctic is well within the president's powers, calling on Obama to place a drilling moratorium on the Chukchi Sea or declare it a marine sanctuary.

Just last week, Alaska saw temperatures in the 90s, shattering previous records for the state's hottest day this early in the summer, according to the National Oceanic and Atmospheric Administration.

"Shell helped melt the Arctic and now they want to drill in the thawing waters; it beggars belief that the Obama administration is willing to abet what amounts to one of the greatest acts of corporate irresponsibility in the planet's history," Bill McKibben, co-founder of 350.org, an environmental advocacy group, said in a statement earlier this month.

Shell has said it hopes to return to the Arctic this summer, pending necessary permits from state and federal agencies.

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