Stranded rig lands Shell in hot water over Arctic drills

Oil multinational Shell came under fresh criticism for its Arctic drilling programme off the north coast of Alaska last month after one of its rigs ran aground while being towed to port for maintenance.

The Kulluk rig was parted from its ship during a storm and became stranded near the rocky shoreline of Sitkalidak island, off southern Alaska. Kulluk is carrying 143,000 gallons of diesel and 12,000 gallons of lubricating oil and hydraulic fluid.

Any leak would pollute the waters and threaten coastal wildlife, including endangered sea lion and otter species, and more than 250 bird species. A 600-strong team, led by US government workers, is trying to make the Kulluk safe.

Greenpeace has been closely watching developments in the Arctic and, as if to illustrate the sensitivity of Shell’s operation there, high-end UK supermarket chain Waitrose has dropped links with the company.

The Kulluk is the second rig to cause concern in Shell’s Arctic programme. The Noble Discoverer drifted off in July – and Shell’s drilling contractor Noble Corporation revealed that the US Coast Guard had previously warned about ‘deficiencies and maintenance issues’ on the rig.

The latest setback is the third to hit the project. Shell was refused permits during the summer to drill into oil-bearing rocks because its containment system, its ‘fourth line of defence’ in a spill, failed to win approval from US regulator, the Bureau of Safety & Environment Enforcement.

A valve developed an electrical fault during testing and the dome was accidentally dropped into the water. The bureau said part of it was ‘crushed like a beer can’. So far, the $4.5bn (£2.8bn, e3.36bn) Arctic project has produced no oil wells.

Greenpeace campaigner Ben Ayliffe said of the Kulluk incident: “This is yet another example of how utterly incapable this company is of operating safely in one of the planet’s most remote and extreme environments.”

US Congressman Ed Markey, the leading Democrat on the natural resources committee, observed: “Oil companies keep saying they can conquer the Arctic, but the Arctic keeps disagreeing. Drilling expansion could prove disastrous for this sensitive environment.”

Shell tried to allay fears over the Kulluk by emphasising that it had a hull of reinforced 3in-thick steel, and that it had been improved to the cost of $292m. The company also said it had ‘tweaked’ the equipment that developed an electrical fault and had performed structural work on the dome to prevent further problems.

In the Noble Discoverer case, the drilling company said it had resolved some of the problems on the rig and was working on others.

Despite the setbacks, Shell hopes to start drilling in July.