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Shell Makes History in Chukchi Sea -- Drilling Now Underway

1st Time in 21 Years That Anyone Has Drilled Alaska's Arctic Waters, Searching for Oil

September 09, 2012|By Dan Fiorucci | Channel 2 News

ANCHORAGE, Alaska — This morning, (Sunday) Shell Oil has begun conducting an historic operation in the Chukchi Sea.

For the first time in more than two decades, the company has started drilling for oil in the Arctic Ocean -70 miles off the coast of Northwestern Alaska. It happened at 4:30 A.M., Alaska Daylight Time - when the drill bit first touched the sea floor.

The last time that Shell drilled the "Burger Prospect" was way back in 1991. Back then, the Chukchi Sea showed huge promise for oil, but it could not be drilled commercially. There were 3 main reasons for that.

For one thing, the Trans Alaska Pipeline was nearly full. There was simply no room in TAPS for additional oil.

For another, there was just no way to transport oil from the Chukchi -- 400 miles to the west -- to get it from the Arctic Ocean all the way to the Alaska pipeline.

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In fact, back then, there wasn't even a prospect of such a pipeline on the horizon. After all, it was just last month that the U.S. Department of Interior finally opened-up half of the National Petroleum Reserve - Alaska for oil development. Now plans to construct the line, the biggest pipeline since TAPS, finally have a realistic chance of swinging into high gear.

Another reason Alaska's Arctic Ocean could not be drilled commercially -- back in 1991 -- is that "directional drilling" technology simply did not exist back then. For every well you wanted to drill, you had to float a separate platform. That was not just undesirable from an environmental standpoint, it was also very expensive. Today a single platform can drill a web of wells for miles in all directions. That puts commercial drilling operations in the Chukchi within the realm of economic feasibility.

At any rate, half a dozen years ago, Shell saw the stars finally aligning for renewed drilling in the Arctic Ocean.  The company realised that with the Trans Alaska Pipeline operating at a quarter of its rated capacity, it was going to get a real chance at commercial drilling in the Arctic. So, around 2006, it began the most hi-tech seismic surveys of the area possible.

And now, after 6 years of preparation, 3 of those years spent on high-fidelity 3-D siesmic surveys of the Arctic Ocean around Alaska Shell has finally started drilling. All the years of preparation have already cost the company $4.5 billion -- and that provides some insight into just how promising Shell believes the area is.

Early Saturday the platform "Noble Discoverer" arrived on-station in the Chukchi. It had spent the previous week within shouting distance of its designated drill site. But high winds and heavy seas (from the very same storm-system that wreaked havoc in Anchorage this week) kept the "Disco" from moving into position.

However, by Saturday morning, the skies had cleared. And by Saturday afternoon, the platform had hooked-up to its pre-positioned anchors.

Crews aboard the vessel then placed Remotely-Operated-Vehicles, or R.O.V's into the water -- in order to scout a precise drilling location. The ocean floor, at that distance from Alaska, is part of the Outer Continental Shelf. So it's only 130 feet deep.

Environmentalists have cited a number of concerns for arctic drilling, but so far they have either lost their suits in various courts. At least one more environmental lawsuit is pending -- but it is still working its way through the court system.

The main environmental concerns are first -- that there is no proven technology for cleaning up an oil spill in ice-choked waters. In fact, even in tropical waters, major spills only see somewhere from 3 to 15 percent of spilled oil recovered. With floating ice, it is feared the recovery rate will be diminished, because floating ice can work its way beneath booms, lifting them -- and providing oil with a path to flow away.

Partly because of the concern that ice complicates oil containment, Shell has been limited to drilling in the short "summer" season. The company can drill only from now until September 24th only. After that, it must stop any further drilling -- and begin operations to "cap" its exploratory wells for the rest of the season.

Nevertheless, there is a chance that Shell's very narrow drilling window -- which, as of this writing only lasts for 15 days -- could be extended slightly this year. But, as mentioned, Secretary Salazar says he won't even consider such an extension until the oil-containment vessel "Arctic Challenger" arrives on the scene. Only then will he reconsider the matter. At this hour, the Challenger is sitting at a dock in Belllingham, Washington awaiting final certification from the U.S. Coast Guard.

Shell hopes to have the vessel certified sometime this week -- and will then immediately send it up to the Chukchi to rendezvous with the Noble Discoverer.

Upon its arrival, Salazar will entertain requests for a longer season.

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