We’re celebrating Shell’s announcement that the drilling programme in the Alaskan Arctic has been halted for the year! Here are a few perspectives on why this has happened and what’s going to happen next…
1) Company public relations describe this as an effort to ensure the drilling is safe:
“Shell remains committed to building an Arctic exploration program that provides confidence to stakeholders and regulators, and meets the high standards the company applies to its operations around the world,” – said Shell’s President Marvin Odum. “We continue to believe that a measured and responsible pace, especially in the exploration phase, fits best in this remote area.”
2) The media relate the pause to the series of mishaps of the past year, as a result of which Shell has had to send both of its rigs, the Noble Discoverer and the Kulluk, to the other side of the planet for repairs.
3) A letter sent last week by Senator Ed Markey to Odum reveals sixteen violations of environmental and safety regulations on the drillship Noble Discoverer – including regular backfiring in the exhaust system that resulted in an explosion audible around the harbour in Unalaska and a fire in the stack of the ship.
4) This temporary halt is thanks to an unprecedented amount of public pressure – which drove the political shifts in Washington and made space and called attention to the scrutiny of the Coast Guard. Greenpeace UK director John Sauven:
Shell’s multi-billion dollar Arctic investment lies in tatters tonight, and so does the company’s reputation. They were warned again and again that they’d underestimated the huge challenges posed by drilling off Alaska, but they pushed on regardless, determined to spark a new Arctic oil rush. The huge global movement that sprang up to oppose them can claim vindication, but we’re not going away. We’ve drawn a line in the ice, we’ve said to the oil companies ‘you come no further’. Shell got burned in the Arctic this year, but when they try to come back we’ll be waiting for them, and if the Obama administration doesn’t stop them drilling then millions of us will.
5) Of course, the company are not planning to stop entirely. According to BusinessWeek quoting Curtis Smith, a Shell spokesperson,
The company had planned to spend $800 million in Alaska this year, and costs are “likely to remain substantial.”
6) Overall the company has spent about $4.9 billion over seven years preparing to drill off the coast of Alaska, but clearly so far it is not finding the costs prohibitive. Our report ‘Out in the Cold’ questions the business motivations of Shell’s Arctic projects.
Finally, BP is meanwhile in court, faced with a fine of $4.5bn as well as damages claims of $34bn from the Gulf of Mexico states – for its responsibility in the Deepwater Horizon disaster. The lawyers for the plaintiffs describe BP’s “culture of corporate recklessness”, where the company
put production over protection, profits over safety.
I hope this trial is heard as a warning against corporate recklessness on other oil frontiers, including the Arctic.