Arctic sea ice, ©NASA

Big Oil, bad decisions: Coast Guard report sheds more light on Shell’s shenanigans in Alaska

Royal Dutch Shell is in hot water for its shady actions in the Arctic Ocean.

On April 3, the Coast Guard released a report on its investigation of the grounding of the Kulluk, Shell’s Arctic drill rig, on New Year’s Eve in 2012. The grounding occurred when Shell decided to move the massive rig south to a port in Washington State despite mounting evidence that vicious winter weather would make the trip a treacherous one. The decision put lives and the environment at risk. And sure enough stormy seas broke the line between the Kulluk and its tow vessel and it ran aground off the coast of Kodiak around 9 pm that night.

It was clear that for all of Shell’s boasting about its high tech vessels and equipment, the company was woefully unprepared to meet the challenge of drilling in the Arctic. And there are plenty of good reasons why no one should be drilling there, period.

But the Kulluk’s grounding, in conditions far more tame than the Arctic and in an area where the Coast Guard was thankfully on hand, should be an eye opener. The rig was carrying about 150,000 gallons of fuel when it hit the shore of an environmentally fragile island that provides nesting habitat for seabirds. The Coast Guard had to evacuate the Kulluk’s crew members before the tow line even broke. The tow vessel Aiviq, which had previously been touted as a 200 million dollar world-class icebreaker designed specifically to handle Arctic storm conditions, lost power in all four of its engines and stopped functioning. The incident was costly, life threatening and a potential environmental catastrophe. The Coast Guard report also shows that it was the result of greed and recklessness.

Kulluk tow, © Petty Officer 1st Class Sara Francis, U.S. Coast Guard/ReleasedRoyal Dutch Shell didn’t move the Kulluk because they needed to; they chose to tow the Kulluk through a dangerous storm at least in part to avoid paying taxes. Shell’s Alaska spokesman Curtis Smith said “it is fair to say the current tax structure related to vessels of this type influenced the timing of our departure,” in an email to local newspaper The Dutch Harbor Fisherman.

If the Kulluk had remained in Alaskan waters past December 31st, Shell would have had to pay the state of Alaska $6 million in taxes. So Shell, a multi-billion dollar oil giant, made the risky decision to move the Kulluk to save what amounted to pocket change for the company.

That’s not all. Several incidents on the Aiviq prior to its engine failure during the towing attempt were never reported, including a previous engine failure and electrical blackout. The report included an email from the ship master of the Aiviq showing he had serious misgivings about towing the Kulluk so far under such hazardous conditions: “to be blunt I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an [expletive]-kicking,” the ship master wrote.

After every public disaster the oil industry swears it has learned its lesson; it points to some new piece of equipment or new vessel and says this time it can’t fail. This disaster is no different. Shell has scrapped the Kulluk and will look to some new drilling rig going forward. It’s already talking about “lessons learned.” But this report shows what we have known for a long, long time: that the fundamental problem isn’t faulty equipment or technical issues. No, the real problem is that for Big Oil, internal pressures to make a profit are simply more powerful than the need for proven and dependable procedures to ensure that operations like these are safe. And no matter how state-of-the-art the equipment is, it’s worthless without proper risk assessment.

Shell cared more about protecting its bottom line than protecting its ships’ crews or the surrounding environment. There’s no excuse for such blatant disregard for safety.

As Shell pushes the Obama administration to speed through reviews and approvals so it can again consider drilling in the Arctic in 2015, the Coast Guard report confirms what Defenders and many others have said before: Big Oil has no place in unpredictable waters of the Arctic Ocean.

Haley McKey, Communications Associate 

8 Responses to “Big Oil, bad decisions: Coast Guard report sheds more light on Shell’s shenanigans in Alaska”

  1. Pam Ride

    Get that out of there . We don’t need them drilling there at all.

  2. Tom

    Gee, running to save on taxes. Isn’t DOW a tax-free NGO, dictating policy to government agencies like the rest of us tax-payers, but without the tax burden? It just seems ironic. But wait: Kulluk had a berth reserved for repair and upgrade in Seattle since August. Could the tax thing be a red herring? Is DOW calling the Dutch dumb and greedy for trying to maintain schedule? Perhaps.

    Despite bad decision making vs tow vessels (someone put water in the tug fuel tanks, which lost all four engines, lost tow cable tension and cut free) and weather: Doing what every other ship in the area does in bad weather: Go to sea. Were any lives lost? No. Did it pollute? No. Is it in dock? It was. Is it drilling again? Soon.

    So in the end this is pure spin.

  3. Tim Cammers

    This dose not surprise me on bit everyone of them are to me super Villains from Captain Planet and they need to be brought down for the evil ways!

  4. Sharon Carol Herman

    Amen…They have no business doing business….

  5. Vanessa Herbert

    “Never doubt that a small group of thoughtful, committed citizens can change the world. In fact, it’s the only thing that ever has.”
Margaret Mead 1901 – 1978

    The Earth must be protected from selfish, thoughtless, greedy humans.

  6. Joanne Wade

    Shell Company should still pay the 6 million in USA’s TAXES! Why does our government allow Oil Companies owned by Foreign Countries drill for Oil and profiting Billions of dollars from America’s Artic Land? Is Shell paying for any Penalties for the potential risk for the Artic Drill Rig, the “Kulluk” that was towed during a harzardous Storm Conditions in the Artic? Where was the EPA during this incident? We can’t afford another Environmental Oil Spill and Disaster! This is a prime example of “Greed” with blatent disregard for Wildlife, the Artic Seas and the Environment! Remember the BP Oil Spill Disaster in the Gulf Coast region? “Drill Baby Drill equals Spill Baby Spill.

  7. H.A.L.

    Good piece, but I missed the part of Billion dollar fines and jail time for some top shell folks. Still waiting for the murders of the gulf oil spill to be held accountable, but the coperate lackies in charge of oversite will do the slow drag until the memory of the event fades.

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