Coast Guard report: Reckless behavior caused grounding of Shell’s drill rig

Apr 7, 2014

According to a Coast Guard report, Shell's reckless actions caused the Kulluk vessel to run aground in Alaska.

Coast Guard Report shows its time for Shell to abandon dangerous Arctic drilling plans.

The U.S. Coast Guard has spoken, and its message is clear: The Kulluk drill rig ran aground in Alaska because Shell recklessly and knowingly towed it into a brutal North Pacific storm, in part to dodge taxes in Alaska. Shell’s towing contractor, Edison Chouest Offshore, may be charged with violations of marine vessel laws and regulations.

The Kulluk went adrift in late December 2012, and ran aground near Kodiak, Alaska, on New Year’s Eve. Coast Guard rescuers saved its crew, but the rig sustained massive damage.

A year-long investigation – detailed in a recent report from the Coast Guard – found that the crew in charge of the towing effort expressed “blunt” reservations about taking the Kulluk to sea in the middle of winter with bad weather in the forecast, but Shell ordered the operation to move forward.
The Coast Guard report, released April 3, says the ship master of the Aiviq, the boat that towed the Kulluk until the rig went adrift, emailed the Kulluk’s tow master on Dec. 22, saying:

“To be blunt I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an ass kicking.”

Video shows the Kulluk running aground after Shell ignored safety concerns of tow master.

Tax avoidance prompted safety shortcuts

“This report shows that Shell ran through every single safety and common sense red light in moving this rig because of financial considerations. This kind of behavior should raise major red flags for any future Arctic drilling plans,” said Sen. Ed Markey (D-Mass.), a member of the Senate Commerce and Environment Committees. “Shell should be held accountable for its reckless behavior.”

"This kind of behavior should raise major red flags for any future Arctic drilling plans." - Sen. Ed Markey

Coast Guard investigators found that Shell believed the drill rig would be subject to state taxes on oil and gas properties if the Kulluk remained in Alaska waters on Jan. 1, 2013. The Aiviq towed the Kulluk out of Dutch Harbor on Dec. 21, 2012.

“This comprehensive report by the U.S. Coast Guard provides extensive evidence of the extraordinarily complex nature of Arctic Ocean drilling and mobilization operations,” said Lois Epstein, a licensed engineer and Arctic program director for The Wilderness Society. “Problems and wholesale failures like the grounding of the Kulluk are inevitable. When you add in a profit incentive – in this case, the avoidance of taxes – you basically guarantee that industry will take short-cuts to accomplish its goals.”

Coast Guard Rear Admiral Joseph A. Servidio wrote in comments on the investigation: “I am most troubled by the significant number and nature of the potential violations of law and regulations identified in the Enforcement section of the investigative report.”

Shell recently announced it was cancelling plans to move forward with Arctic drilling in the Chukchi Sea during the summer of 2014, but it's not yet clear if they will try again at a later time.
If Shell’s long record of mistakes and mishaps in its 2012 drilling and mobilization efforts in the Arctic Ocean hadn’t already shown the difficulties of producing oil in the Arctic Ocean, the investigation of the Kulluk’s grounding should make it clear: Shell should abandon this dangerous pipedream and pursue energy production in locations less sensitive and less challenging than the Arctic Ocean.