A look at Shell Oil and its plans for Arctic offshore drilling

By Dan Joling
Associated Press

ANCHORAGE, Alaska (AP) — Shell Oil drill vessels are heading to the Arctic.

But they will not be permitted to drill into petroleum-bearing rock until a key piece of blowout response equipment, a capping stack, is on site.

The capping stack is carried on the icebreaker Fennica, which arrived early Saturday for repairs in Portland, Oregon.

Arctic offshore drilling opponents plan to demonstrate while the Fennica is in port.

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WHAT’S AT STAKE?

Royal Dutch Shell and other companies want to tap into U.S. Arctic offshore reserves that the U.S. Geological Survey estimates at 26 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas.

Shell has invested upward of $7 billion in Arctic offshore investment. During the 2015 summer open water season, it hopes to drill two wells to begin determining whether there are commercial quantities of oil at its Burger Prospect about 70 miles off the coast in the Chukchi Sea.

Offshore Alaska offers some of the most prolific, undeveloped hydrocarbon basins in the world, potentially increasing domestic supply by over 1 million new barrels of oil per day, according to Shell.

WHY ARE CONSERVATION GROUPS OPPOSED?

Environmental groups contend oil companies have not demonstrated they can clean up a major spill in ocean that ranges from open to frozen to slushy, putting the Arctic’s rich marine life at stake.

The drill sites are more than 1,000 miles from the nearest Coast Guard base. The northern Alaska coastline lacks deep-water ports, major airports and basic infrastructure such as hotel accommodations for spill responders.

Critics also say opening a new, vast fossil fuel field will delay a transition to renewable energy and add to a global warming problem that has hit the Arctic hard by reducing sea ice, a habitat critical to polar bears and walrus.

IS EXPLORATORY DRILLING SAFE?

Exploratory wells will be drilled in water 130 to 140 feet deep — far different from the 5,000-foot water depth of the well in the Gulf of Mexico’s Deepwater Horizon explosion and blowout in April 2010. Shell expects to drill wells under a fraction of the pressure of the well in that disaster.

Shell says its flotilla of about 30 vessels will have everything on hand to respond in the “unlikely” event of a blowout.

Drilling foes say Shell’s performance in 2012, the last time it sailed north, is evidence of what can go wrong. One rig was separated from its tow vessel and ran aground off Kodiak. The other was fined $12.1 million for breaking maritime law.

WHAT IS BEING REPAIRED IN PORTLAND?

The Fennica is a Finnish icebreaker. The vessel’s hull received a gash roughly 3-feet long and a half-inch wide July 3 as it departed Dutch Harbor, Alaska. Shell considered a temporary fix in Alaska but decided to make a permanent fix at Portland’s Vigor shipyard.

The vessel’s primary purpose is to carry a capping stack, a roughly 30-foot piece of gear that in a blowout can form a metal-to-metal contact on a wellhead. The capping stack is designed to shut off oil like a giant spigot or connect to hoses to direct oil to vessels on the surface. It would be maneuvered into place by an A-frame winch on the Fennica and underwater remote-operated vehicles.

Shell also will have a blowout preventer on the ocean bottom that could seal a well with shear arms; drilling mud to plug a blowout; a second rig to drill a relief well; and a vessel carrying a containment dome that could funnel leaking crude to vessels on the surface.

WHAT CAN SHELL DO WITHOUT THE CAPPING STACK?

Oil-bearing rock is 8,000 feet below the ocean bottom. Shell received conditional approval Wednesday to drill above it.

Top-hole work begins with a mud-line cellar, an excavation to house the blowout preventer beneath the ocean floor, where it can’t be scraped by the bottom of a passing iceberg. Top-hole work also involves drilling to about 1,300 feet and setting a foundation for the well to grow in depth.

Shell can apply to drill into oil-bearing rock when the Fennica is repaired and in the Chukchi Sea. Shell expects that to happen by mid to late August.