Gash in hull could delay Shell’s Arctic plans

Icebreaker that’s damaged has a crucial role in the quest to find oil off the north coast of Alaska

WASHINGTON — Damage to a critical vessel in Shell’s Arctic drilling campaign could delay or derail the company’s hopes of resuming drilling in the Chukchi Sea this summer.

Crew members of the MSV Fennica discovered a ballast tank leak on Friday and traced it to 39-by2-inch gash in the hull. The vessel — designed to keep ice at bay during operations and deploy emergency response equipment — was on its way to the Chukchi Sea as Shell prepared for drilling.

The 22-year-old icebreaker is being examined by marine experts at Dutch Harbor, Alaska, to determine whether the hull breach can be repaired onsite.

The Fennica is unique in Shell’s 29-vessel fleet in that it is carrying a critical piece of the company’s Arctic containment system: a capping stack designed to fit on top of a damaged well in case of a blowout or other emergency.

Shell spokesman Curtis Smith said the company does not believe the incident will delay the company’s planned Chukchi Sea operations. But, he acknowledged, “any impact to our season will ultimately depend on the extent of the damage.”

Separately, the company is waiting on at least one drilling permit before it can begin boring a single new well into its Burger prospect about 70 miles off the coast. Regulators at the Bureau of Safety and Environmental Enforcement are still reviewing Shell’s applications to drill up to two wells, 8.9 miles apart.

Shell already has been ordered to scale back its plans to drill two of its Burger wells at the same

time, following a ruling by the Interior Department that wildlife protection regulations do not allow simultaneous drilling operations within 15 miles.

It remains unclear what caused the hole in the side of the Fennica’s hull. At the time the leak was discovered, it was moving through charted Alaska waters, having barely left its mooring in Dutch Harbor.

While those waters are shallow, Shell said the Fennica’s planned route kept it in depths of at least 42 feet. The vessel, which is owned by Arctia Offshore and contracted by Shell, drafts at roughly 27 feet. It is possible the Fennica encountered a shallowwater hazard that has gone undocumented and uncharted.

Marine experts are assessing whether it will require more extensive work in a dry dock.

Any significant repair that sidelines the Fennica for the brief Arctic drilling season could require Shell to get a new icebreaker, move emergency equipment off the Fennica and win approval from regulators at the Interior Department because the changes could represent a “substantive” departure from the company’s existing, government-approved exploration plan.

That drilling blueprint details the vessels Shell plans to use and their main missions during normal operations as well as emergencies.

But this is relatively uncharted territory for oil companies and the government agencies that oversee them. Most Gulf of Mexico drilling operations involve a smaller stable of supply ships and a single drilling rig — far from the dozens Shell is employing.

And Interior regulators have discretion in determining what constitutes a “substantive change” to a pre-approved offshore exploration plan. For instance, regulators could determine any replacement vessel is substantively similar to the Fennica — with similar capabilities and air emissions.

To go forward, even with an extensive, timeconsuming Fennica repair, Shell probably would have to relocate its specialized emergency capping stack and possibly the A-frame that deploys it to another vessel. It is unclear whether an icebreaker with similar capabilities could be contracted and moved to the area in time.

Interior Department spokeswoman Jessica Kershaw stressed that Shell will be held to “highest safety and environmental standards.”

“This includes having on hand the required emergency response systems necessary for each phase of its drilling program,” Kershaw said.

The episode was providing fresh fodder to Arctic drilling opponents, who say it invites comparisons to mishaps involving Shellowned and -contracted vessels during the company’s 2012 operations. That year, before the company began boring wells in the Chukchi and Beaufort seas, its contracted Noble Discoverer drillship drifted near Dutch Harbor. And on Dec. 31, 2012, Shell’s Kulluk drilling unit ran aground along an uninhabited Alaska island.

“In just a few days, Shell wants to start drilling for oil in one of the most delicate ecosystems on earth,” Greenpeace USA spokesman Travis Nichols said. “The company clearly hasn’t improved its operations from its nearly catastrophic 2012 attempt to drill in Alaska, and so we can expect news like this to continue to come in until the Obama administration finally stops this doomed project from going forward.”

Shell’s Smith said authorities were promptly notified of the ballast leak and hull breach. Neither the vessel nor its crew were in danger, he said, and the Fennica’s ballast pumps continue to perform normally.

Although it is “an unfortunate potential setback,” Smith said, “in no way does it characterize the preparations we have made to operate exceptionally well.”