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Responsible development
The U.S. Minerals Management Service has estimated major oil and gas resources in the Arctic offshore and the United States needs these resources to reduce its dependence on foreign oil and gas, Pete Slaiby, Shell’s Alaska general manager, told the Resource Development Council’s annual conference on Nov. 19, the day before the U.S. Court of Appeals for the 9th Circuit remanded the MMS approval of Shell’s Beaufort Sea exploration plan. Slaiby was talking about Shell’s current and planned activities in the Beaufort and Chukchi Seas.
“The choices are clear,” Slaiby said. “We can continue to import more oil and gas. … Or we can develop our own domestic resources. Producing more oil and gas in our own country is no losing proposition. It provides real economic and social and security benefits.”
And Slaiby described his company’s frustration at not having started any Beaufort Sea drilling, as a consequence of litigation and permitting delays.
“We believe we have what is arguably the most environmentally sensitive and thoroughly responsible exploration program in history,” Slaiby said. “But with permit slippage and litigation delay it’s very difficult to say what 2009 will look like. … For every day we aren’t drilling we only serve to increase the timeline when we won’t be delivering crucial oil for both Alaska and the nation.”
There hasn’t been a platform blowout in the United States for more than 30 years and there has never been a blowout in the Arctic, Slaiby said.
“Shell has the best technology in the world for protecting against a spill,” Slaiby said. “… But if there were a spill Shell has put in place unprecedented, on-site, 24-7 oil spill response plans. That includes Arctic rated skimmers, booms, tankers, helicopters and ice breakers. In the extremely unlikely event that a discharge were to occur, our assets would be on site in minutes.”
De facto moratorium Slaiby said that it was nearly a year since the 9th Circuit court had heard oral arguments in the appeal against approval of Shell’s Beaufort Sea exploration plan. The delay in the court decision amounted to a de facto drilling moratorium “and one that the country cannot afford,” he said.
Slaiby also commented on the fact that Shell still does not have an Environmental Protection Agency air quality permit for its Beaufort Sea drilling vessel because of appeals against that permit.
“The EPA issued an air permit for one drilling rig that has yet to see the light of day because of the number of appeals it has been through,” Slaiby said. “… The impact this rig has is miniscule when one looks at the total magnitude of discharge. It would be the equivalent of one ocean-going vessel traversing the seas for two months. … We’ve spent $11 million chasing after this permit. I don’t know how much the government has spent of our money continuing to go after this permit as well.
“… It’s time to dialogue responsible energy and exploration policies … in city halls and assembly chambers, and outside of the courts. The alternative to this in the courtroom, I believe, is not benefiting anybody.”
Staffing shortages in regulatory agencies are also slowing the regulatory process, Slaiby said.
Jobs and careers Slaiby said that Shell wants to provide good paying jobs and careers for Alaskans. He cited the case of a young man who had been born in Kotzebue and had grown up in Barrow on the North Slope, and who had obtained a job with Shell on an oil spill response vessel. After also working as a marine mammal observer on a Shell supply vessel, the man is now working on a Gulf of Mexico platform and in Shell’s Anchorage office. He is also in the process of obtaining a degree from the University of Alaska.
“He’s a hard worker … and we’re very pleased that he’s decided to make a career with Shell,” Slaiby said.
Shell is also proud to be working with Mayor Edward Itta’s staff in the North Slope Borough’s wildlife department on the collection of environmental data, Slaiby said.
“Since 2006 and really just ending before we started this last open water season we had spent close to $40 million and we have more work planned on scientific data acquisition,” Slaiby said. “Shell is proud of this science work.”
During the 2008 open water season Shell operated acoustic recorders, aerial overflights, vessel observations and tagging programs. Those operations formed part of a continuing program to acquire “first-of-a-kind” data from both the Chukchi and Beaufort seas on topics such as marine mammal migration patterns, feeding habits and seismic noise deflection, Slaiby said.
Shell also conducted 3-D seismic surveys in the Beaufort and Chukchi seas during the open water season. And despite a great deal of offshore activity, the company experienced a safe and productive year.
“It appears by all accounts that the subsistence hunting was once again safe and successful,” Slaiby added.
Slaiby stressed the importance that his company attaches to having a positive impact on the local communities and said that the company’s search-and-rescue helicopter had saved several lives over the past couple of years. The company has established communications centers in North Slope communities.
“Shell helped expand the communications centers on the North Slope and these centers were used by everyone in the open water season during last summer, including Shell,” Slaiby said. “It’s really helping us share a very precious commodity which is the open water time on the Arctic Ocean.”
Slaiby also said that Shell strongly supports revenue sharing of outer continental shelf federal oil and gas revenues with the state and local communities. The company is doing whatever it can to see that revenue sharing comes to Alaska, he said.
—Alan Bailey
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