Shell Shows It Can’t Ensure Safe Offshore Oil Operations in the Arctic

How can apparently sane, sober people believe that oil can safely be extracted from the floor of the Beaufort and Chukchi seas? That was the question I was asking myself in late August 2012 as Audubon Alaska’s director, Nils Warnock, and I hiked the mud roads and gray beaches of America’s northernmost community—Barrow, Alaska.

The airport has but one runway, and the helicopter hangar rented to the Coast Guard (for $60,000 a month) is sinking into permafrost. Neither Barrow nor Wainwright, the closest coastal village, 70 miles to the roadless west, has a dock. Large supplies are delivered to Barrow once a year from Anchorage or Seattle by a flotilla of barges that hit the beach like landing craft. Roads can’t be paved because seasonal shifts in the permafrost level would buckle tar.

But this village of 4,300 is to be the staging area for offshore oil operations on 3.7 million acres of federal leases and 5.7 million acres of state leases. Six oil companies are involved, but Hague-based Royal Dutch Shell, Europe’s largest, is the major player. It has already invested at least $4.5 billion for the chance to tap seabed oil reserves estimated at 26.6 billion barrels—at America’s current consumption, not quite four years’ worth.

The previous December the Obama administration had given Shell approval for exploration pending demonstration that it could, among other things, cap a blowout and clean a spill in ice-bound, storm-whipped waters—in other words, normal Arctic conditions. The demonstration, on a flat-calm sea in Puget Sound in September 2012, had been hugely impressive, though not in the way Shell had hoped. The capping device buckled “like a beer can,” to borrow the words of onboard observer Mark Fesmire of the Interior Department’s Bureau of Safety and Environmental Enforcement.

By the end of 2012 a series of equally spectacular snafus had removed the last vestige of hope that Arctic oil operations wouldn’t be an ecological catastrophe. It has been a comedy of errors. Everything that could go wrong did go wrong. As a result, Shell had to halt operations, at least for 2013.

Wind and snow stung our faces as Warnock and I explored Barrow. Beaches were festooned with feathers from molting birds. As we looked toward the North Pole, gray whales blew and breached, and along the entire horizon short-tailed shearwaters dipped and rose in an undulating ribbon of black. Closer in, long-tailed ducks, eiders, scoters, Pacific loons, and kittiwakes bobbed over whitecaps, and glaucous gulls wheeled and shot shoreward on the same wild wind that had delayed Warnock’s flight from Anchorage. All these birds and many more, plus whales, seals, and walruses, are sustained by fertile upwellings from the Barrow Canyon. Shell’s leases are close to more than 15 Audubon Important Bird Areas. Birds come here to breed from all continents and all 50 states. On the dirt road to Point Barrow we encountered an array of satellite dishes (all horizontal and pointing south toward geosynchronous orbits above the equator), arches made of bowhead whale jawbones, and fields flecked with the white blooms of Arctic cotton. Eight snowy owls squatted on the tundra, sternly surveying us through half-closed yellow eyes. The Inupiat name for Barrow is Ukpiagvik—“place to hunt snowy owls.” They’re great eating, one fellow told me.

The point itself was a vast expanse of sand strewn with trash, puddles, and birds— dunlins, sanderlings, western sandpipers, godwits, black- bellied plovers, and king eiders. Offshore, two supply barges plowed west from Prudhoe Bay.

While the wealth of wildlife elated me, it unnerved me as well, because the scenes of poisoned habitat and doomed birds I’d encountered during the Deepwater Horizon blowout were fresh in my mind. Devastating as that spill was, conditions for cleanup and bird survival couldn’t have been better. So warm was the water in the Gulf that bacteria started eating the oil almost immediately. So warm was the air that nearly half the oil evaporated on contact. Daylight was long, seas mostly gentle. Still, most cleanup operations had to cease at nightfall and when storms or lightning occurred.

In the Arctic, conditions couldn’t be worse. Oil can take decades to break down. In winter the sun doesn’t cut the horizon for two months, and before freeze-up in late fall, 20-foot waves are not unusual. After freeze-up, blowout capping and cleanup are even less likely. Responding to the Deepwater Horizon spill were 9,700 vessels. In Louisiana the nearest Coast Guard strike team (trained in pollution response) was 130 miles away, in Mobile, Alabama. At Barrow the nearest strike team is 2,595 miles away, in Novato, California. In the Gulf of Mexico lightly oiled birds frequently survived. But Arctic water is so cold that an oil spot the size of a quarter could lead to lethal hypothermia.

Oiled polar bears could suffer the same fate. When Warnock and I came across a seal carcass on the beach we didn’t linger, because there had been polar bear tracks that morning, and with seal-hunting opportunities diminished by melting pack ice, carrion has become a bigger part of the bears’ diet—a part they would be tempted to supplement with human flesh. Polar bears were just now arriving from ice receded so far north that survivors of the brutal swim reportedly collapse exhausted, lying on the beach most of the day. Retreating ice is also forcing walruses to shore, where they are more vulnerable and therefore easily stampeded, sometimes trampling juveniles to death.

The melt-off threatens birds like spectacled eiders as well. No one knew where they wintered until the 1990s, when researchers, alarmed at their declining population, started tracking them with satellite telemetry. It turned out that the world’s remaining birds were holed up in one small area of polynyas (open areas in the ice). But what will befall these birds now that ice is vanishing or if oil seeps into the remain- ing polynyas? “Species like that give you heartburn when you think about a spill,” remarked Warnock.

Global warming is changing the Arctic faster than it’s changing most other regions, and virtually nothing is known about how or if its wildlife can adapt. A record melt-off of pack ice occurred in 2012. Southern birds never before seen in Barrow are showing up, including a great blue heron, an olive-sided flycatcher, and a northern gannet. The week before I arrived, a dragonfly had been seen.

Guiding Warnock and me one morning was Qaiyaan Su’esu’e, an Inupiat envi- ronmental educator and the former natural resources director for the regional tribal government. “When I was younger,” she told us, “ice would show up at the begin- ning of October. Now it’s late November or even December. Beautiful multi-year icebergs used to be a common sight.

I haven’t seen one in years. We depend on bowheads, but now our whaling seasons are shorter because of unpredictable ice conditions.”

Still, some welcome global warming because it has opened sea lanes for so much of the year. “I will be one of those persons most cheering for an endless summer in Alaska,” effused Shell Alaska vice president Pete Slaiby, as he addressed a crowd in Girdwood, Alaska, the week I was in Barrow. “There will be spills,” he allowed in an interview with the BBC, though he predicted they won’t “impact people’s subsistence.”

Barrow’s poverty works to Shell’s advantage. Rude houses, some burned out, repose on stilts so their heat won’t melt the permafrost. Chained dogs sit shelterless on mud amid rusted oil barrels, junked snowmobiles, junked cars, junked boats, and frames for skin boats. The ubiquitous dumpsters, most unemptied, bear spray- painted messages like “Smoke you lose; quit you win.”

“Oil would provide jobs,” said Su’esu’e. “We didn’t have flush toilets, fire departments, police stations, or schools. We have all of that now because of Prudhoe Bay [the oil source for the Trans-Alaska pipeline]. That was on our land, so we got revenue sharing. Some people think that if Shell drills offshore, we’re going to have the same kind of boom. We’re not. The ocean is federal land. And Shell could just barge the oil out. Risks outweigh benefits. I advocate for awareness, making sure people have an opportunity to be part of the public process.”

Assisting Su’esu’e in the challenging work of public education is Joe Sage, a whal- ing captain and director of the Native Village of Barrow Wildlife Department. “An oil spill could destroy our lifestyle,” he said. “It would do a lot of damage to birds, bowheads, and other marine mammals. Shell has no idea what they’re up against here.”

Sage received his captain’s commission (the ultimate Inupiat honor) from his uncle Roy Nageak, who started whaling when he was nine. “We’ve always been dependent on what we catch,” Nageak declared, seated on his couch beside and under renderings ofJesus.“WhentheYankee whalers killed off the bowheads, our people got sick and our population went way down. These oil companies have more access to our oceans than to our land—that’s the pathetic part. They came in like they owned everything. We were so few. God gave us bowhead hunting season, then seal hunting season, then caribou season, then fishing season, then berry-picking season. The bowheads come to us. It’s a spiritual connection. If you have respect for the animals, if you’re at peace with the environment that God has created, they will come to you. Seals do the same. We are rich in the resources we have. Money from the oil compa- nies has made a rift with our people.”

I found no such discontent with oil money in Wainwright—a village of 575 perched on tundra bluffs beside the Chukchi Sea. The flight manifest on the Beechcraft 1900 from Barrow consisted of toilet paper, milk, Shasta cola, and two passengers, includ- ing me. The only building at the Wainwright airport was a porta-potty with a tipped-over toilet that I forsook in favor of the leeward side of an oil tank. The houses were similar to those in Barrow except draped with drying animal skins.

The Interior Department is amenable to Shell’s tentative plan to land a pipeline from its offshore wells in Wainwright, run it through the National Petroleum Reserve, and connect it to the Trans-Alaska pipeline.

Almost everyone I met in Wainwright was clueless about the realities of offshore oil extraction. Several days earlier, Shell’s Slaiby had been feted and prayed for at a dinner at which he raffled off jackets emblazoned with the Shell logo. All the drilling noise might be a good thing, one hunter explained to me. “It might scare the bowheads closer to shore.” Another dismissed possible harm from spills because “the wells would be too far out.” Whaling captain and Wainwright Public Works official John Hopson lamented all the “yahoos and tree huggers” worried about the coming oil bonanza. “Gas costs $7 a gallon,” he said. “I can’t afford to go hunting anymore, so they might as well kill all the animals. In the cold water the oil will just sink. And they can burn it like they did in the Gulf of Mexico. You don’t hear those guys complaining anymore. Stop interfering with our lifestyle. You Audubon people are hurting us by suing Interior [for approving Shell’s oil-spill response plan]. You should be suing them for the wars. That kills people, not just animals. The Endangered Species Act is a load of crap. You tree huggers want to hug trees, go hug them in Boston. Why don’t you learn about us before you spout all this stuff.”

“Why do you think I journeyed from Boston to Wainwright?” I inquired, but didn’t get an answer.

On the flight back to Barrow, dropping clouds forced us low,so I got a fine look at the National Petroleum Reserve—at 22.8 million acres the largest federal land management unit in America, habitat for caribou, musk oxen, Arctic foxes, wolves, wolver- ines, grizzly bears, and polar bears, and probably the most productive wetland complex in the circumpolar Arctic. Ponds, marshes, and streams shimmered across tundra that glowed pink, brown, yellow, and purple in the muted light.

We flew over the reserve’s Peard Bay and its adjacent ponds strewn across perma- frost—a continentally signifi- cant Important Bird Area with nesting habitat for shorebirds, Arctic terns, Pacific loons, long-tailed ducks, Sabine’s gulls, greater white-fronted geese, and such Audubon WatchList species as yellow- billed loons, red-throated loons, spectacled eiders, king eiders, and Pacific black brant. The shoreline provides denning and feeding habitat for polar bears and haul-out sites for walruses along with spotted, ringed, and bearded seals. Streams collected by Peard Bay sustain pink and chum salmon. Peard Bay is just one of dozens of important Arctic wildlife sanctuaries threatened by offshore and onshore oil operations. The danger zone stretches from Kasegaluk Lagoon, west of Wainwright, to the Arctic National Wildlife Refuge, east of Barrow—the habitat George W. Bush’s Interior Secretary, Gale Norton, dismissed as “flat, white nothingness.”

In their condemnation of Obama, environmentalists would do well to keep in mind Norton’s statement—a precise encapsulation of the George W. Bush administration’s approach to Arctic oil extraction. Basically, the Bush administra- tion said: Here’s what we own, take what you want—anywhere. After all, according to its chief land manager, there was nothing to protect.

The Obama administration has taken a different approach. In February 2013 then Interior Secretary Ken Salazar finalized a plan rendering 13.35 million acres of the National Petroleum Reserve’s most scenic, histori- cally significant, and ecological- ly important areas—like Peard Bay, Kasegaluk Lagoon, and the Teshekpuk Lake Special Area—if not safe from spills, at least off-limits to oil leasing.

“Overall, this plan provides a responsible balance that protects about half of the nearly 23-million-acre Reserve while still allowing for the vast majority of the area’s oil to be accessed and developed,” reports Audubon Alaska, which has never opposed responsible onshore oil development in the Arctic. It does, however, oppose offshore operations. “Until the industry can dem- onstrate that it can contain an oil spill, we think that drilling is not appropriate,” says policy director Jim Adams. “Still, drilling is going to happen, so we’ll be proposing critical areas that should be avoided.”

Deputy secretary David Hayes, second in command at Interior until he left in late June 2013, was one of the few Obama officials who understood wildlife and had the president’s ear. Hayes was the architect of “Integrated Arctic Management,” a plan to coordinate the work of regulatory agencies and invested interests. Before his appointment in May 2009, he’d been an accomplished environmental attorney and activist, serving with me on the board of American Rivers, where he represented us pro bono in lengthy litigation against the U.S. Army Corps of Engineers for its destruction of fish and wildlife on the Missouri River.

So much did he impress us with his commitment to the cause of healthy, free-flowing rivers that we made him our vice chair, thereby placing him next in line for chairmanship.

I put this question to Hayes before he stepped down: “In light of all Shell’s disasters, has Interior rethought the company’s ability to safely extract offshore oil in the Arctic?”

“We do have concerns,” he replied. “We’re about to announce a high-level review of the 2012 drilling season to see if there are some systemic issues we should be looking at.” That review, completed on March 8, 2013, severely chastises Shell for not being “fully prepared in terms of fabricating and testing certain critical systems” and proceeding without “adequate preparation.” And it suggests a bunch of “affirmative showings before [Shell] is allowed to resume its drilling program,” such as submitting “a comprehensive, integrated plan,” formulating a spill response, and setting up and completing third-party safety and environmental audits.

“Do you see Integrated Arctic Management happening offshore as well as in the National Petroleum Reserve?” I asked.

“Oh, yes,” he said. “The concept is that you look through a broad lens; you get away from a project-by-project process for approving opera- tions and instead get a concept of the entire landscape and seascape. Absolutely the oceans are part of that.”

Under his chairmanship the work- ing group handling Alaskan energy development brought agencies that had frequently been at odds—like the Coast Guard, the EPA, and NOAA—together in coordinated management. Hayes effected unprecedented com- munication with North Slope residents and wildlife interests, and addressed international aspects of oil exploration with the Arctic Council, an intergovernmental forum that promotes cooperation among Arctic nations. Obama couldn’t have found a manager more capable of making a horrible situation a little better.

But despite Shell’s stunning incompetence and proven inability to cope with Arctic oil spills, Interior vows to proceed with lease sales. The department, states the March 8 review, “expects” that Shell will work out all its problems in time for “its next proposed drilling season.”

The environmental community expects nothing of the sort. In July 2012 Shell lost control of its drill ship, the Noble Discoverer, when it broke free from its mooring in Dutch Harbor in the Aleutians and nearly smashed on shore. Later a fire broke out onboard. The Coast Guard cited the damaged ship for nearly two dozen safety and pollution problems, and the U.S. Department of Justice sent criminal investigators. Their questions went unanswered. According to sources cited by CBS, Shell had provided the crew with lawyers.

Shell had boasted that it could contain 90 percent to 95 percent of spilled oil in the Arctic (the massive cleanup effort in the Gulf of Mexico contained 14 percent). But, when pressed, the company allowed that it could merely “encounter” 90 percent to 95 percent of spilled oil, as who could not? Its oil-spill response barge, the Arctic Challenger, flunked Coast Guard certification because it was fire prone and had question- able wiring and piping. The dilapidated Challenger had been required to handle 100-year storms, but Shell asked the Coast Guard if a 10-year-storm capability might be okay. Sure, said the Coast Guard.

Because the Noble Discoverer was still in violation of pollution regulations, Shell asked EPA if it could drill anyway. Sure, said EPA. And since the challenged Challenger had yet to be certified and was two weeks away in Bellingham, Wash- ington, Shell asked Interior if it could drill without its capping device and other safety equipment. Sure, said Interior, but don’t go down to oil-bearing layers. Then, after breaking loose from its towline, Shell’s 266-foot-diameter floating drill rig, Kulluk, freshly topped off with 155,000 gallons of toxic petroleum products, fetched up on the rocks at a globally significant Important Bird Area off Kodiak Island on New Year’s Eve. When Shell’s super tug Aiviq had attempted to reconnect, it experienced multiple engine failures. Damage to both the Kulluk and the Noble Discoverer was so severe that the vessels are being repaired in Singapore and South Korea, respectively.

In mid-January 2013 then Interior Secretary Ken Salazar revealed that he had never “felt comfortable” with Shell’s drilling plans and that “it may be that Shell isn’t even ready to move forward with drilling in 2013.” Barely more than a month later Shell agreed, announcing that it was pulling out of the Arctic for the year.

Despite all the current uncertainty, no one in the environmental community, industry, or government doubts that oil extraction from the Arctic’s continental shelf will happen. Someday Audubon and other wildlife advocacy groups may be okay with it. But they oppose it now—before the technology exists to do it safely and before oil’s effects on Arctic wildlife are understood. As Shell has taught us, haste will waste not just oil but all manner of other resources that sustain and enrich America and the world.

This story originally ran in the November-December 2013 issue as "Shell Game."