Justice Department is investigating Shell’s Arctic drilling

MCCLATCHY NEWSPAPERSMarch 27, 2013 

— The Coast Guard has asked the Justice Department to investigate possible pollution violations by both the drilling rigs Shell used in its botched efforts to explore for oil last year in the Arctic Ocean waters off the northern coast of Alaska.

Coast Guard Rear Adm. Thomas Ostebo said Wednesday that he'd turned over to the Justice Department for review and possible prosecution an investigation into the troubled Shell drilling rig Kulluk. Ostebo said it was an "investigation into potential Marpol violations."

Marpol is short for marine pollution, and it's a name used to refer to the International Convention for the Prevention of Pollution From Ships.

The Coast Guard earlier had sent the Justice Department a list of 16 safety and environmental violations by the other rig used in Shell's Arctic efforts, the Noble Discoverer.

"As the Coast Guard and Department of Justice are still actively engaged in these investigations, it would not be appropriate for me to provide additional information at this time," Ostebo said at a Senate hearing in Anchorage, Alaska, chaired by Alaska Democratic Sen. Mark Begich.

Shell Alaska Vice President Pete Slaiby said at the hearing that he also wouldn't discuss any matters under investigation, but he defended Shell's efforts.

"Our drilling operations were completed safely and successfully. … It was while leaving the theater of operations that issues with the Discoverer were identified by the Coast Guard and the Kulluk ran aground," Slaiby said.

The Kulluk was grounded for several days off Kodiak Island after a New Year's Eve storm. Ostebo, who's the Coast Guard's commander for Alaska, said the grounding was an "event that highlights the rigors of operating in Alaskan waters."

Ostebo said the Coast Guard was investigating the Kulluk grounding with help from experts with the National Transportation Safety Board and the Bureau of Safety and Environmental Enforcement. Such an investigation might several take months to complete.

The Noble Discoverer was found to have 16 violations after a Coast Guard inspection at the end of November. They included pollution control problems and a finding that the vessel couldn't go fast enough to maneuver safely in rough Arctic conditions.

The rigs were able to drill only a partial well apiece. The Interior Department says Shell won't be allowed to drill the Arctic waters again until it presents a plan that shows it can handle the conditions. "Shell screwed up in 2012," Interior Secretary Ken Salazar said this month.

Shell and contractor Superior Energy Services also had repeated problems getting its oil spill containment barge ready. It was renovated at the Port of Bellingham shipping terminal on Cornwall Avenue. Shell had hoped it would be ready for service during the 2012 drilling season. But at one point the containment dome on the barge was "crushed like a beer can" in testing in the waters off Washington state, according to regulators.

Shell has dropped plans to drill in Arctic waters this year in the wake of the problems, but the company promises to return at a "later stage."

Shell has spent more than $4.5 billion on its efforts to drill off the Alaska coast. David Lawrence, Shell's executive in charge of exploration in the Arctic and the rest of North America, has announced that he's resigning from the company. Lawrence told Dow Jones Newswires last year that the drilling off the northern coast of Alaska would be "relatively easy."

Last summer, Shell was the first company in two decades to drill in Alaska's Arctic waters. "It marked an historic re-entry into the U.S. Arctic offshore. … The first step to validating the enormous offshore resource potential," Shell executive Slaiby said Wednesday.

Environmental groups are calling on the Obama administration to shut down the Arctic offshore drilling program, but the president has declined to do so.

"The administration is committed to supporting safe and responsible exploration of potential energy resources in frontier ar-eas such as the Arctic," Bureau of Ocean Energy Management Director Tommy Beaudreau said Wednesday.

Email: scockerham@mcclatchydc.com; Twitter: @seancockerham

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