Shell's Arctic Drilling Experiment Has Been an Epic Failure

Department of the Interior launches high-level review of what went wrong

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Tim Aubry/AFP/Getty Images
Salvage teams conduct an assessment of Shell's Kulluk drill barge on January 9th, 2013 in Kodiak Island's Kiliuda Bay in Alaska.
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In December of 2011, Royal Dutch Shell produced a series of videos advertising the company's plans to drill for oil in the Arctic Ocean. Their tagline: "It's time to explore, and Shell is Arctic Ready."

That slogan sounds rather different after 2012, a year in which little went as the company planned – this week prompting U.S. Secretary of the Interior Ken Salazar to announce an urgent, high-level review of what went wrong.

The year closed on a particularly low note when, on New Year's Eve, the Kulluk – one of two drilling rigs Shell sent to the Arctic – broke free from its tow ship in rough weather and ran aground on the rocky coast of Stikalidak Island while carrying more than 150,000 gallons of diesel.

But even before this mishap, the experiment had already been a severe disappointment to the company. In July, the Kulluk's sister ship, the Noble Discoverer, slipped its anchorage and narrowly avoided a similar fate. Construction problems and equipment failures delayed drilling; just a day after work finally began in September, the Noble Discoverer had to stop again to make way for an incoming ice floe more than 30 miles long. An oil spill containment dome failed a required safety inspection, "crushed like a beer can" by underwater pressure. The Coast Guard, which is already investigating the Noble Discoverer for criminally inadequate pollution and safety controls, is now launching an investigation of the Kulluk incident. And in further bad news for Shell (and the Arctic), the Environmental Protection Agency announced yesterday that both the Kulluk and the Noble Discoverer repeatedly violated the Clean Air Act during the 2012 season.

Environmental groups have long opposed Arctic offshore drilling, arguing that it's the height of hubris to imagine that oil companies can operate safely in the extreme conditions of the Arctic Ocean – particularly after 2010's catastrophic Deepwater Horizon spill in the comparatively placid Gulf of Mexico. These advocates say recent events illustrate their point: "Shell spent [the last year] making our argument far better than we ever could," a Sierra Club official told the Department of Interior yesterday.

Meanwhile, the words "Arctic Ready" have taken on a new flavor. Google the phrase now, and instead of Shell's promotional videos, you'll find a faux website and a series of spoof ads created by Greenpeace and the prankster duo known as the Yes Men – plus pages and pages of news coverage of the stunt. The goal was to emphasize the riskiness of Arctic drilling, as well as the ironic fact that this policy was made possible by the increasingly ice-free Arctic summers of our climate change era. One fake ad shows a polar bear: "With Arctic ice disappearing fast, polar bears today can swim hundreds of miles in search of food. We think they can do better. And so can we. At Shell, we're exploring beyond our limits."

Still, despite the accidents and the inquiries, both Shell and the Obama Administration have made it clear that they expect drilling to continue – perhaps as soon as next summer. In the press release announcing the Shell review, Interior Secretary Salazar reaffirmed that "The Administration is fully committed to exploring for potential energy resources in frontier areas such as the Arctic." Shell's attempt was widely seen as a test case for future offshore Arctic drilling, and other companies are waiting in the wings – "Arctic Ready," ready or not.