Pondering impact of drilling off remote northwest Alaska

August 16, 2011

To archaeologist Richard E. “Rick” Reanier, the 10-foot-high mound on a sandy spit on the coast of northwest Alaska was no mere pile of sand.

Circling in front, he found the top of an old kerosene tin. Around the side, he turned over a rusty door from a nearly century-old cast iron stove. Brushing away some sand, he uncovered the ruins of an entrance corridor to an Inupiat house made of sod and driftwood.

Beyond this stretch of beach lies the vast Chukchi Sea, stretching from eastern Siberia to the Alaskan coast on the edge of the Arctic. For centuries, Native Alaskan Inupiat have roamed these shores hunting bowhead whales, bearded seals, walruses and caribou.

Now Shell Oil is also hunting in the Chukchi Sea. This pristine area inside the Arctic Circle is the next frontier for offshore oil drilling in the United States. The Interior Department estimates the Chukchi Sea could hold as much as 12 billion recoverable barrels of oil, about half of current U.S. proved reserves.

Shell agrees, and some in Washington are inclined to support the company at a time of soaring energy costs. Even though it has not drilled a single hole yet, Shell has spent $2.1 billion to acquire Chukchi leases, plus almost $2 billion to collect seismic data, study the coast, and refurbish ice-breaking ships for drilling 70 miles offshore here and in the Beaufort Sea during the summer of 2012.

Reanier, working under a contract with Shell, is identifying cultural sites to be avoided if and when a pipeline comes ashore. “If you don’t know where they are, you can’t protect them,” he said, marking the location of the sandy mound.

Two decades ago, a handful of wells were drilled in the Chukchi Sea, but oil companies didn’t think it was worth developing. Now, prices have soared, and Shell thinks there is more recoverable oil there than previously thought.

“There is a prize over there,” says Pete Slaiby, vice president of Shell Alaska.

But oil development could threaten the sea mammals the Inupiat people hunt for food. Several lawsuits have been filed to get government agencies to block Chukchi drilling. Alaska Natives worry that the mere noise of drilling would disrupt the feeding and migration patterns of bowhead whales, beluga, walruses and seals. The draft of a study done for Shell suggests that seismic surveys have already silenced walruses, or frightened them off to other feeding grounds.

A sea-centered culture

“Our culture revolves around the ocean,” Mae Hank, an outspoken resident of Point Hope, to the south of the village of Wainwright, says tearfully. “The ocean is very sensitive.”

The drilling moratorium after the Gulf of Mexico spill last year put Shell’s plans on ice for a time and heightened anxiety about how Shell could deal with an Arctic spill. And in the past week, a 1,300-barrel oil spill at a Shell platform in the North Sea aroused drilling foes.

Coast Guard Rear Adm. Paul Zukunft said recently that dispersants wouldn’t work in icy water, that the Arctic doesn’t have the same oil-chomping microbes the gulf has and that the nearest Coast Guard response vessel is 1,200 miles away. Whereas thousands of workers flocked to the gulf coast to fight the spill there, there are only a handful of rooms at the tiny Olgoonik Hotel here.

The window for drilling here is short, from July through October. The rest of the year, temperatures drop as low as 56 degrees below zero and the Chukchi Sea is largely frozen. So Shell is pressing to line up regulatory approvals for the Chukchi as well as the Beaufort Sea to the northeast.

“Even in areas that are [in theory] open to production, we still face debilitating regulatory red tape,” Marvin Odum, president of Shell in the Americas, said in a speech to the U.S. Chamber of Commerce in Washington on July 28. Odum, who has made several trips to Alaska to reassure Alaska Natives, said the lease sale was, “in effect, an invitation from the government” but lamented that Shell had “been strung along by regulatory and legal barriers.”

Shell’s efforts have become a cause celebre in Washington. In June, the House passed a measure that would force the Environmental Protection Agency to speed up permit decisions and prohibit the EPA’s Environmental Appeals Board from hearing challenges to air permits needed by drill ships. But Rep. Henry Waxman (D-Calif.), ranking Democrat on the House Energy and Commerce Committee, says that delays have been caused by multiple revisions in Shell’s permit applications.

Piles of permits

Shell needs about 10 permits for each of the three wells it hopes to drill next summer in the Chukchi Sea (as well as others in the Beaufort Sea). It has obtained one from the Army Corps of Engineers for a drilling structure and one from the EPA to discharge drilling fluids; it awaits others from the EPA, the U.S. Fish and Wildlife Service, the Coast Guard, the National Oceanic and Atmospheric Administration and the Bureau of Ocean Energy Management, Regulation and Enforcement. Slaiby says “we have to bat 1.000 to be ready to go.”

President Obama appears inclined to go ahead with Chukchi exploration, provided there are safeguards to prevent or limit any spill. The president has established an inter-agency group to streamline permitting in Alaska. And he has endorsed oil development in the National Petroleum Reserve, which lies along the probable 280-mile-long route that would link a Shell pipeline to the Trans-Alaska Pipeline System, which carries oil south from Prudhoe Bay.

But the mere thought of a spill is daunting, despite Shell’s extensive preparations and assurances. Much of the Chukchi is shallow, so Shell’s wells are in water only 150 feet deep. The company also says that the pressure in the reservoirs is lower and easier to manage than in the Gulf of Mexico. Its blowout preventers will have two blind shear rams, instead of the customary one; the rams are designed to cut through and seal steel drill pipe.

Yet in its revised exploration plan submitted in May, Shell said that the worst case spill — while a “very low likelihood” — could reach 23,100 barrels a day, nearly half the rate of BP’s gulf spill. A Canadian government study said that bad weather would prevent any spill response one out of five days in June, the mildest month, and two out of three days in October, the end of the open-water season.

The company, however, has refurbished a ship called the Kulluk whose conical hull is designed for Arctic conditions. Positioned between the Chuckchi and Beaufort seas, the Kulluk could reach the drill site and complete a relief well in 34 days. A tanker capable of holding half a million barrels could be on hand within 24 hours, Shell says; that would store the first 20 days of a leak until another tanker could arrive. A nearby barge would also be able to store oil. And a capping stack like the one used to stop the BP spill last year would be warehoused on land between the Chukchi and Beaufort seas.

In an old gravel pit along the lagoon behind Wainwright, Shell has already stored 18 yellow and blue containers with boom for oil spills and a handful of small boats to spread them.

Studying shore and currents

Shell is also collecting scientific data, an answer to environmental groups who argue that more research needs to be done. In addition to hiring Reanier, Shell has deployed small teams of hydrologists, soil experts and naturalists to scout the shoreline. Two tiny antennae on a bluff generate information about currents by bouncing high-frequency radar off the water surface. The company has dropped buoys the size of medicine balls offshore to collect more information about the currents, which often go one way on the surface and the opposite way below.

Standing beside Reanier on the beach, the calm sea in one direction and soggy brownish-green tundra in the other appear endless. Aside from a few caribou tracks and sea birds, there are few signs of life — except for swarms of mosquitoes. A pair of hydrologists working for Shell walks nearby, measuring the shape of the shoreline as currents deposit sand and rich black muck inside a lagoon.

After a while, a helicopter chartered by Shell drops Reanier farther down the coast, where he pokes around some more sod houses. He finds the bottom of a beer bottle and jots down a pattern and some numbers from it. He later goes online and finds that the bottle was probably produced by an Owens Illinois plant in Charleston, W.Va., in 1933.

The nearest settlement is the ramshackle Inupiat village of Wainwright, population 540, named for a lieutenant who came here on an 1826 expedition. A skinned walrus head sits drying on a porch there. A caribou carcass is perched awkwardly on another. Strips of seal dry in the summer sun. Boats, pickup trucks and four-by-four vehicles are parked helter skelter amid the homes of wood and corrugated metal. People chat on an open radio line, trading the mundane details of life 72 miles from Barrow, the nearest town.

In the distance sits an abandoned early warning station built when the Air Force worried about a Soviet attack. Now, all that guards the town are rows of snow fences that prevent drifts from burying homes during the long, sunless winters.

Many people work for the North Slope borough government. Seventeen work at the school. Others do maintenance work. But almost everyone hunts, from boats and from cabins on the tundra or along the coast. Food is stored in large chests, or in holes dug in the ground where temperatures stay in the 20s during the summer.

Some people keep souvenirs; one home displayed 24 fist-sized eardrums taken from killed whales.

At the fire station one recent evening, members of a local dance group, the Kuugmiut Dancers of Wainwright, gracefully move their arms and stomp their feet as others chant and beat drums. They are preparing for a competition in Fairbanks. “We listen for the animals, and after we hunt the animals, we sing and dance,” one song goes, says the group’s founder, McRidge Nayakik.

There is support for development here.

“You have to think of your country, like that president said,” says the village mayor, Enoch Oktollik, struggling to recall the name of John F. Kennedy. Oktollik, who maintains boilers and does other handy work, says that more than half the people in Wainwright are unemployed. They might be able to find work supporting the oil companies.

For it and against it

Though people here talk about protecting their subsistence way of life, they still rely on planes and ships for some supplies. Those shipments are expensive. A new port would reduce those expenses, the mayor adds. Bob Shears, a local contractor, estimates that building a road costs $1 million a mile and buying gasoline, even with subsidies, costs about $7 a gallon.

The Olgoonik Corp., the village company that runs the hotel and store, has printed a slick brochure with a vision for a port and encampments for oil workers.

“They smell money,” says resident Frank Bester Jr.

But there is uncertainty among the Alaska Natives along the coast, especially further south in Point Hope but even in Wainwright.

Oktollik asks, “Are we willing to risk our subsistence way of life?” He says, “We don’t have gardens to grow vegetables, or potatoes or tomatoes.”

Bester says that he’s “both for and against” oil development.

The Chukchi and the tundra are Wainwright’s lifelines. Recently, after a Shell helicopter shuttling scientists to points along the coast landed, Oktollik rushed up to the pilots to make sure they weren’t frightening caribou spotted to the north.

Time after time, people mention the spill in the Gulf of Mexico.

“I’m afraid being so rural here, they may not have the proper equipment to take care of it,” says Ralph Aveoganna, who works at a local gasoline station. He also fears oil development might change the migration patterns of the bowhead whale.

Yet change is probably coming to Wainwright in any case. Climate change is altering the ice melt and could change migration patterns. It could also turn the Arctic into a shipping channel; last year the first commercial cargo trip was made, carrying iron ore from Norway to China.

One night recently, with the summer sun still shining across the water and bouncing off the pale pastel colors of the homes here, Muriel Panik, a 34-year-old single mother who has attended the tribal college in Barrow, sat on her four-by-four vehicle. She said that oil development would be good for jobs and that she wants her own daughter to do something different. She doesn’t want big changes in Wainwright, but she recognizes they could come about anyway as video games transfix the village’s young people and climate change threatens its fast-eroding shoreline.

“The older generation says this is the last frontier,” she says. “I say this is the next frontier.”

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