Report: Poor management led to Shell grounding

  • By Rachel D'oro
  • Thursday, April 3, 2014 9:28pm
  • News

ANCHORAGE — Poor risk assessment and management were among factors that led to the grounding of a Shell oil drilling rig in the Gulf of Alaska in 2012, the Coast Guard said in a report released Thursday.

The report also says Alaska’s tax laws influenced the decision to tow the Kulluk to Seattle for maintenance. Royal Dutch Shell PLC believed the drill vessel would have qualified as taxable property on Jan. 1, 2013, if it was still in Alaska waters.

The Kulluk broke away from its tow vessel in late December 2012 after it ran into a vicious storm — a fairly routine winter event for Alaska waters. Multiple attempts to maintain tow lines failed, and the vessel ran aground that New Year’s Eve off tiny Sitkalidak Island, just off Kodiak Island. Several days before the tow initially broke, the master of the tow vessel, Aiviq, sent an email to the Kulluk’s tow master, expressing concerns about the towing conditions, according to the report.

“To be blunt I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an ass kicking,” says the email quoted in the report. “In my opinion we should get to the other side just as soon as possible. It (sic) the event that our weather resources can route us “around” an area that will jeopardize any personnel or equipment on either the Kulluk or the Aiviq we should strongly consider the recommendation and deal with any logistical issues as they develop.”

The Aiviq’s master and tow master shared their concerns about the weather forecast with Shell’s marine manager, and they requested to change course to minimize the impact, according to the report. The request was “not formally granted,” even though Shell’s tow plan gave those Aiviq officials the discretion to change course under certain considerations, the report said.

Damage to the Kulluk played a role in Shell’s decision to forego Arctic offshore drilling in 2013. Shell doesn’t plan to drill in the Arctic this year.

Before the grounding in 2012, Shell had also experienced problems in the challenging Arctic conditions to the north where it was conducting pre-production drilling in the Chukchi and Beaufort seas.

In the Kulluk grounding, the Coast Guard report says sufficient evidence exists for other authorities to consider penalties.

Lisa Novak, a civilian spokeswoman for the Coast Guard, said the final report stems from the Coast Guard’s formal marine casualty investigation. She said it is a fact-finding report, with no direct penalties issued.

The report also includes recommendations. Among them, the Coast Guard Commandant should partner with the Towing Safety Advisory Council to establish a group to address issues raised by the grounding. The report also recommends that the state of Alaska develop minimal criteria for ocean towing in the Coast Guard’s area of responsibility. It also says Shell and other corporations intending to work in Arctic waters should develop and maintain policies addressing all aspects of such operations in areas with histories of heavy weather.

Shell spokeswoman Kelly op de Weegh said the company is reviewing the Coast Guard report. Shell already has implemented lessons learned and will measure them against the findings of the report, she said.

“We appreciate the US Coast Guard’s thorough investigation into the Kulluk towing incident and will take the findings seriously,” she wrote in an email.

U.S. Rep. Ed Markey, D-Mass., who has been vocal about his concerns over the grounding, issued a statement Thursday, saying Shell should be held accountable for its “reckless behavior” pertaining to its tax-avoidance motivations.

“This report shows that Shell ran through every single safety and common-sense red light in moving this rig because of financial considerations,” Markey said.” This kind of behavior should raise major red flags for any future Arctic drilling plans.”

Environmental groups said the report emphasizes deficiencies that make the oil industry and government ill-prepared to deal with oil development in the Arctic Ocean.

“Today’s report again shows that Shell did not appreciate or plan for the risks of operating in Alaskan waters, prioritized financial considerations ahead of safety and precaution, and simply disregarded important legal protections,” Mike LeVine, a staff attorney for the conservation group Oceana, said in an email. “The report again confirms what common sense dictates: companies and government agencies are not ready for the Arctic Ocean.”

Associated Press writer Donna Blankinship in Seattle contributed to this report.

Follow Rachel D’Oro at https://twitter.com/rdoro

More in News

Shrubs grow outside of the Kenai Courthouse on Monday, July 3, 2023, in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Kenai man pleads guilty to 2019 sexual assault

The man was arrested Dec. 4, 2019, after a person reported several injuries at a local hospital.

Economist and research analyst Andy Wink presents “State of the Kenai Peninsula Borough Economy” during the Kenai Peninsula Economic Development District Industry Outlook Forum in Kenai, Alaska, on Thursday, April 24, 2025. (Jake Dye/Peninsula Clarion)
KPEDD forum focuses on borough economy, vision for future

Where most economic indicators suggest fairly good health, housing appears to be a cause for concern, according to an economist presenting at forum.

State Sen. Löki Tobin (D-Anchorage) reviews an amendment on an education bill with other senators during a break in floor debate Monday at the Alaska State Capitol. (Mark Sabbatini / Juneau Empire)
Update: Effort to rush compromise education bill through Legislature hits snag due to ‘drafting error’

Bill returned to Senate, which passed it 19-1, to fix error in amendment; House vote expected by Wednesday

Member Tom Tougas speaks during a meeting of the Kenai Peninsula Borough Tourism Industry Working Group in Soldotna, Alaska, on Wednesday, Dec. 18, 2024. (Jake Dye/Peninsula Clarion)
Tourism working group gets 2-month extension

In a 3-3 vote, the working group had earlier this month rejected a draft document with proposed recommendations.

Various electronics await to be collected and recycled during an electronics recycling event in Seldovia. (Photo courtesy of Cook Inletkeeper)
Cook Inletkeeper celebrates 20 years of electronics recycling

More than 646,000 pounds of electronic waste has been diverted from local landfills.

Liz Harpold, a staff member for Sen. Donny Olson (D-Golovin)​, explains changes to a bill increasing per-student education funding and making various policy changes during a Senate Finance Committee meeting on Thursday, April 24, 2025. (Mark Sabbatini / Juneau Empire)
Revised education bill with $700 BSA hike gets new policy measures, advances to Senate floor

Changes easing charter school rules, adding new district evaluations fall short of governor’s agenda.

Students of Sterling Elementary School carry a sign in support of their school during a special meeting of the Kenai Peninsula Borough School District Board of Education in Soldotna, Alaska, on Wednesday, April 23, 2025. (Jake Dye/Peninsula Clarion)
District adopts budget with severe cuts, school closures

The preliminary budget assumes a $680 increase in per-student funding from the state.

A vote board shows a veto override attempt Tuesday by the Alaska Legislature on a $1,000 increase to per-student education funding falling short of the necessary two-thirds majority with a 33-27 vote. (Mark Sabbatini / Juneau Empire file photo)
Senate adds $700 BSA hike to school phone policy bill a day after veto override on $1,000 increase fails

Lawmakers say quick floor vote by Senate, concurrence by House may set up another override session.

The Soldotna Public Library is seen on a snowy Tuesday, Dec. 27, 2022, in Soldotna, Alaska. (Jake Dye/Peninsula Clarion)
Soldotna library advisory board hears update on federal funding cuts

The federal government’s dismantling of the Institute of Museum and Library Services could cause the reduction or elimination of some statewide library services as soon as July 1.

Most Read