Will Port of Seattle be repair center for Shell Oil’s Arctic vessels?

By Joel Connelly, January 7, 2014, Seattle P.I.

The Port of Seattle’s Terminal 5 is being proposed as a repair and service center for vessels engaged in Shell Oil’s troubled, delayed program to drill for oil in Arctic waters of the Chukchi and Beaufort Seas off Alaska.

 

The port was not talking on Wednesday, but will release information Thursday. The Seattle Port Commission will hear a staff briefing Tuesday on what is certain to be a controversial proposed tenant.

 

“Yes, local company Foss is vying for the business to do maintenance and repair work on Shell’s exploration platform and Foss is being considered as an interim tenant for Terminal 5 while we do the work to get it ‘big-ship ready,’” said a senior port source.

 

Foss Maritime is part of the Saltchuk network of transportation companies. Foss operates one of the nation’s largest coastal tug and barge fleets and offers technical engineering services, including vessel design, construction and repair.

 

In the summer of 2012, the tug Lauren Foss towed the Shell exploration ship Noble Discoverer away from a beach in Dutch Harbor, Alaska, after its anchor slipped and the 512-foot vessel nearly ran aground.

 

The tug Barbara Foss later assisted southbound demobilization of the Noble Discoverer from the Chukchi Sea back to Dutch Harbor.

 

The contractor operating the Noble Discoverer, Noble Drilling LLC, later pleaded guilty to eight felony counts for violating environmental and safety laws, and paid a $12.2 million fine.  The violations were discovered during a U.S. Coast Guard safety inspection.

 

Another senior Port of Seattle source explained the proposed use of Terminal 5 and its possible benefits to Seattle:

 

“Saltchuk would sublease part of the terminal to Shell to service (its) Arctic exploration fleet.  It would be, as I understand it, 200 family-wage jobs and possible $28 million to port which is rebuilding the terminal.”

 

Environmental groups are certain to voice opinions.  The conservation community is adamantly opposed to drilling in the Chukchi Sea, which is hundreds of miles from the nearest deep-water port and more than 1,000 miles from the nearest Coast Guard station.

 

The Chukchi Sea, located off northwest Alaska, is home to more than half of Alaska’s polar bear population as well as thousands of walruses and harp seals.  It is a summer feeding ground for the gray whales that migrate north through Washington waters each spring.

 

Shell had a disastrous experience in 2012 and undertook no drilling activity in the summers of 2013 and 2014.

 

The oil giant spent more than $2 billion to buy offshore leases in the Chukchi Sea and has invested billions in preparing drilling equipment.

 

In 2012, however, nothing went right.  Advancing ice floes forced a halt to drilling.  Shell tried to have its big circular drilling ship, the Kulluk, towed back down to the “lower 48″ in the midst of violent December storms in the Gulf of Alaska. The towing operation was in part designed to avoid paying Alaska taxes.

 

The Kulluk slipped its tow lines, ran aground on New Year’s Eve at Sitkalidak Island near Kodiak Island.  It was severely damaged, taken to China and eventually dismantled. “The Wreck of the Kulluk” was the cover story in last Sunday’s New York Times magazine.

 

Royal Dutch Shell has not given up on the Arctic.  Its leases to explore in the Chukchi Sea will begin to expire in 2017.  The Chukchi Sea is thought to hold as many as 23 billion barrels of recoverable oil beneath its usually ice-covered surface.

 

Yet, the price of oil is falling, and with it the viability of Arctic drilling.

 

Shell used Puget Sound ports in preparation for its 2012 exploratory drilling.  It spent $400 million building a containment dome as a guard against oil spills.

 

When the dome was taken out of Bellingham into Puget Sound waters, however, a faulty electrical connection caused it to shoot to the surface.  A federal inspector’s report, in colorful language, said the dome “breached like a whale” before sinking in 120 feet of water.  When towed to the surface, it was “crushed like a beer can.”

 

While the gremlins struck Shell’s bid to drill in 2012, Foss Maritime was proud of its support work for the oil giant. “Foss transported high risk cargoes safely, and without incident, through pristine, ecologically sensitive areas,” the company said later.

 

Seattle has long served as a gateway to Alaska, as well as a staging area for the 49th state’s marine and resource industries.

 

The Seattle Port Commission faces a challenging decision.  Its meeting to hear the Terminal 5 proposal will be at 1 p.m. on Tuesday, Jan. 13, in port offices at the Seattle-Tacoma International Airport.

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