Big Oil, Bad Decisions: Coast Guard Report Sheds More Light on Shell’s Shenanigans in Alaska

April 17, 2014 Updated: April 17, 2014

Royal Dutch Shell is in hot water for its shady actions in the Arctic Ocean.

On April 3, the Coast Guard released a report on its investigation of the grounding of the Kulluk, Shell’s Arctic drill rig, on New Year’s Eve in 2012. The grounding occurred when Shell decided to move the massive rig south to a port in Washington State despite mounting evidence that vicious winter weather would make the trip a treacherous one. The decision put lives and the environment at risk. And sure enough stormy seas broke the line between the Kulluk and its tow vessel and it ran aground off the coast of Kodiak around 9 pm that night.

It was clear that for all of Shell’s boasting about its high tech vessels and equipment, the company was woefully unprepared to meet the challenge of drilling in the Arctic. And there are plenty of good reasons why no one should be drilling there, period.

But the Kulluk’s grounding, in conditions far more tame than the Arctic and in an area where the Coast Guard was thankfully on hand, should be an eye opener. The rig was carrying about 150,000 gallons of fuel when it hit the shore of an environmentally fragile island that provides nesting habitat for seabirds. The Coast Guard had to evacuate the Kulluk’s crew members before the tow line even broke. The tow vessel Aiviq, which had previously been touted as a 200 million dollar world-class icebreaker designed specifically to handle Arctic storm conditions, lost power in all four of its engines and stopped functioning. The incident was costly, life threatening and a potential environmental catastrophe. The Coast Guard report also shows that it was the result of greed and recklessness.

Royal Dutch Shell didn’t move the Kulluk because they needed to; they chose to tow the Kulluk through a dangerous storm at least in part to avoid paying taxes. Shell’s Alaska spokesman Curtis Smith said “it is fair to say the current tax structure related to vessels of this type influenced the timing of our departure,” in an email to local newspaper The Dutch Harbor Fisherman.

If the Kulluk had remained in Alaskan waters past December 31st, Shell would have had to pay the state of Alaska $6 million in taxes. So Shell, a multi-billion dollar oil giant, made the risky decision to move the Kulluk to save what amounted to pocket change for the company.

That’s not all. Several incidents on the Aiviq prior to its engine failure during the towing attempt were never reported, including a previous engine failure and electrical blackout. The report included an email from the ship master of the Aiviq showing he had serious misgivings about towing the Kulluk so far under such hazardous conditions: “to be blunt I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an [expletive]-kicking,” the ship master wrote.

After every public disaster the oil industry swears it has learned its lesson; it points to some new piece of equipment or new vessel and says this time it can’t fail. This disaster is no different. Shell has scrapped the Kulluk and will look to some new drilling rig going forward. It’s already talking about “lessons learned.” But this report shows what we have known for a long, long time: that the fundamental problem isn’t faulty equipment or technical issues. No, the real problem is that for Big Oil, internal pressures to make a profit are simply more powerful than the need for proven and dependable procedures to ensure that operations like these are safe. And no matter how state-of-the-art the equipment is, it’s worthless without proper risk assessment.

Shell cared more about protecting its bottom line than protecting its ships’ crews or the surrounding environment. There’s no excuse for such blatant disregard for safety.

As Shell pushes the Obama administration to speed through reviews and approvals so it can again consider drilling in the Arctic in 2015, the Coast Guard report confirms what Defenders and many others have said before: Big Oil has no place in unpredictable waters of the Arctic Ocean.

This article was originally written and posted by Haley McKeys, a communications associate for Please go to their website for more information and the original story.