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How Much Have Protesters Actually Affected Shell's Drilling Plans?

July 30, 2015

Protesters dangling for two days from Portland's St. Johns Bridge kept a Shell Oil ice breaker at bay for 36 hours before it passed through en route to the Arctic.

Greenpeace and other environmental groups involved claimed their temporary blockade a success: they sent Shell a message and drew worldwide attention to their campaign to stop Arctic oil drilling and to wean the world from fossil fuels that contribute to climate change.

But what does it really mean in the context of plans for offshore drilling in the Arctic?

What’s the impact been for Shell?

The daily rate Shell pays for the ice breaker, the MSV Fennica, is $59,228, according to an injunction filed against Greenpeace. Experts estimate Shell has spent about $7 billion in its efforts to explore drilling in the Arctic. That shakes out to around $3 million per day for two drill rigs, personnel and support vessels.

So, with protesters delaying the ship for two days, Shell’s cost of paying for the Fennica alone over that time is about .002 percent of what the company has spent on its Arctic endeavor -- and a judge’s ruling Thursday says Greenpeace has to pay for the cost of the Fennica while they’re protesting.

Can the protesters stop Shell’s drilling this summer?

Shell is on a deadline, but that seems unlikely. Under its permits from the Department of Interior, Shell has until Oct. 31 before it has to wrap up its drilling operations. To keep Shell from drilling before then, the protesters would have had to delay the Fennica for a lot longer than the two days they managed.

Shell still needs a permit to drill deep enough to hit hydrocarbons. To do that, it needs to prove it can have the Fennica — and the capping stack on board — at the drilling location within 24 hours of emergency. There’s still plenty of time left in the season for that to happen, said Gregory Julian, a spokesman for the Bureau of Safety and Environmental Enforcement, the arm of Interior that issued the permit.

Julian said it’s not a given that the bureau would approve the permit. That depends (somewhat) on how late in the season Shell is able to apply for its permit. But from  the Fennica leaves Portland, the additional time needed for Shell to get the equipment in place and get its application processed is a matter of days or weeks — not months.

So it’s unlikely protesters could have forced Shell to miss that deadline — even if they had blockaded the ship for the several days they said they were prepared to last.

Do the protesters have anything to gain from just delaying the ship?

Future support for and investments in offshore Arctic drilling depend in part on exploratory missions like this one. So for an organization that opposes offshore oil and gas production, as Greenpeace does, slowing such an effort has its own value.

On Nov. 1, Shell is required by the Interior Department to begin closing up its operations. That’s the date after which  the department says too much ice will be returning to the area, which makes drilling and cleanup more complicated. Less time to drill between now and then could mean a less fruitful trip.

The type of wells Shell is drilling take between 60 and 90 days of drilling. So, less time to drill could mean a less successful mission. Add in that the Department of Interior won’t allow Shell to drill its two wells at once (because of potential harm to marine mammals) and Shell’s operating window is pretty compressed.

Can Shell do any work up there without the Fennica?

Yes. Shell’s Arctic rigs aren’t exactly doing nothing but waiting around for the Fennica to arrive. Shell’s pre-Fennica permit allows drilling, just not drilling deep enough that Shell is likely to hit oil.

Right now, Shell can probably do about 20 percent of the work it needs to do before the Fennica is on location, according to Bob Bea, a Professor Emeritus at University of California-Berkley who previously worked in offshore drilling for Shell and who led a study into the causes of the Deepwater Horizon spill.

Bea said he fully expects Shell to be doing the drilling it planned this summer. He said in the extreme event that protests keep the Fennica delayed for weeks rather than days, the Department of Interior could be forced to decide whether to allow Shell to drill without a capping stack. Bea said he's seen it happen before.

Could Shell use a different ship instead of the Fennica?

Theoretically yes, according to the Bureau of Safety and Environmental Enforcement, but capping stacks aren’t plentiful in the Arctic (or many places outside the Gulf of Mexico), and neither are ice breakers like the Fennica that can pass the operational inspections needed for the permit.

So the Fennica is the most likely scenario.

Why is there such a demand to drill in the Arctic?

The U.S. Geological Survey has estimated the Chukchi and Beaufort seas contain an estimated 26 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas. That’s several times more billion barrels than the Bakken region of North Dakota -- where wells have pumped out more oil than the region’s pipelines can hold. It’s also more than 30 times America’s annual imports from OPEC, according to The New York Times Magazine.

So it’s a lot of oil. But it’s also hard to get to. And experts say the risks are great in an area that's ecologically sensitive and challenging to clean up if, for instance, oil ends up trapped under an ice floe.

One of the biggest challenges of the Chukchi Sea, where Shell plans to drill this summer, is the lack of infrastructure. Unlike the Gulf of Mexico, there are no support rigs or equipment or supply centers nearby. Everything Shell needs, it brings with it.

There’s very little infrastructure up there and right now, Shell’s drilling is exploratory. Reports have said actual production of oil in the region wouldn’t happen for another 10-15 years.

So once the ship leaves, what does that mean for West Coast ports?

It's probably not the end of their involvement with offshore drilling in the Arctic and the lack of infrastructure in the drilling area could be one reason why.

Just as West Coast ports have found themselves strategically located as a valve for fossil fuel exports to Asia, protests over Arctic drilling equipment in Portland and Seattle have already shown the Northwest could find itself in the middle of the debate over expanded drilling in the arctic.

Vigor Industrial, the company repairing the Fennica, sees "enormous opportunity" to strengthen its role in supporting offshore oil and gas operations in the Arctic. Vigor recently purchased and installed the largest dry dock in North America, and acquired Kvichack, a Seattle-based shipbuilding company.

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Private drone owner Adam Simmons captured the Royal Dutch Shell's icebreaker, Fennica, just before it moved under the St. Johns Bridge Thursday.

Adam Simmons

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