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Shell 'not technologically ready' to start Arctic drilling

02nd April 2012

Shell’s plans to explore drilling off the Alaskan coast looks to face further setback after critical new report.

Shell has been planning to explore the pristine waters of the Arctic for five years

The US government must consider more thoroughly the unique risks of drilling in the Arctic and lack of containment infrastructure as it assesses Shell's plans to drill off Alaska's coast, a report said on Friday.

The report, by the Government Accountability Office, Congress' investigative arm, picks holes in Shell’s technological capacities, putting weight to calls by green groups and native Alaskans to delay Shell’s plans to explore the Arctic region.

Shell has been preparing to drill in the region for five years after spending roughly $4 bin on Beaufort Sea and Chukchi Sea leases. Both plans have been given the green light, but the oil giant will need well-specific permits before it can start.

The report recognises the oil industry's ability to cap out-of-control wells in deep water has improved since the BP oil spill in 2010, when 4.9m barrels of oil were dumped into the Gulf of Mexico. However, it found equipment designed specifically for handling the extreme conditions of the Arctic is not yet up to scratch.

The technological capabilities are not yet sufficient to “mitigate some of the environmental and logistical risks”, it states.

“A well containment response in Alaskan waters might face certain risks that could delay or impede a response to a blowout,” for example. “If a blowout were to occur at the end of the drilling season in late October, surface ice and temperatures could pose risks to a well containment response”, it states.

"The existence of different types of risk and the limited response infrastructure pose additional challenges the Interior will have to address to conclude that it is providing sufficient oversight," it adds.

The report said the department has strengthened its oversight of the oil industry's containment capabilities, but it needs to lay out a timeframe for including well containment in its unannounced spill drills.