Seattle-area residents are fuming after a back door deal allowing Shell Oil to set up shop in the Emerald City recently came to light, months after it was already set in motion.
The Shell drilling ship Noble Discoverer drifts near shore near Dutch Harbor on Unalaska Island in the summer of 2012 after after losing its moorings. A U.S. Coast Guard inspection later found multiple safety and record-keeping violations on the ship. (Photo: Capt. Kristjan B. Laxfoss / AP)
The Port of Seattle has quietly inked a two-year lease under which Shell Oil will use Terminal 5 on the Seattle waterfront as the base for its efforts to drill in Arctic waters of Alaska’s Chukchi Sea.
With rapid authorization, negotiation and signing of the lease — reminiscent of how decisions on the waterfront used to be greased — the port has secured a $13.17 million deal and forestalled efforts by the region’s environmental groups to stop it.
The lease, covering 50 acres of Terminal 5, is with Foss Maritime, which offers an array of supply and tug escort services. A Foss tug towed Shell’s drilling ship, the Noble Explorer, away from a beach in Dutch Harbor, Alaska, in July 2012 after the ship slipped its moorings.
The lease was signed Monday. On Tuesday, in the first significant show of opposition, Fuse Washington announced that more than 1,000 members of its organization had signed a letter questioning the Shell home port deal. Fuse is the state’s largest progressive organization.
The letter, addressed to Port of Seattle commissioners, said in part:
“Because the Port is a publicly owned entity, the people of Seattle deserve an opportunity to weigh in on this proposed use of the terminal. The people of King County, and the planet, deserve better than a deal hashed out in the backrooms.”
They argue that Arctic waters cannot be safely drilled, and that a spill would endanger a major polar bear population as well as North America’s largest walrus population. Gray whales, which migrate past the Washington Coast each spring, feed in the Chukchi Sea in summer and fall.The environmental community passionately opposes drilling in the Chukchi Sea, a remote body of water off northwest Alaska that is more than 1,000 miles from the nearest Coast Guard base.
“This year we are planning on drilling in Alaska,” Simon Henry, chief financial officer at Royal Dutch Shell, told a stockholder briefing two weeks ago.
The oil giant expects to spend $1 billion on its Arctic plans this year. Shell can afford it. Profits for 2014 totaled $19.04 billion, even as oil prices were dropping.
“Even if we don’t drill this summer it will be approaching $1 billion because of the commitment to keep the fleet of ships in place,” Henry said.
The U.S. Department of the Interior has estimated that the Chukchi Sea holds 15.4 billion barrels of recoverable oil, worth $750 billion at today’s prices.
Shell had a disastrous experience in 2012 when it tried to drill in the Chukchi.
The Noble Discoverer broke loose and nearly ran aground. Later in the year, a U.S. Coast Guard inspection turned up multiple safety and record-keeping violations. Shell’s contractor, Noble Energy, pleaded guilty to felonies and paid $12.2 million in fines and community service projects.
Shell started to drill a exploratory well in the Chukchi Sea, only to be turned back by pack ice.
Its conical drilling ship, the Kulluk, was being towed to the “lower 48″ in December 2012 — in the teeth of Gulf of Alaska storms — when it broke loose from its tow lines. The ship ran aground near Kodiak, and had to be taken to China and taken apart.
With the stakes high, and having already invested $2.8 billion in leases, Shell is pressing on.
Depending on your attitude, the Port of Seattle may have negotiated a lucrative deal: $13.7 million will help retrofit Terminal 5 into a deep-water port. Seattle Port Commissioner Bill Bryant has estimated the deal will mean 200 family-wage jobs.
Or the Port of Seattle can be viewed as enabling an intensely risky enterprise, at a corner of the Earth too sensitive and dangerous to be sacrificed to the carbon economy.
“Washington is a national leader in the fight to protect our environment and stop global warming: We shouldn’t be rolling out the welcome mat for one of the most irresponsible oil companies in the world,” said Aaron Ostrom, executive director at Fuse Washington.
The port’s lease was made known Wednesday in a letter from its CEO Theodore Fick to lawyer Patti Goldman of Earthjustice, an environmental law firm.
The Port of Seattle has long been a major staging area for big resource developments in Alaska. The Jones Act (named for Washington Sen. Wesley Jones) requires that all cargoes shipped between U.S. ports be carried on U.S. flag ships built in America.
In the 1970s, the port lined up with Alaskan oil, timber and mining interests that bitterly fought the Alaska Lands Act, which set aside 103 million acres of the 49th state as national parks, monuments, wildlife refuges, wilderness and wild and scenic rivers.
The port is self-consciously green these days — particularly in management of the Seattle waterfront — but the Shell/Foss deal is strongly reminiscent of old times.
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