WASHINGTON — Shell failed to oversee contractors that were central to its bungled efforts to explore for oil in the Arctic waters off Alaska last year, the Interior Department has concluded.
"Shell screwed up in 2012," said Interior Secretary Ken Salazar.
Salazar, whose agency released a review of Shell's efforts Thursday, said the company won't be allowed to drill again off the Arctic coast until it presents a plan showing that it can better handle conditions there.
The Interior Department's report said Shell's problems have raised serious questions about its ability to operate safely and responsibly in the challenging conditions off Alaska. The report said Shell entered the drilling season "not fully prepared in terms of fabricating and testing certain critical systems and establishing the scope of its operational plans."
"One of the recurring themes that we identified throughout the review was the failure on the part of Shell to oversee contractors that they relied on for critical components of their operations," Bureau of Ocean Energy Management Director Tommy Beaudreau, who led the probe for the Interior Department, said in a conference call with reporters.
Shell already has dropped plans to drill in the coming year in the wake of the problems. But the company promises to return to Arctic waters at a "later stage."
Shell spokesman Curtis Smith said Thursday that the company appreciates the Interior Department's review and takes the findings seriously.
"Consistent with our recent decision to pause our 2013 drilling program, we will use this time to apply lessons learned from this review, the ongoing Coast Guard investigation and our own assessment of opportunities to further improve Shell's exploration program offshore Alaska," Smith said in an email. "Alaska remains a high potential area over the long-term, and we remain committed to drilling there safely, again."
The Interior Department review is just one of the investigations Shell is facing.
The Justice Department is probing 16 safety and environmental violations the Coast Guard found on the Noble Discoverer, one of two Arctic drilling rigs Shell is using. It's owned and operated by Shell contractor Noble Corp.
The Coast Guard also is investigating the circumstances of the Dec. 31 grounding of Shell's other Arctic drilling rig, the Kulluk. It was being towed by Shell contractor Edison Chouest Offshore at the time.
Shell and contractor Superior Energy Services also had repeated problems getting its oil spill containment barge ready. It was renovated at the Port of Bellingham shipping terminal on Cornwall Avenue. Shell had hoped it would be ready for service during the 2012 drilling season. But at one point the containment dome on the barge was "crushed like a beer can" in testing in the waters off Washington state, according to regulators.
Beaudreau said Shell also had problems working with contractors on emissions controls. The Environmental Protection Agency says both Shell drilling rigs ended up in violation of air-quality standards.
The Interior Department said Shell will need to submit a plan describing every phase of its operations before it can drill in the waters off Alaska again. Shell also will have to complete an audit demonstrating it's ready for the conditions found in the Arctic.
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