I'll be watchin' Joe. Congratulations. Ran across an article from the Alaska Dispatch the other day from July 14th.
Coast Guard said the Discoverer only came with in about 100yds from shore. Shell said the vessel did not run aground but "stopped very near the coast".
The truth will be on the news this evening!
Member Since: September 11, 2007 Posts: 126 Comments: 13068
CBS are running it with the news that the Coast Guard are now pursuing a criminal investigation into Noble Discoverer's serious safety management and pollution control issues.
CBS sources say that when criminal investigators arrived to interview the crew the company had already brought in lawyers and all employees declined to be interviewed.
Member Since: February 28, 2009 Posts: 0 Comments: 1207
Quoting insideuk: CBS are running it with the news that the Coast Guard are now pursuing a criminal investigation into Noble Discoverer's serious safety management and pollution control issues.
CBS sources say that when criminal investigators arrived to interview the crew the company had already brought in lawyers and all employees declined to be interviewed.
UK, were the pollution control issues related to air quality?
Member Since: September 11, 2007 Posts: 126 Comments: 13068
They talk about issues regarding oil discharge resulting in enforcement notices in Sept 2012 and bilge water management, ventilation and engine problems amongst 23 deficiences found after a Coast Guard inspection last May.
The investigations have been going on for quite some time it seems. The Kulluk had 3 enforcement warnings for being a pollution source from May 2012, and 19 deficiences in electrical and maintenance systems.
Oh, and the Kulluk's fairy lights are all but buggered...
Member Since: February 28, 2009 Posts: 0 Comments: 1207
Shell submitted an application to revise in September of 2012 because they could not meet the original specifications after an expensive refit. The compliance order imposed temporary limits for some emission sources higher than in Shell's permit, but EPA expected the fleet's overall emissions for 2012 to be lower than the original permit allowed due to Shell's shortened operating season.
On November 30th, Shell submitted a revised application to the June permit revision application because; "The changes requested are based on actual equipment performance during the 2012 operating season, which includes excess emissions and permit deviations identified by Shell and by EPA during a September 2012 inspection of the Discoverer."
After a revised permit, they still could not meet the requirements. And then, the Kulluk ran aground-or perhaps "stopped very near the beach". And there the issue lay for a while. An addition to the EPA permit file was added by EPA on December 31st giving Shell a deadline (Jan 11) to submit info so a decision could be made on the permit application. The date is probably just a coincidence with the Kulluk grounding...
"...Continuing with that process, and to complete the revision application, the EPA requests that Shell now formally submit all of the previously requested information, along with any information that has not yet been submitted, so that we can continue to process the application. Please provide the information requested in Attachment A by January 11, 2013. Please notify Natasha Greaves if a complete response is not possible by this date.
Your application is considered incomplete until this information is received and evaluated and the EPA has determined that the application contains all of the information needed for the EPA to propose a permit decision. Note that as the EPA continues review of your application, we may identify further information that will be essential to enable the EPA to continue processing your application and make a permit decision, including information that may be needed in response to public comments..."
In the interest of fairness and at the risk of sounding uncaring I thought perhaps the media was trying to add hype where none is required. One more smoke belching ship plying the Arctic would seem to be minor compared to the greater dangers of drilling for oil off the North Slope. But in light of your post, and other bits and pieces-an ever-growing pile of incompetence.
Re the Kulluk Kristmas lights, The Feast of Epiphany comes early. Ground Hog Day is just around the corner.
Member Since: September 11, 2007 Posts: 126 Comments: 13068
MissNadia, not a trace of Joe's stuff on the west coast either. I guess they changed their minds and went with the cute, big-eared kid with dinosaurs on his brain. Fame is so fickle. Sic transit gloria mundi.
Here is a LINK to a CBS story earlier today that contains some footage of Kulluk and Noble Discoverer but, I don't think any of it is Joe's. Certainly no credit given. The jerks!
Member Since: March 28, 2006 Posts: 0 Comments: 908
Well Dotmom was disappointed tonight. I, too, had the recorder going and as several of you have pointed out, the kid and the dinasaur story took center stage. I was so disappointed. Wonder if it will run at another time. I saw the note from the CBS reporter on the site with the Noble Discoverer video. She said tonight!
Member Since: April 3, 2008 Posts: 0 Comments: 994
Shell is required to have two rigs when/if they drill into any hydrocarbon play next summer. As a back up to quickly begin drilling a relief well if something went badly wrong. A relief well was what eventually capped the Macondo well in the Gulf of Mexico.
With the Kulluk aground and the Discoverer under fire, it's been a bad week for Shell.
Member Since: September 11, 2007 Posts: 126 Comments: 13068
21. whitewabit(Mod)4:24 AM GMT on January 05, 2013
Quoting dotmom: Well Dotmom was disappointed tonight. I, too, had the recorder going and as several of you have pointed out, the kid and the dinasaur story took center stage. I was so disappointed. Wonder if it will run at another time.
Maybe they will use it on the morning news show ..
Member Since: August 17, 2005 Posts: 327 Comments: 24458
I hope it is obvious that I would not post this notice with lack of confidence that it would happen. I hesitated to notify the 10 or so family and friends with a quick email, knowing the fickle fingers of fate with news stories. But I had the chance, and figured it would not be good if they missed it. Or YOU!
Having been contacted by two major networks in 12 hours was pretty cool. The first note from NBC was missed well beyond deadline. I saw the CBS note right away and responded with an email. That producer called me within a couple minutes.
She told me the story would run tonight, that I would get a real name credit, and that I would also get a DVD of the newscast.
You know the rest.
I am waiting to hear from my favorite network...FOX.
Beell, check out my youtube stuff, especially NOBLE DISCOVERER on the beach. Does that look like a hundred yards to you?
THANKS for all the positive comments. I will now slink back into the darkness...
Member Since: April 2, 2008 Posts: 702 Comments: 500
Joe, as a regular reader of your blog, I saw the video not long after you put it up. When I read the Alaska Dispatch article the "100yd" quote seemed to be bul...generous. More like 150' as a guess.
I don't blame you for posting the announcement. Publicity is good! A pile of us want to see your photography and unique talent of bringing all of us along where ever you go or what ever you write about gain an even wider audience. (that right there should get me an autographed copy of your book, yes?)
Member Since: September 11, 2007 Posts: 126 Comments: 13068
Quoting DHaupt: MissNadia, not a trace of Joe's stuff on the west coast either. I guess they changed their minds and went with the cute, big-eared kid with dinosaurs on his brain. Fame is so fickle. Sic transit gloria mundi.
Here is a LINK to a CBS story earlier today that contains some footage of Kulluk and Noble Discoverer but, I don't think any of it is Joe's. Certainly no credit given. The jerks!
Actually, they did use some of Joe's footage! It is uncredited, but look at :14 - :19 in the video on the CBS link and compare to :43 - :47 on Joe's video titled "Kulluk and Aiviq" Congratulations Joe!
I'm not sure if they do 2 separate broadcasts for Eastern time and the West coast, but I was watching when this story was broadcast at 7am Pacific time. Depending on what time they Emailed you, they may have used this footage before asking permission to use it.
No need to apologize for anything, Joe. It was ages ago, but I also got interviewed along with wife and kids for a local interest story about Cal Prop 13. The TV station spent a couple of hours here. I think the only thing that made the final cut was one of Muriel and I looking like a couple of nitwits. They can make dogs and cats sing and dance, you know.
But, now that they have you on their radar, you'll probably hear from them again.
The mysterious malfunction of my tipping bucket rain gauge is discovered and fixed. An itsy-bitsy spider made a tidy webby inside the thing which totally immobilized the tippy part. I am especially grateful to my 6'4" neighbor boy, Justin, for getting the thing off the fence post. I just don't do ladders anymore.
When it quit working in the midst of the biggest storm we've seen in 5 years, I impulsively ordered a new one through Amazon. Pig-in-a-poke! I just assumed that it read to the nearest 0.01". Nope. 0.04" So, it would have failed to register probably 10% of our typical little "storms". The "Good Old" is by LaCrosse. The tipping tub job is by Oregon. It did say that it read in millimeters as well as inches -- hmmm...: 1 mm = 0.0394 inch. Caveat emptor.
UK, need a rain gauge? A millimeter wouldn't amount to much where you live.
Member Since: March 28, 2006 Posts: 0 Comments: 908
2012 was officially the wettest year on record in England.
As a result many British householders have long since ceased measuring rainfall in either millimetres or inches and have instead started keeping count of the number of amateur kayakers that get wedged between the dining table and Welsh dresser.
The more fortunate households merely keep a tally of the number of frogs taking a breather by hanging on to the back doorstep.
It’s a shame about Joe’s footage being usurped by a big eared kid with a dinosaur fetish. You’d think there might be room for both within the 24 hour news cycle, but I understand that things work differently over there.
On my satellite TV I have a minimum choice of CNN EUROPE or CNN AMERICA, ASIAN NEWS NETWORK, AL JAZEERA, FRANCE 24, BBC NEWS 24, SKY NEWS or FOX NEWS.
The latter would do well to contact Joealaska and purchase some DUTCH FOX video so that they could at least be 50% towards remedying their seemingly false promise of a newsy element, thus perhaps avoiding lawsuits under the Misrepresentation Act of 1967.
Unless of course there is some big hurricane news on offer.
Then I know to tune in to FOX because they always have some guy, wearing goggles and a crash helmet, clinging on to a seafront lamppost with one hand and a microphone with the other. This stuff I find endlessly entertaining. I’d never be able to properly gauge the severity of a big US storm system without witnessing how easily a man can lose his dignity facedown in a puddle with a sodden sound boom rammed up his nose. That alone almost justifies their existence within my telly box.
Meanwhile it is reported that no less than 14 ships are making haste to the Kulluk crash site to take part in a giant push-me, pull-you effort which will commence once the 16,791 emergency responders gathered in Anchorage can agree on the best way forward.
Or backwards.
Or sideways.
Right now they are organising an emergency shipment of sunglasses to cope with the glare from all the light reflective responder uniforms being squashed into a mirrored ballroom.
Member Since: February 28, 2009 Posts: 0 Comments: 1207
Don't forget, Joe - while we didn't get to watch your stuff, there are producers out there watching you, now. You're on the short list of folks they'll go to when the next need for file footage comes up. It could be a year away - but it could be tomorrow.
And don't forget to add them to your list of People Who Need To Know about your publications.
Member Since: October 4, 2004 Posts: 196 Comments: 14841
Beell I see Milford Utah on your avitar. How well I remember the thick milkshakes and malts at a local drugstore there, about 25 years ago. Is it still there?
Member Since: July 16, 2009 Posts: 0 Comments: 171
Hey, Joe, I agree with jmx53, that is definitely your footage in the CBS bit that DHaupt had the link for (see post 24). Someone would really have to study it and be very familiar with the footage. I would never in a million years have put the two together without jmx53's very specific heads up. jmx53 deserves a very big kudo.
My guess would be that either the credit is buried at the end of the news cast or they decided they don't need anything for something posted on youtube. In any case, hopefullly the people that matter know where it came from.
Your footage added a very nice touch to the newscast, as everything else was from up in the air--the coast guard or news helicopters, I think.
Congratulations! And thanks to everybody for all the info, 'cause I missed all this until this morning.
And I think shoreacres has some great advice.
Member Since: December 3, 2009 Posts: 5 Comments: 1034
Never really thought much of the "tax evasion" angle here. I'm fairly certain that Shell will pay property tax on exploration assets where ever they spend the winter. It may be cheaper in Washington State but they will pay. If the assessment is cheaper elsewhere-it's a good business decision to move. And it should be obvious that logistical support for any maintenence work planned will be easier and cheaper than a winter in Dutch. Alas, It would have been a good thing for Dutch Harbor.
Since the Kulluk was still in Alaskan waters or "very near the shore" on January 1st, it seems Shell will not escape a tax assement-that seems clear enough. How much may be up for discussion.
State of Alaska says: ...a state petroleum property assessor, James Greeley, said it's not clear that Shell will owe taxes on the oil rig -- whether it was in port, at sea or stranded off Kodiak. The state hasn't decided if the tax on oil and gas exploration property, which is regularly applied to pipelines and other infrastructure, should apply to the mobile oil rig that drilled a partial well last summer in Arctic waters... adn.com
Member Since: September 11, 2007 Posts: 126 Comments: 13068
The Edison Chouest Company built and owns the Aiviq. The following is from the Anchorage News...... I bet the state won't tax the Shell equipment !!!
Contributing to Alaska congressmen Since 2010, family members of the company with humble beginnings that is now believed to be worth billions, have spent at least $170,000 in campaign donations to Alaska's Congressional delegation.
• U.S. Sen. Mark Begich has already landed more than $30,000 from Chouest for his 2014 re-election bid.
• Sen. Lisa Murkowski landed $40,800 from the company for her 2010 re-election efforts.
• Rep. Don Young pulled in $32,000 during the same election cycle – and for 2012, the family supported him with $66,400 in donations.
Those are the minimum amounts only from donors with the last name of Chouest, and they don’t include what the company spent on lobbying. Edison Chouest also owns several other companies that may have donated separately.
Member Since: July 27, 2008 Posts: 0 Comments: 2697
The tax situation was never clear, a decision on the Shell equipment was due on Jan 15.
However.
An Unalaska reporter named Jim Paulin asked if the tax had influenced the decision to move the Kulluk before Christmas. Shell spokesman Curtis Smith replied by email on Dec 27 saying "the current tax structure related to vessels of the type influenced the timing of our departure."
Mr Smith later said he had chosen his words badly, saying "Taxes were a consideration, but they were not among the main drivers for our decision to begin moving the Kulluk. Operational decisions are ultimately governed by safety."
He may have forgotten who he worked for just for the briefest of moments, but having the Kulluk run aground seems to have acted as a reminder...
Member Since: February 28, 2009 Posts: 0 Comments: 1207
You may be right, MissNadia. Property tax assessment for motor vessels with a home port are handled differently under most tax codes but Chouest definitely has an interest and an investment in Alaska!
There exists a real possibility that Shell will not return to the Beaufort and Chukchi Seas next year. Most of it may be due to the time constraints getting two drilling rigs ready, and lingering compliance issues resolved before Summer 2013.
Pouring salt on a wound in the form of a full year's property tax may have some influence in Shell's commitment to quickly return. The State of Alaska wants clean air and water and revenue. They may cut Shell some slack.
Member Since: September 11, 2007 Posts: 126 Comments: 13068
If Shell can save a few million by moving their equipment south, and save a few million more in over-winter costs and planned maintenance, it is not a crime to consider the tax burden in making a business decision.
Both statements are not necessarily at odds. It is a much harder "sell" to place the ultimate decision-making process on "safety".
"the current tax structure related to vessels of the type influenced the timing of our departure."
"Taxes were a consideration, but they were not among the main drivers for our decision to begin moving the Kulluk. Operational decisions are ultimately governed by safety."
Member Since: September 11, 2007 Posts: 126 Comments: 13068
On further musings; If Washington State and Alaska use Jan 1 as a "snapshot" of taxable property within the state (and a cursory look at the tax codes indicates they do) for the previous 365 days, and the Kulluk was not in AK or WA jurisdictional waters (3 miles) on that date (in transit) do they owe any tax to either?
It would be interesting to ponder the late departure from Alaska (they were essentially ready to leave in early November) as a masterful act of timing to avoid or limit taxation in both AK and WA.
Perhaps we have a lurking tax assessor among us.
Member Since: September 11, 2007 Posts: 126 Comments: 13068
Quoting MissNadia: I believe Kulluk grounded on 31 December...That means Alaska has her if the politicians don't find a loop hole in the tax code.
Ah, MissNadia, "The best laid plans of mice and men..."
A sad tale of a poet's apology (Robert Burns) to a mouse and family after he ran over their nest with his plow as winter approached. One of many modern translations:
To a mouse
Small, crafty, cowering, timorous little beast, O, what a panic is in your little breast! You need not start away so hasty With argumentative chatter! I would be loath to run and chase you, With murdering plough-staff.
I'm truly sorry man's dominion Has broken Nature's social union, And justifies that ill opinion Which makes you startle At me, your poor, earth born companion And fellow mortal!
I doubt not, sometimes, but you may steal; What then? Poor little beast, you must live! An odd ear in twenty-four sheaves Is a small request; I will get a blessing with what is left, And never miss it.
Your small house, too, in ruin! Its feeble walls the winds are scattering! And nothing now, to build a new one, Of coarse grass green! And bleak December's winds coming, Both bitter and keen!
You saw the fields laid bare and wasted, And weary winter coming fast, And cozy here, beneath the blast, You thought to dwell, Till crash! the cruel plough passed Out through your cell.
That small bit heap of leaves and stubble, Has cost you many a weary nibble! Now you are turned out, for all your trouble, Without house or holding, To endure the winter's sleety dribble, And hoar-frost cold.
But little Mouse, you are not alone, In proving foresight may be vain: The best laid schemes of mice and men Go often awry, And leave us nothing but grief and pain, For promised joy!
Still you are blest, compared with me! The present only touches you: But oh! I backward cast my eye, On prospects dreary! And forward, though I cannot see, I guess and fear!
Member Since: September 11, 2007 Posts: 126 Comments: 13068
In the UK over the past few months there has been quite a backlash against certain major international companies who, it has been discovered, have habitually failed to ANY pay corporation tax on their profitable businesses for YEARS.
Amazon, Google, Starbucks, Ikea....all very successful in the UK. Some paying 0% tax, others paying maybe 0.25% tax.
These major companies have employed very expensive accountants to find loopholes within UK tax codes that allow them to avoid payments. They do this by various methods including taking customers payments through Luxembourg's banking system, thus incurring a lower taxable rate, or by creatively making their accounts read as though they are making no profit from UK customers (in 14 years of busy trading) despite telling shareholders a profitable year was had.
There is a difference, at least under British tax law, between tax EVASION and tax AVOIDENCE. The first is illegal and prosecutable, the second is merely 'good business sense' – at least in some peoples eyes.
In my eyes it is immoral. I am not anti big business, and I understand they have a responsibility to shareholders to maximise profits. But that does not, and should not, override any more deep seated and important moral responsibilities when looking at THE BIGGER PICTURE. Especially the one that has recently reared its ugly head.
The Greeks failed to collect tax payments efficiently over many years. Now they are foraging for food and fuel in the woods whilst relying on fellow European tax payers to cover heavy interest payments on debts they will NEVER be able to clear.
Our tax system is an excessively complicated, multi layered beast and making changes via due legislative process is a cumbersome business that ALWAYS results in clever dick company accountants finding yet more holes to fish through. This has been the case since WW2, though it has been recently complicated further by businesses existing and profitably trading in a country without any visible or tangible assets. Ageing tax code was not written to include newfangled internetty type 'thin air' stuff. Nor was it written to cover drilling for oil off the coast of Alaska it would seem.
Interpretation of badly written law is open to a free for all across boardroom tables worldwide. And they have the money, power and influence to have it kept all their way.
The main factor here in the UK is that the ordinary British taxpayer is being squeezed like never before. Recently our government has decreased/ removed 'in work' welfare payments for the low paid (severely affecting women and the disabled in particular), increased taxes (except for their mega wealthy old school pals) and slashed huge numbers of government jobs and infrastructure projects in attempts to cut a large spending deficit (and so far failing to do so).
The impact has been a flat lining economy with zero growth, a double (possibly soon triple) dip recession, big rises in unemployment whilst under employment is rife, non existent wage rises and huge pressures on household incomes from increased food, transport and utility bills across the board. We are a nation eating into our personal savings and retirement funds to keep our heads above water in the here and now.
So when it became apparent that these companies were simply choosing to avoid paying their fair share towards the costs of running this country they felt something of a stinging public backlash. Starbucks found themselves with empty coffee shops and protesters marching up and down the street outside their doors. Their PR people were grinding teeth instead of coffee.
As a direct result Starbucks decided they would like to contribute £20m to Her Maj's Revenue Service in 2013/14 - “whether or not they make a profit”.
Nice of them.
I wish I could pluck an arbitrary figure out the air like that but sadly I'm required to produce documentation that PROVE my earnings before a very definite tax demand, minus loopholes, plops onto my doormat twice yearly.
Of course global business has options available to it that don't exist to it's competitors domestic business. Google, when looking for a European base, opted for Ireland's deliberately lowered corporation tax rates. That is where they set up their sales and marketing division. Free global market forces are fine and dandy and absolutely the way of the modern world. Right up until Ireland faced bankruptcy after the banking crash and British taxpayers were asked to hand over many billions in bail out funds to help keep Ireland afloat.
What has all this to do with Shell?
Using Mr Smith's email as evidence, their expectation was that they MIGHT save themselves a few bucks in tax by shifting the Kulluk in December. They could have moved earlier but they didn't. Indeed they had already announced the Kulluk would be over wintering in Dutch. What changed?
If further maintenance work were needed on the very recently refurbished and severely under-employed rig (work costing a whopping $292m in early 2012) then that was not mentioned in November 2012.
Shell have big responsibilities in Alaska. HUGE ONES. They are the first oil company to go up there, others have permits and are coming hot on their tails. They have had the benefit of being able to watch from the wings and learn from Shell's very public mistakes.
So, to my mind, Shell really can't AFFORD to behave in a manner which makes it even APPEAR they MIGHT INTEND on putting profits first.
If operational decisions are ultimately governed by safety then moving the Kulluk mid winter was in really POOR JUDGEMENT. And I don't just say that with easy hindsight. I live 5000 miles away, but I KNEW that the towed, container laden, barges only operate into and out of Dutch Harbor during the spring and summer months BECAUSE OF THE VERY FREQUENT POOR WEATHER CONDITIONS. If it is too risky to shift a regular shaped barge mid winter then why was it thought OK to move the much more tricky Weeble Wobble Kulluk?
I also knew that the route taken sees massive storm force winds on a very regular basis. Merely enjoying a handful of episodes of Deadliest Catch informs you of that much, most of that fleet arrives in Dutch after a mid winter voyage from the south. UMPTEEN TIMES those boats encountered NASTY weather just getting into Dutch from their home ports. A four week, 4mph voyage seemed LIKELY to encounter such weather. The salvage work seems LIKELY to have to sit out such weather. The continuing voyage to Seattle, should it happen in winter, seems LIKELY to meet big weather again. If the timing of departure was left to the Aiviqs captain, as Shell now say, how much covert pressure had been placed upon his shoulders? If not by Shell then by the Aiviqs owners, Edison Chouest.
Why did they think just using the Aiviq SOLO was enough? They used as many as 4 tugs to get it up to Dutch in the summer. Who decided not to have a plan B? They were fortunate the tow line broke so close to Kodiak Coast Guard base, a mere 30 minutes flight time away. The area they plan to drill in means towing the Kulluk in potentially very rough seas 1000 miles from nearest rescue services. Anything less than a viable lifesaving plan B, C and D is coming up short in terms of GOOD JUDGEMENT.
They broke 5 tow lines in this storm. The Aiviqs engine trubba was not a direct contributory factor given the timing. The line first broke a day before the engines conked out. They could not hold her pendulous weight in the full force of the storms, this despite Shell's assurances that the Aiviq was plenty powerful enough to cope with the task in ANY weather conditions. Who told them that? The company leasing it to them? During the rescue effort Shell also said the Alert tug was the 'only other boat' (other than the Aiviq) capable of towing the Kulluk alone. Then the Alert had to let loose her tow line to 'ensure the safety of her 9 crew'. Even the fully operational Aiviq and the Nanuq TOGETHER could not hold the Kulluk. If there was a safe and effective method of towing her in heavy weather then they hadn't found it as of December 31 2012. Do they have it now?
I hope so.
I hope they start showing some better judgement from now on.
I can't help thinking the worlds unstinting demand for their product is putting us on a collision course for a major disaster in the near future. It concerns me that they seem to be operating at least 20 or 30 years ahead of having the necessary infrastructure, planning and knowledge to even come close to doing this task “governed by safety”.
Where is the GOOD JUDGEMENT in that?
Member Since: February 28, 2009 Posts: 0 Comments: 1207
Livermore had a whopping 0.37" of rain out of this last storm which ended this morning. Models are showing clear for the next ten days -- that is the stuff of our typical January drought. I sure hope not.
Excellent article UK! Your should be working for Newsweek or MSNBC. I want to see you on The Rachel Maddow Show (TRMS).
Member Since: March 28, 2006 Posts: 0 Comments: 908
They are preparing to move her 30 miles into the more sheltered Kiliuda Bay on Kodiak Island whilst they have a weather window (and an armada of tugs to help...)
Member Since: February 28, 2009 Posts: 0 Comments: 1207
I guess it will cost Shell a lot more than the $7M they were trying to avoid in taxes (even if AK is not assessing any taxes after all this), just to get the Kulluk afloat again and repair her... methinks, it would have been cheaper to keep her in Dutch Harbor, but then, that's just my NSHO.
Member Since: January 6, 2005 Posts: 17 Comments: 1496
But a state petroleum property assessor, James Greeley, said it's not clear that Shell will owe taxes on the oil rig -- whether it was in port, at sea or stranded off Kodiak. The state hasn't decided if the tax on oil and gas exploration property, which is regularly applied to pipelines and other infrastructure, should apply to the mobile oil rig that drilled a partial well last summer in Arctic waters.
"This is the first time that something like (that rig has) been in Alaska," Greeley said, so there's no taxing precedent in recent memory. The rig splits time between federal and Alaska waters, he said.
Read more here: http://www.adn.com/2013/01/04/2742776/kulluk-poses -some-ticklish-tax.html#storylink=cpy
Member Since: July 27, 2008 Posts: 0 Comments: 2697
There are many examples that demonstrate our dedication to protecting the environment. For example, Shell banned the use of Styrofoam cups onboard any Alaska operating company owned or contracted vessel in order to assure cups do not blow into the water.
Member Since: September 11, 2007 Posts: 126 Comments: 13068
So far so good with the Kulluk. We may be reaching the end of the news cycle for this story. Fellow JoeAlaska bloggers may be reaching the end of their good-natured patience for these long cut-and-paste jobs by this blogger. So maybe room for one more-From The Baker Institute for Public Policy at Rice University
Despite their alleged non-partisan stance on issues of the day, some of their support is a bit oily. Nevertheless, some issues raised in a blog penned by 4 undergraduate interns as they traveled Alaska this past summer may point to "What's Next?"
No rhyme or reason to what has been included here other than I found it "interesting". One of the most interesting snippets buried in the paper:
...The Department of Energy (DOE) and National Energy Technology Laboratory (NETL) predict ANWR’s peak production to be close to 958,000 barrels per day. This would represent close to 5% of 2010 U.S. consumption. The projections for combined peak production of the Chukchi and Beaufort Seas is not much different at a little over 1 million barrels per day, or 5.6% of consumption...
So...all of this (ANWR and Offshore) is about 10-12% of our daily oil requirements at peak production. True enough, looking at peak production only is an oversimplification. Some facts and figures farther down the post estimate these reserves would last approximately 4 yrs at 2010 consumption.
I think I could cut my oil usage by 10% without an extreme hardship and have a very good reason to make the effort..
The full mind-numbing and eye-crossing paper can be found here
During the summer of 2012, the James A. Baker III Institute for Public Policy brought together a group of four Rice undergraduate interns from diverse academic disciplines to travel to Alaska report on the sustainable development challenges facing the state.
Does Drilling in ANWR Make More Sense than the Alaskan Offshore?
...Even as production declines at Prudhoe Bay, the state’s future in petroleum production may not be so grim. The United States Geological Survey (USGS) estimates that thirteen percent of the world’s remaining undiscovered oil is located in the Arctic, with a very large portion located in Alaska...
Some of this oil is on land in the “1002 Area” of the Arctic National Wildlife Refuge (ANWR) as well as offshore in the Chukchi and Beaufort Seas.
Alaskans hope to increase revenues, as well as preserve the life of the Trans-Alaska Pipeline System (TAPS). TAPS has been carrying oil from Alaska’s North Slope to refineries in southern Alaska and for export since production began in Prudhoe Bay in 1977. Too little production (some estimate as low as 70,000 barrels per day) would force the pipeline to be abandoned...
The embedded link (above) points to an article from Popular Science/Feb 2012 with a small portion reproduced below:
Oil production in Alaska’s North Slope oil fields has declined every year since production peaked in 1988, and the consortium of energy companies that own the line say they are worried: If production slows down too much, the pipeline can become unsafe—or at least uneconomical—to run. But some watchdogs say the industry may be fudging its numbers as part of a ploy to get access to new, potentially rich oil fields.
Back to the Baker Institute Paper:
...The Obama administration’s preference for offshore drilling in Alaska compared to a political compromise on ANWR makes sense politically inside the Beltway but here in Alaska, many ponder whether it makes sense on a technical and practical level...
...The chart above produced with numbers from the USGS and Mineral Management Service, projects technically recoverable oil for the 1002 Area of ANWR and the Chukchi and Beaufort Seas. These estimates show significant untapped reserves in Alaska. At mean estimates, ANWR represents a little over a year of U.S. 2010 consumption. Offshore oil estimates equates to 2.8 years of American oil demands...
...with maximum production rates decades away for both ANWR and offshore oil, according to DOE/NETL. The bottom line is that Alaskan oil production rates are likely to fall for a while before they can recover, no matter the outcome of the politics of opening these new areas for drilling... Note*Department of Energy (DOE)/National Energy Technology Laboratory (NETL)
...If oil production were to begin in both the Chukchi and Beaufort Seas today, Alaska would see very little benefit. As law currently stands, the federal government would receive the benefits of new production taxes and royalties offshore. The oil is located in federal, rather than state waters, meaning the state government would see little change in its oil revenues. A 2011 assessment (done with price assumptions between $56 and $83 per barrel) estimated the Alaskan state government would receive only about $15.4 billion in revenue over a 50-year period. This equates to just over $307 million annually. Over the same period, the federal government would make close to $167.3 billion, or $3.3 billion annually...
Another jump out of the Baker Institute Paper:
White House, key Congress members still committed to Arctic drilling-adn.com/Jan 3, 2012 WASHINGTON — Critics want a halt to offshore Arctic drilling in the wake of Shell’s latest mishap in the waters off Alaska but there’s no sign the Obama administration and key members of Congress are backing off their support for drilling in the sensitive region...
Not much comment coming out of the White House on this. No wonder the White House is quiet about Offshore and dead-set against ANWR...per the folks at the Baker Institute...
...Oil royalties from ANWR production, however, would likely be split 50-50 between the state and federal governments. At a price of $60 per barrel, the Alaskan and federal governments could expect to receive $28.5 billion in royalties over a thirty-year period. This equates to $950 million annually for the state, more than three times what it would receive from offshore oil...
...Even if oil is found and produced offshore and drilling were permitted in ANWR, hurdles would still remain before that oil could get to market. Oil produced from the Chukchi Sea would require a long, 300-mile pipeline connection to TAPS. Constructing such a pipeline could be a significant obstacle for Shell and other oil companies who hope to produce offshore. By contrast, in ANWR, much of the oil is located in the western part of the 1002 Area, which is only about thirty miles from TAPS. While oil in the Beaufort Sea may only have to be transported in a new pipeline for only 40 miles, a pipeline from the Chukchi (where there is expected to be more oil) would have to be over 300 miles long...
...The project of connecting a pipeline from the Chukchi Sea to TAPS will be quite daunting. In an article for the Alaska Dispatch, pipeline engineer Erling Westlien explained, “it’s almost [as big a project as building] another trans- Alaskan Pipeline.” This may be the largest problem offshore production faces in Alaska...
Member Since: September 11, 2007 Posts: 126 Comments: 13068
I've been following that guy who calls himself the Alaskan Pioneer--the one Joe mentioned a while back. This is the guy staying by himself on Latouche Island, AK in a cabin he built himself, with materials he brought with him. He also brought provisions, although he does catch/gather fresh food also.
It is a little contrived for me, and the guy is just not really that interesting. It is just him and one dog, so there isn't much interaction. They had a goat, but he just announced that he and the dog ate the goat several months back for some reason LOL. It might have been interesting if he were a scientist or researcher of some sort and he had interesting things to tell me about the nature around him, but that is all pretty brief. His photography is not that great. If he is having deep, philosophical thoughts, he is keeping them to himself, so the Emersonian angle is not there. Weird!
I find JoeAlaska's blog a lot more interesting, since it is about something real and unique. And Joe, even with as little free time as he has, is pretty good at ferreting out the details that will interest people. It is funny to me that the other fellow has all these followers because of the TV endorsement and publicity. If they do make a TV show out of it, the editors have their work cut out for them.
Maybe it is just me, and maybe I'm missing something.
Member Since: December 3, 2009 Posts: 5 Comments: 1034
Arbie- Alaskan Pioneer ate the goat? If I were the dog, I would be sleeping with one eye open.
Thanks for all the interesting info on the oil drilling and related topics. If it weren't for you bloggers, I would have a really limited education on the subjects. Between Joe's photos and posts and all the posts from the bloggers, I get to be a wealth of information, especially to my husband and neighbors. ;-)
Member Since: July 16, 2005 Posts: 0 Comments: 276
Ah, Arbie! There you are at last. I found you at the bottom of a very deep well of commentary.
I agree with you about Alaskan Pioneer. I followed him for about a week and quit mostly because I had better things to do. I suspect that the goat died of boredom so he and dog had to eat it before it smelled up the place and attracted bears.
In all, I think it is just his idea of a publicity stunt upon which he hopes for future revenues. Of course he just may be right. H.L. Mencken famously observed:
No one ever lost a nickel by underestimating the taste of the American public.
Member Since: March 28, 2006 Posts: 0 Comments: 908
Not only will you be able to leave comments on this blog, but you'll also have the ability to upload and share your photos in our Wunder Photos section.
Page: 1 | 2 — Blog Index
Coast Guard said the Discoverer only came with in about 100yds from shore. Shell said the vessel did not run aground but "stopped very near the coast".
The truth will be on the news this evening!
That's fantastic :)
I don't have TV access, but I bet it will be great.
CBS sources say that when criminal investigators arrived to interview the crew the company had already brought in lawyers and all employees declined to be interviewed.
UK, were the pollution control issues related to air quality?
I am thrilled for you Joe. It is about time these folks know about your awesome ability.
They talk about issues regarding oil discharge resulting in enforcement notices in Sept 2012 and bilge water management, ventilation and engine problems amongst 23 deficiences found after a Coast Guard inspection last May.
The investigations have been going on for quite some time it seems. The Kulluk had 3 enforcement warnings for being a pollution source from May 2012, and 19 deficiences in electrical and maintenance systems.
Oh, and the Kulluk's fairy lights are all but buggered...
Oh, ok, the Coast Guard with a list. Thank you. I was wondering if it was an ongoing EPA/Clean Air Act permit problem.
Several links collected over the last few days dealt with a continuing issue with nitrogen oxides and particulate emissions for the Discoverer.
EPA issued a Clean Air Act permit for the Discoverer in January of 2012.
Shell Discoverer Air Permit - Chukchi Sea
Shell submitted an application to revise in September of 2012 because they could not meet the original specifications after an expensive refit. The compliance order imposed temporary limits for some emission sources higher than in Shell's permit, but EPA expected the fleet's overall emissions for 2012 to be lower than the original permit allowed due to Shell's shortened operating season.
On November 30th, Shell submitted a revised application to the June permit revision application because;
"The changes requested are based on actual equipment performance during the 2012 operating season, which includes excess emissions and permit deviations identified by Shell and by EPA during a September 2012 inspection of the Discoverer."
After a revised permit, they still could not meet the requirements. And then, the Kulluk ran aground-or perhaps "stopped very near the beach". And there the issue lay for a while. An addition to the EPA permit file was added by EPA on December 31st giving Shell a deadline (Jan 11) to submit info so a decision could be made on the permit application. The date is probably just a coincidence with the Kulluk grounding...
Incompleteness Determination Letter - December 31, 2012.
"...Continuing with that process, and to complete the revision application, the EPA requests that Shell now formally submit all of the previously requested information, along with any information that has not yet been submitted, so that we can continue to process
the application. Please provide the information requested in Attachment A by January 11, 2013.
Please notify Natasha Greaves if a complete response is not possible by this date.
Your application is considered incomplete until this information is received and evaluated and
the EPA has determined that the application contains all of the information needed for the EPA
to propose a permit decision. Note that as the EPA continues review of your application, we may
identify further information that will be essential to enable the EPA to continue processing your
application and make a permit decision, including information that may be needed in response to
public comments..."
In the interest of fairness and at the risk of sounding uncaring I thought perhaps the media was trying to add hype where none is required. One more smoke belching ship plying the Arctic would seem to be minor compared to the greater dangers of drilling for oil off the North Slope. But in light of your post, and other bits and pieces-an ever-growing pile of incompetence.
Re the Kulluk Kristmas lights, The Feast of Epiphany comes early. Ground Hog Day is just around the corner.
LATER AFTER WATCHING THE CBS EVENING NEWS:
Wha wha what? You were bumped by some big-eared kid with dinosaurs on his brain! Are you sure that it was for tonight?
Here is a LINK to a CBS story earlier today that contains some footage of Kulluk and Noble Discoverer but, I don't think any of it is Joe's. Certainly no credit given. The jerks!
Shell is required to have two rigs when/if they drill into any hydrocarbon play next summer. As a back up to quickly begin drilling a relief well if something went badly wrong. A relief well was what eventually capped the Macondo well in the Gulf of Mexico.
With the Kulluk aground and the Discoverer under fire, it's been a bad week for Shell.
Maybe they will use it on the morning news show ..
Having been contacted by two major networks in 12 hours was pretty cool. The first note from NBC was missed well beyond deadline. I saw the CBS note right away and responded with an email. That producer called me within a couple minutes.
She told me the story would run tonight, that I would get a real name credit, and that I would also get a DVD of the newscast.
You know the rest.
I am waiting to hear from my favorite network...FOX.
Beell, check out my youtube stuff, especially NOBLE DISCOVERER on the beach. Does that look like a hundred yards to you?
THANKS for all the positive comments. I will now slink back into the darkness...
I don't blame you for posting the announcement. Publicity is good! A pile of us want to see your photography and unique talent of bringing all of us along where ever you go or what ever you write about gain an even wider audience. (that right there should get me an autographed copy of your book, yes?)
Actually, they did use some of Joe's footage! It is uncredited, but look at :14 - :19 in the video on the CBS link and compare to :43 - :47 on Joe's video titled "Kulluk and Aiviq" Congratulations Joe!
I'm not sure if they do 2 separate broadcasts for Eastern time and the West coast, but I was watching when this story was broadcast at 7am Pacific time. Depending on what time they Emailed you, they may have used this footage before asking permission to use it.
But, now that they have you on their radar, you'll probably hear from them again.
The mysterious malfunction of my tipping bucket rain gauge is discovered and fixed. An itsy-bitsy spider made a tidy webby inside the thing which totally immobilized the tippy part. I am especially grateful to my 6'4" neighbor boy, Justin, for getting the thing off the fence post. I just don't do ladders anymore.
When it quit working in the midst of the biggest storm we've seen in 5 years, I impulsively ordered a new one through Amazon. Pig-in-a-poke! I just assumed that it read to the nearest 0.01". Nope. 0.04" So, it would have failed to register probably 10% of our typical little "storms". The "Good Old" is by LaCrosse. The tipping tub job is by Oregon. It did say that it read in millimeters as well as inches -- hmmm...: 1 mm = 0.0394 inch. Caveat emptor.
UK, need a rain gauge? A millimeter wouldn't amount to much where you live.
As a result many British householders have long since ceased measuring rainfall in either millimetres or inches and have instead started keeping count of the number of amateur kayakers that get wedged between the dining table and Welsh dresser.
The more fortunate households merely keep a tally of the number of frogs taking a breather by hanging on to the back doorstep.
It’s a shame about Joe’s footage being usurped by a big eared kid with a dinosaur fetish. You’d think there might be room for both within the 24 hour news cycle, but I understand that things work differently over there.
On my satellite TV I have a minimum choice of CNN EUROPE or CNN AMERICA, ASIAN NEWS NETWORK, AL JAZEERA, FRANCE 24, BBC NEWS 24, SKY NEWS or FOX NEWS.
The latter would do well to contact Joealaska and purchase some DUTCH FOX video so that they could at least be 50% towards remedying their seemingly false promise of a newsy element, thus perhaps avoiding lawsuits under the Misrepresentation Act of 1967.
Unless of course there is some big hurricane news on offer.
Then I know to tune in to FOX because they always have some guy, wearing goggles and a crash helmet, clinging on to a seafront lamppost with one hand and a microphone with the other. This stuff I find endlessly entertaining. I’d never be able to properly gauge the severity of a big US storm system without witnessing how easily a man can lose his dignity facedown in a puddle with a sodden sound boom rammed up his nose. That alone almost justifies their existence within my telly box.
Meanwhile it is reported that no less than 14 ships are making haste to the Kulluk crash site to take part in a giant push-me, pull-you effort which will commence once the 16,791 emergency responders gathered in Anchorage can agree on the best way forward.
Or backwards.
Or sideways.
Right now they are organising an emergency shipment of sunglasses to cope with the glare from all the light reflective responder uniforms being squashed into a mirrored ballroom.
And don't forget to add them to your list of People Who Need To Know about your publications.
I see Milford Utah on your avitar.
How well I remember the thick milkshakes and malts at a local drugstore there, about 25 years ago. Is it still there?
My guess would be that either the credit is buried at the end of the news cast or they decided they don't need anything for something posted on youtube. In any case, hopefullly the people that matter know where it came from.
Your footage added a very nice touch to the newscast, as everything else was from up in the air--the coast guard or news helicopters, I think.
Congratulations! And thanks to everybody for all the info, 'cause I missed all this until this morning.
And I think shoreacres has some great advice.
I must have entered the wrong coordinates with my avi pic. I'm in Houston. I wish I could go to Utah right now to answer your question!
Also sent you a quick wu-mail with a more detailed explanation of my error.
;-)
Update #24: Unified Command confirms Kulluk is sound and fit to tow-Jan 5, 2013
No word on whether it's fit to drag...
(click any graphic for larger image)
Links (below) and location map to three weather observation stations that update on a regular basis.
Station ALIA2-Alitak, AK
Station KDAA2-Kodiak Island, AK
Station AMAA2-East Amatuli Island Light, AK
National Data Buoy Data Center (ndbc.noaa.gov)
Forecast Tide tables for Alitak (ALIA2) top, and Kodiak (KDAA2) bottom. January 5 - January 12.
NOAA-Tides and Currents
Since the Kulluk was still in Alaskan waters or "very near the shore" on January 1st, it seems Shell will not escape a tax assement-that seems clear enough. How much may be up for discussion.
State of Alaska says:
...a state petroleum property assessor, James Greeley, said it's not clear that Shell will owe taxes on the oil rig -- whether it was in port, at sea or stranded off Kodiak. The state hasn't decided if the tax on oil and gas exploration property, which is regularly applied to pipelines and other infrastructure, should apply to the mobile oil rig that drilled a partial well last summer in Arctic waters...
adn.com
Contributing to Alaska congressmen
Since 2010, family members of the company with humble beginnings that is now believed to be worth billions, have spent at least $170,000 in campaign donations to Alaska's Congressional delegation.
• U.S. Sen. Mark Begich has already landed more than $30,000 from Chouest for his 2014 re-election bid.
• Sen. Lisa Murkowski landed $40,800 from the company for her 2010 re-election efforts.
• Rep. Don Young pulled in $32,000 during the same election cycle – and for 2012, the family supported him with $66,400 in donations.
Those are the minimum amounts only from donors with the last name of Chouest, and they don’t include what the company spent on lobbying. Edison Chouest also owns several other companies that may have donated separately.
However.
An Unalaska reporter named Jim Paulin asked if the tax had influenced the decision to move the Kulluk before Christmas. Shell spokesman Curtis Smith replied by email on Dec 27 saying
"the current tax structure related to vessels of the type influenced the timing of our departure."
Mr Smith later said he had chosen his words badly, saying
"Taxes were a consideration, but they were not among the main drivers for our decision to begin moving the Kulluk. Operational decisions are ultimately governed by safety."
He may have forgotten who he worked for just for the briefest of moments, but having the Kulluk run aground seems to have acted as a reminder...
There exists a real possibility that Shell will not return to the Beaufort and Chukchi Seas next year. Most of it may be due to the time constraints getting two drilling rigs ready, and lingering compliance issues resolved before Summer 2013.
Pouring salt on a wound in the form of a full year's property tax may have some influence in Shell's commitment to quickly return. The State of Alaska wants clean air and water and revenue. They may cut Shell some slack.
Both statements are not necessarily at odds. It is a much harder "sell" to place the ultimate decision-making process on "safety".
"the current tax structure related to vessels of the type influenced the timing of our departure."
"Taxes were a consideration, but they were not among the main drivers for our decision to begin moving the Kulluk. Operational decisions are ultimately governed by safety."
It would be interesting to ponder the late departure from Alaska (they were essentially ready to leave in early November) as a masterful act of timing to avoid or limit taxation in both AK and WA.
Perhaps we have a lurking tax assessor among us.
Ah, MissNadia, "The best laid plans of mice and men..."
A sad tale of a poet's apology (Robert Burns) to a mouse and family after he ran over their nest with his plow as winter approached. One of many modern translations:
To a mouse
Small, crafty, cowering, timorous little beast,
O, what a panic is in your little breast!
You need not start away so hasty
With argumentative chatter!
I would be loath to run and chase you,
With murdering plough-staff.
I'm truly sorry man's dominion
Has broken Nature's social union,
And justifies that ill opinion
Which makes you startle
At me, your poor, earth born companion
And fellow mortal!
I doubt not, sometimes, but you may steal;
What then? Poor little beast, you must live!
An odd ear in twenty-four sheaves
Is a small request;
I will get a blessing with what is left,
And never miss it.
Your small house, too, in ruin!
Its feeble walls the winds are scattering!
And nothing now, to build a new one,
Of coarse grass green!
And bleak December's winds coming,
Both bitter and keen!
You saw the fields laid bare and wasted,
And weary winter coming fast,
And cozy here, beneath the blast,
You thought to dwell,
Till crash! the cruel plough passed
Out through your cell.
That small bit heap of leaves and stubble,
Has cost you many a weary nibble!
Now you are turned out, for all your trouble,
Without house or holding,
To endure the winter's sleety dribble,
And hoar-frost cold.
But little Mouse, you are not alone,
In proving foresight may be vain:
The best laid schemes of mice and men
Go often awry,
And leave us nothing but grief and pain,
For promised joy!
Still you are blest, compared with me!
The present only touches you:
But oh! I backward cast my eye,
On prospects dreary!
And forward, though I cannot see,
I guess and fear!
Amazon, Google, Starbucks, Ikea....all very successful in the UK. Some paying 0% tax, others paying maybe 0.25% tax.
These major companies have employed very expensive accountants to find loopholes within UK tax codes that allow them to avoid payments. They do this by various methods including taking customers payments through Luxembourg's banking system, thus incurring a lower taxable rate, or by creatively making their accounts read as though they are making no profit from UK customers (in 14 years of busy trading) despite telling shareholders a profitable year was had.
There is a difference, at least under British tax law, between tax EVASION and tax AVOIDENCE. The first is illegal and prosecutable, the second is merely 'good business sense' – at least in some peoples eyes.
In my eyes it is immoral. I am not anti big business, and I understand they have a responsibility to shareholders to maximise profits. But that does not, and should not, override any more deep seated and important moral responsibilities when looking at THE BIGGER PICTURE. Especially the one that has recently reared its ugly head.
The Greeks failed to collect tax payments efficiently over many years. Now they are foraging for food and fuel in the woods whilst relying on fellow European tax payers to cover heavy interest payments on debts they will NEVER be able to clear.
Our tax system is an excessively complicated, multi layered beast and making changes via due legislative process is a cumbersome business that ALWAYS results in clever dick company accountants finding yet more holes to fish through. This has been the case since WW2, though it has been recently complicated further by businesses existing and profitably trading in a country without any visible or tangible assets. Ageing tax code was not written to include newfangled internetty type 'thin air' stuff. Nor was it written to cover drilling for oil off the coast of Alaska it would seem.
Interpretation of badly written law is open to a free for all across boardroom tables worldwide. And they have the money, power and influence to have it kept all their way.
The main factor here in the UK is that the ordinary British taxpayer is being squeezed like never before. Recently our government has decreased/ removed 'in work' welfare payments for the low paid (severely affecting women and the disabled in particular), increased taxes (except for their mega wealthy old school pals) and slashed huge numbers of government jobs and infrastructure projects in attempts to cut a large spending deficit (and so far failing to do so).
The impact has been a flat lining economy with zero growth, a double (possibly soon triple) dip recession, big rises in unemployment whilst under employment is rife, non existent wage rises and huge pressures on household incomes from increased food, transport and utility bills across the board. We are a nation eating into our personal savings and retirement funds to keep our heads above water in the here and now.
So when it became apparent that these companies were simply choosing to avoid paying their fair share towards the costs of running this country they felt something of a stinging public backlash. Starbucks found themselves with empty coffee shops and protesters marching up and down the street outside their doors. Their PR people were grinding teeth instead of coffee.
As a direct result Starbucks decided they would like to contribute £20m to Her Maj's Revenue Service in 2013/14 - “whether or not they make a profit”.
Nice of them.
I wish I could pluck an arbitrary figure out the air like that but sadly I'm required to produce documentation that PROVE my earnings before a very definite tax demand, minus loopholes, plops onto my doormat twice yearly.
Of course global business has options available to it that don't exist to it's competitors domestic business. Google, when looking for a European base, opted for Ireland's deliberately lowered corporation tax rates. That is where they set up their sales and marketing division. Free global market forces are fine and dandy and absolutely the way of the modern world. Right up until Ireland faced bankruptcy after the banking crash and British taxpayers were asked to hand over many billions in bail out funds to help keep Ireland afloat.
What has all this to do with Shell?
Using Mr Smith's email as evidence, their expectation was that they MIGHT save themselves a few bucks in tax by shifting the Kulluk in December. They could have moved earlier but they didn't. Indeed they had already announced the Kulluk would be over wintering in Dutch. What changed?
If further maintenance work were needed on the very recently refurbished and severely under-employed rig (work costing a whopping $292m in early 2012) then that was not mentioned in November 2012.
Shell have big responsibilities in Alaska. HUGE ONES. They are the first oil company to go up there, others have permits and are coming hot on their tails. They have had the benefit of being able to watch from the wings and learn from Shell's very public mistakes.
So, to my mind, Shell really can't AFFORD to behave in a manner which makes it even APPEAR they MIGHT INTEND on putting profits first.
If operational decisions are ultimately governed by safety then moving the Kulluk mid winter was in really POOR JUDGEMENT. And I don't just say that with easy hindsight. I live 5000 miles away, but I KNEW that the towed, container laden, barges only operate into and out of Dutch Harbor during the spring and summer months BECAUSE OF THE VERY FREQUENT POOR WEATHER CONDITIONS. If it is too risky to shift a regular shaped barge mid winter then why was it thought OK to move the much more tricky Weeble Wobble Kulluk?
I also knew that the route taken sees massive storm force winds on a very regular basis. Merely enjoying a handful of episodes of Deadliest Catch informs you of that much, most of that fleet arrives in Dutch after a mid winter voyage from the south. UMPTEEN TIMES those boats encountered NASTY weather just getting into Dutch from their home ports. A four week, 4mph voyage seemed LIKELY to encounter such weather. The salvage work seems LIKELY to have to sit out such weather. The continuing voyage to Seattle, should it happen in winter, seems LIKELY to meet big weather again. If the timing of departure was left to the Aiviqs captain, as Shell now say, how much covert pressure had been placed upon his shoulders? If not by Shell then by the Aiviqs owners, Edison Chouest.
Why did they think just using the Aiviq SOLO was enough? They used as many as 4 tugs to get it up to Dutch in the summer. Who decided not to have a plan B? They were fortunate the tow line broke so close to Kodiak Coast Guard base, a mere 30 minutes flight time away. The area they plan to drill in means towing the Kulluk in potentially very rough seas 1000 miles from nearest rescue services. Anything less than a viable lifesaving plan B, C and D is coming up short in terms of GOOD JUDGEMENT.
They broke 5 tow lines in this storm. The Aiviqs engine trubba was not a direct contributory factor given the timing. The line first broke a day before the engines conked out. They could not hold her pendulous weight in the full force of the storms, this despite Shell's assurances that the Aiviq was plenty powerful enough to cope with the task in ANY weather conditions. Who told them that? The company leasing it to them? During the rescue effort Shell also said the Alert tug was the 'only other boat' (other than the Aiviq) capable of towing the Kulluk alone. Then the Alert had to let loose her tow line to 'ensure the safety of her 9 crew'. Even the fully operational Aiviq and the Nanuq TOGETHER could not hold the Kulluk. If there was a safe and effective method of towing her in heavy weather then they hadn't found it as of December 31 2012. Do they have it now?
I hope so.
I hope they start showing some better judgement from now on.
I can't help thinking the worlds unstinting demand for their product is putting us on a collision course for a major disaster in the near future. It concerns me that they seem to be operating at least 20 or 30 years ahead of having the necessary infrastructure, planning and knowledge to even come close to doing this task “governed by safety”.
Where is the GOOD JUDGEMENT in that?
Excellent article UK! Your should be working for Newsweek or MSNBC. I want to see you on The Rachel Maddow Show (TRMS).
They are preparing to move her 30 miles into the more sheltered Kiliuda Bay on Kodiak Island whilst they have a weather window (and an armada of tugs to help...)
But a state petroleum property assessor, James Greeley, said it's not clear that Shell will owe taxes on the oil rig -- whether it was in port, at sea or stranded off Kodiak. The state hasn't decided if the tax on oil and gas exploration property, which is regularly applied to pipelines and other infrastructure, should apply to the mobile oil rig that drilled a partial well last summer in Arctic waters.
"This is the first time that something like (that rig has) been in Alaska," Greeley said, so there's no taxing precedent in recent memory. The rig splits time between federal and Alaska waters, he said.
Read more here: http://www.adn.com/2013/01/04/2742776/kulluk-poses -some-ticklish-tax.html#storylink=cpy
There are many examples that demonstrate our dedication to protecting the environment. For example, Shell banned the use of Styrofoam cups onboard any Alaska operating company owned or contracted vessel in order to assure cups do not blow into the water.
Despite their alleged non-partisan stance on issues of the day, some of their support is a bit oily. Nevertheless, some issues raised in a blog penned by 4 undergraduate interns as they traveled Alaska this past summer may point to "What's Next?"
No rhyme or reason to what has been included here other than I found it "interesting". One of the most interesting snippets buried in the paper:
...The Department of Energy (DOE) and National Energy Technology Laboratory (NETL) predict ANWR’s peak production to be close to 958,000 barrels per day. This would represent close to 5% of 2010 U.S. consumption. The projections for combined peak production of the Chukchi and Beaufort Seas is not much different at a little over 1 million barrels per day, or 5.6% of consumption...
So...all of this (ANWR and Offshore) is about 10-12% of our daily oil requirements at peak production. True enough, looking at peak production only is an oversimplification. Some facts and figures farther down the post estimate these reserves would last approximately 4 yrs at 2010 consumption.
I think I could cut my oil usage by 10% without an extreme hardship and have a very good reason to make the effort..
The full mind-numbing and eye-crossing paper can be found here
During the summer of 2012, the James A. Baker III Institute for Public Policy brought together a group of four Rice undergraduate interns from diverse academic disciplines to travel to Alaska report on the sustainable development challenges facing the state.
Does Drilling in ANWR Make More Sense than the Alaskan Offshore?
...Even as production declines at Prudhoe Bay, the state’s future in petroleum production may not be so grim. The United States Geological Survey (USGS) estimates that thirteen percent of the world’s remaining undiscovered oil is located in the Arctic, with a very large portion located in Alaska...
Some of this oil is on land in the “1002 Area” of the Arctic National Wildlife Refuge (ANWR) as well as offshore in the Chukchi and Beaufort Seas.
Alaskans hope to increase revenues, as well as preserve the life of the Trans-Alaska Pipeline System (TAPS). TAPS has been carrying oil from Alaska’s North Slope to refineries in southern Alaska and for export since production began in Prudhoe Bay in 1977. Too little production (some estimate as low as 70,000 barrels per day) would force the pipeline to be abandoned...
The embedded link (above) points to an article from Popular Science/Feb 2012 with a small portion reproduced below:
Wikipedia
Oil production in Alaska’s North Slope oil fields has declined every year since production peaked in 1988, and the consortium of energy companies that own the line say they are worried: If production slows down too much, the pipeline can become unsafe—or at least uneconomical—to run. But some watchdogs say the industry may be fudging its numbers as part of a ploy to get access to new, potentially rich oil fields.
Back to the Baker Institute Paper:
...The Obama administration’s preference for offshore drilling in Alaska compared to a political compromise on ANWR makes sense politically inside the Beltway but here in Alaska, many ponder whether it makes sense on a technical and practical level...
...The chart above produced with numbers from the USGS and Mineral Management Service, projects technically recoverable oil for the 1002 Area of ANWR and the Chukchi and Beaufort Seas. These estimates show significant untapped reserves in Alaska. At mean estimates, ANWR represents a little over a year of U.S. 2010 consumption. Offshore oil estimates equates to 2.8 years of American oil demands...
...with maximum production rates decades away for both ANWR and offshore oil, according to DOE/NETL. The bottom line is that Alaskan oil production rates are likely to fall for a while before they can recover, no matter the outcome of the politics of opening these new areas for drilling...
Note*Department of Energy (DOE)/National Energy Technology Laboratory (NETL)
...If oil production were to begin in both the Chukchi and Beaufort Seas today, Alaska would see very little benefit. As law currently stands, the federal government would receive the benefits of new production taxes and royalties offshore. The oil is located in federal, rather than state waters, meaning the state government would see little change in its oil revenues. A 2011 assessment (done with price assumptions between $56 and $83 per barrel) estimated the Alaskan state government would receive only about $15.4 billion in revenue over a 50-year period. This equates to just over $307 million annually. Over the same period, the federal government would make close to $167.3 billion, or $3.3 billion annually...
Another jump out of the Baker Institute Paper:
White House, key Congress members still committed to Arctic drilling-adn.com/Jan 3, 2012
WASHINGTON — Critics want a halt to offshore Arctic drilling in the wake of Shell’s latest mishap in the waters off Alaska but there’s no sign the Obama administration and key members of Congress are backing off their support for drilling in the sensitive region...
Not much comment coming out of the White House on this. No wonder the White House is quiet about Offshore and dead-set against ANWR...per the folks at the Baker Institute...
...Oil royalties from ANWR production, however, would likely be split 50-50 between the state and federal governments. At a price of $60 per barrel, the Alaskan and federal governments could expect to receive $28.5 billion in royalties over a thirty-year period. This equates to $950 million annually for the state, more than three times what it would receive from offshore oil...
...Even if oil is found and produced offshore and drilling were permitted in ANWR, hurdles would still remain before that oil could get to market. Oil produced from the Chukchi Sea would require a long, 300-mile pipeline connection to TAPS. Constructing such a pipeline could be a significant obstacle for Shell and other oil companies who hope to produce offshore. By contrast, in ANWR, much of the oil is located in the western part of the 1002 Area, which is only about thirty miles from TAPS. While oil in the Beaufort Sea may only have to be transported in a new pipeline for only 40 miles, a pipeline from the Chukchi (where there is expected to be more oil) would have to be over 300 miles long...
...The project of connecting a pipeline from the Chukchi Sea to TAPS will be quite daunting. In an article for the Alaska Dispatch, pipeline engineer Erling Westlien explained, “it’s almost [as big a project as building] another trans- Alaskan Pipeline.” This may be the largest problem offshore production faces in Alaska...
I've been following that guy who calls himself the Alaskan Pioneer--the one Joe mentioned a while back. This is the guy staying by himself on Latouche Island, AK in a cabin he built himself, with materials he brought with him. He also brought provisions, although he does catch/gather fresh food also.
It is a little contrived for me, and the guy is just not really that interesting. It is just him and one dog, so there isn't much interaction. They had a goat, but he just announced that he and the dog ate the goat several months back for some reason LOL. It might have been interesting if he were a scientist or researcher of some sort and he had interesting things to tell me about the nature around him, but that is all pretty brief. His photography is not that great. If he is having deep, philosophical thoughts, he is keeping them to himself, so the Emersonian angle is not there. Weird!
I find JoeAlaska's blog a lot more interesting, since it is about something real and unique. And Joe, even with as little free time as he has, is pretty good at ferreting out the details that will interest people. It is funny to me that the other fellow has all these followers because of the TV endorsement and publicity. If they do make a TV show out of it, the editors have their work cut out for them.
Maybe it is just me, and maybe I'm missing something.
Thanks for all the interesting info on the oil drilling and related topics. If it weren't for you bloggers, I would have a really limited education on the subjects. Between Joe's photos and posts and all the posts from the bloggers, I get to be a wealth of information, especially to my husband and neighbors. ;-)
I agree with you about Alaskan Pioneer. I followed him for about a week and quit mostly because I had better things to do. I suspect that the goat died of boredom so he and dog had to eat it before it smelled up the place and attracted bears.
In all, I think it is just his idea of a publicity stunt upon which he hopes for future revenues. Of course he just may be right. H.L. Mencken famously observed:
No one ever lost a nickel by underestimating the taste of the American public.
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