PREVENTing AND RESPONding to OIL SPILLS Shell has several decades of operational experience in a number of Arctic and subarctic regions. We take the consequences of any potential incident very seriously. Continuing to build our capability in oil spill prevention and response is a top priority for Shell. We have taken significant steps to make sure we can operate safely and responsibly in the Arctic. Some of our planning and safety measures for preventing and responding to oil spills go beyond regulatory requirements. We recognise oil spill prevention and response capability as a critical element of all plans to develop oil and gas resources in the Arctic. Shell applies a multi-layered well control system designed to minimise risks, so if any one system or device fails it should not lead to a blowout (an uncontrolled upsurge in oil and gas at high pressure). At Shell, these barriers are regularly audited and tested. We have developed highly advanced technology to locate, contain and remove oil in various ice conditions. We know that being able to prevent and respond to oil spills in ice is the right approach if we are to develop energy resources while at the same time protecting the environment and local communities. Having this capability is instrumental to our licence to operate in the Arctic 2 PREVENTing AND RESPONding to OIL SPILLS SPILLS FROM OIL AND GAS ACTIVITIES The oil and gas industry has a strong safety record in Arctic waters. In over 40 years, a total of more than 500 exploratory and production wells have been drilled in the seas off Alaska, Canada, Norway and Russia. This includes more than 150 wells off the coasts of the USA and Canada, with more than 50 in the Beaufort and Chukchi Seas. Shell has drilled 33 wells in Alaska, all but one offshore. During these four decades of offshore operations, there has never been an oil spill caused by a well blowout in state or federal waters in the Alaskan and Canadian Arctic. Test of mechanical skimmer for cleaning up oil spills in the Arctic (SINTEF photo). Deepwater Horizon and our response: PREVENTING SPILLS DURING DRILLING Modern drilling and blowout prevention techniques have significantly reduced the likelihood of a blowout. But as the Deepwater Horizon incident in the Gulf of Mexico (GoM) in 2010 showed, if it does occur the impacts from such an incident can be significant. Shell applies a multi-layered well control system designed to minimise risks. If any system or device fails, others are in place to prevent a blowout. After the spill, Shell took immediate steps to confirm the safety of our operations globally, including a review of operating practices, testing frequencies and training protocols. The Gulf of Mexico tragedy clearly had important consequences for the energy industry. It is essential that we understand the events that led to this unprecedented incident and take steps to further reduce the likelihood of a similar event happening in the future. As recognised by the Presidential Commission report on Deepwater Horizon, some operators such as Shell do operate to a high standard. Based on Shell’s experience, we know that when you design wells properly, tragic incidents such as the Deepwater Horizon one in the GoM should not occur. Wells must be designed for the range of risks anticipated. Operators must also follow established procedures, build in layers of redundancy and proper barriers, properly inspect and maintain equipment, train staff, conduct tests and drills, and focus on safe operations and risk management. Wherever we operate, our safety performance is critically important – for the safety of our staff as well as for the protection of the environment and our neighbours. Our approach to operating in the Arctic is no different. We have had plans in place for many years to deal with an accident of potentially similar impact to that in the GoM in 2010. Before exploration drilling begins, seismic and other surveys provide essential information about the geology of the seabed. They also give us vital information on pressure and temperature fluctuations that could be encountered during drilling. The well itself is carefully designed to cope with these. Our global standards require at least two independent barriers. Barriers can include cement, casing, and additional plugs. Sensors down the well convey real-time information about pressure and temperature back to an operations centre so that any potentially dangerous fluctuations can be picked up immediately, and the pressure adjusted or the pumps shut off. At this point the well can be shut down, with a heavy column of mud pumped down the well to overcome the pressure, “killing’’ the well. Strongly cemented casing in the well provides enough support to resist the sudden pressures. Shell has developed comprehensive plans to deal with storm or hazardous ice conditions that might force a shut-down of operations. These plans are supported by continuous weather and ice surveillance and forecasting using sophisticated computer modelling, radar and satellite imagery. Shell employs observers on board our vessels who monitor ice conditions that could affect drilling operations. If for any reason these measures of early detection should fail, mechanical barriers such as a blowout preventer is designed to seal off the well. This is a series of valves that can be closed in sequence, providing back-up in case one device should fail. Blowout preventers are designed and tested to withstand the maximum expected pressure. They activate automatically in the event of a power failure on a drilling platform. If, despite all precautions, a blowout does occur, a relief well can be drilled to intersect with the original well and pump in cement or drilling fluid, cutting off the oil flow. Before any exploration or production operations the drilling plan has to be approved by regulators. Before giving approval, they conduct stringent reviews of the relief well plan. 3 Responding to spills Shell has built an industry-leading capability in preventing spills and in our readiness to respond to any that occur. We regularly test our plans and preparedness, and take part in large-scale joint exercises with other industry partners, government agencies, scientists and oil spill experts. We are constantly prepared to mobilise people and equipment around the world and we continuously fund and conduct research and development in the areas of oil spill response. The effectiveness of options to response to spills under Arctic conditions has been widely tested. These tests include trials held over three years by the Joint Industry Program (JIP) on Oil Spill Contingency for Arctic and Ice Covered Waters. Oil in the sea Natural seeps occur when crude oil leaks from beneath the sea floor into the water. They form the largest single source of petroleum in the marine environment, accounting for 45% of all oil in the world’s oceans. Seeps have existed for millions of years and are part of the ecosystem in many areas. There are natural seeps off the coast of West Greenland, off California, in the northern Mediterranean Sea, in the Caspian Sea and in the Gulf of Mexico. These areas normally have a thriving marine ecosystem, despite the natural seep of a significant amount of oil into the water. Bacteria naturally present in the seawater feed off this oil and effectively biodegrade it. Mechanical containment and recovery If a spill does occur, the rapid containment and recovery of oil at or near the source is the first goal. Mechanical skimmers can be used to remove oil from the water surface and transfer it to a storage vessel. Skimmers work most efficiently on thick oil slicks: floating barriers, known as oil booms, are used to collect and contain spilled oil into a thicker layer. A variety of designs for skimmer and booms have been adapted for Arctic sea conditions and several have been proven to work well. Controlled in situ burning Oil on water or between layers of ice can also be tackled quickly, efficiently and safely by controlled burning. This technique works most efficiently on thick oil layers, so the oil needs to be contained by fire-resistant booms, ice or by a shoreline. On average, about 80-95% of the oil is eliminated as gas, 1-10% as soot and 1-10% remains as a residue. Following the burning, this residue can be recovered from the water surface. Controlled burning is a proven response developed over several decades by the oil industry, emergency response authorities and scientists. This involved extensive laboratory and tank testing, large-scale field experiments and lessons from real incidents. Burns can eliminate 1,000 barrels of oil per hour. Through tests over several decades, in situ burning has been proven to work well in the Arctic. Dispersants Chemical dispersants are another method of cleaning up spills. They have proven highly effective in the Arctic through extensive testing. Dispersants are like detergents designed Testing how to apply chemical dispersants directly from vessel. for use in marine environments. They accelerate the breakup of oil slicks into fine droplets that can then disperse and biodegrade more easily in the sea. The use of dispersants offshore is generally recognised as an efficient way of rapidly treating large areas of spilled oil to reduce the impact on marine life and the environment. They can be applied from fixed-wing aircraft, helicopters, and vessels. Capping and Containment dome Shell is commissioning the building of a subsea containment system that involves capturing and recovering hydrocarbons at source in the unlikely event of a well control incident in the shallow waters off Alaska. This recovery method has proved effective in shallow water, and is expected to be ready for the 2012 Alaska drilling season. The containment system is designed to capture and recover oil and gas from an undersea well in the event of failure by the blowout preventer. The recovered oil would be transferred to a surface processing facility for separation of oil, gas, and water. Recovery in Arctic conditions Shell has always recognised that a spill in the Arctic would pose special challenges. But the low temperatures would also present opportunities to help contain spilled oil, slow its spread and provide vital time to respond with a variety of methods. When exposed to low air and water temperatures, oil tends to thicken, resulting in slower spreading and a reduced spill area. Cold water and ice can aid oil spill response operations by slowing oil weathering (the time it takes oil to emulsify) and reducing the action of waves to limit the spread of oil. Evaporation also slows down in cold temperatures and ice, allowing oil to retain its lighter and more volatile components longer and making it easier to burn off. When ice is too concentrated in an area for the use of a boom to contain the spill, it can act as a natural barrier that helps collect oil for recovery with skimmers. In the coldest temperatures, oil released under ice may become trapped within newly-forming ice. This oil is then effectively isolated from any direct contact with marine life or birds, and from natural processes such as evaporation and dispersion. The fresh condition of the oil, when later exposed, increases the chances of successful burning. * The pictures with oil in ice are from the SINTEF joint industry project. 4 The oil spill response vessel, Nanuq (pictured left). Above: crew members onboard Nanuq, Alaska. In short Our track record: Oil and gas operations are designed to contain oil and gas in wells and production facilities and prevent oil spills to the environment. In our efforts to help meet growing global energy demand, Arctic resources are expected to play an important role. We recognise that one of the most serious concerns among communities affected by potential Arctic development is whether the industry has the capability to manage a potential oil spill. Shell has a good record of spill prevention in the Arctic and subarctic. Our experience from operations in these regions helps us to work in extreme and unpredictable weather and ice conditions far from populated centres and support facilities. Should a spill occur, Shell has a comprehensive range of techniques and expertise in place to respond and mitigate its effect in a variety of operating conditions. Independent international research by SINTEF has shown that there are efficient methods in place to manage Arctic spills and spills in ice-covered waters. But we know we can always learn more. Shell and the industry continue to invest in research to improve equipment and operational readiness and are applying the lessons learned elsewhere to further improve oil spill response and prevention capabilities in the Arctic. The Sakhalin 2 project, where Shell is a partner in the operating company Sakhalin Energy Investment Company Ltd, provides more evidence of our responsible approach. This is one of the world’s largest integrated oil and gas projects and is situated in Russia’s far east, where Arctic-like conditions exist and the sea is covered by ice much of the year. Sakhalin 2 is a project with an excellent record of preventing spills. Since oil production started there in 1999, the total volume of oil spilled at Sakhalin Energy-operated assets is around 670 litres over a period that saw total production of around 100 million barrels (12.77 million tonnes) of oil. This represents around one litre of oil spilled for every 22 million litres produced. An example of this collaborative approach is the Joint Industry Project (JIP) through The Oil and Gas Producers (OGP) to advance year-round Arctic spill response capability. Shell is leading this project, a collaboration of oil spill response experts from nine major oil companies. The project will look at the evaluation of environmental impacts of oil spills, the fate of dispersed oil under broken ice field and improved oil detection in Arctic waters, especially in broken ice and at low visibility. The project will also study the mechanical response to large spills in broken ice and under ice, ignition techniques for in situ burning, and advanced modelling that predicts the flow of oil in different ice concentrations. Our work in Alaska spans nearly 50 years and includes safely drilling in the Beaufort and Chukchi seas. This publication is one of a series of briefing notes on challenges related to oil and gas development in the Arctic. The series includes Shell in the Arctic, Arctic Biodiversity, Working with Indigenous People, Technology in the Arctic, Preventing and Responding to Oil Spills, Climate Change and Developing Arctic Oil and Gas. Disclaimer Royal Dutch Shell plc and the companies in which it directly or indirectly owns investments are separate and distinct entities. The collective expression ‘Shell’ and ‘Shell Group’ may be used for convenience where reference is made in general to those companies. Likewise, the words ‘we’, ‘us’, ‘our’ and ‘ourselves’ may be used to refer to the companies of the Shell Group in general. These expressions may also be used where no useful purpose is served by identifying any particular company or companies. Correspondence address Royal Dutch Shell plc Carel van Bylandtlaan 30, 2596 HR The Hague, The Netherlands www.shell.com Design by Creative Services, The Hague Printed by Charterhouse under ISO 14001 April 2011 Published by Royal Dutch Shell plc, for Shell Exploration and Production International B.V., The Netherlands. All rights reserved. XXX-XXX-XXXXX