Deep trouble

With the BP Deepwater disaster in the Gulf of Mexico still fresh in the public consciousness, it might have been anticipated that a crisis on this scale would have prompted an unprecedented PR exercise, with the Government, regulators and oil company giving hourly updates on the efforts being made to close the valves and limit environmental damage.

Yet for almost a week the truth of what was happening at the Gannet Alpha rig, 112 miles off the coast of Aberdeen was as murky as the North Sea waters, with Shell acting as slippery as the black stuff spewing from its well’s ageing infrastructure.

News of the spill, which was discovered when a routine helicopter flight spotted a “sheen” on the surface of the sea, only entered the public domain when it was leaked to industry journal Upstream.

And confirmation, when it finally came, only sparked further confusion, with Shell apparently unclear on the answer to key questions such as exactly how much oil had been spilled, how big an area it affected and how many separate leaks were involved.

For days the company refused to put up anyone for interview, leaving it to the Scottish Government to issue half-baked statements (it initially said 100 tonnes had spilled, when the true figure was double that) and relying on Oil and Gas UK to provide reassurance on the general safety of the industry.

“One of the big criticisms of BP was that they were not upfront right from the start [about the Deepwater disaster] and they lost their chief executive over it,” says Dr Richard Dixon, director of World Wildlife Fund Scotland. “You would think that every company would have looked at that and thought if we have a bit of a crisis the only way to cope with it is to be as honest as possible right from the start.

“But Shell didn’t admit to the spill until they were directly asked by a journalist – who knows when they would have fessed up if they hadn’t been caught. And then they hid behind Oil and Gas UK, which was pretty cowardly, when they should have been standing up and saying: ‘This is what’s happening.’ ”

In response, Shell has insisted it notified the UK Department of Energy and Climate Change within four hours of detecting the incident on Wednesday 10 August, and began briefing the press two days later, once enough information had come to light.

Shell was already reeling from a UN report earlier this month which claimed it would take Nigeria’s Ogoniland 30 years to recover from the damage caused by Shell oil spills – damage the company had underplayed for decades.

Yet, only when it was clear it was facing another PR disaster, and the Scottish government had called on the company to improve its communication skills, did it seem to make a concerted effort to make amends, apologising for its failings and finally giving a coherent account of what measures were being taken to tackle the problem.

The company then explained that oil trapped in the eight-inch flowline where the leak started and the main 2ft diameter pipeline 300ft below the surface into which it feeds was still leaking into the North Sea, but that sending divers down could lead to a sudden and catastrophic release since depressurising the line to reduce the leak had led to a degree of buoyancy, with the pipe floating 4ft above the seabed.

Late last week, rock mattresses, layers of concrete block, were lowered to help stabilise the pipe. That allowed divers to go down and close the affected valves. The operation appeared to be successful, but the pipeline will continue to be monitored closely.

Although at least one seabird has already been discovered with oil on its wings, environmental experts have more or less accepted that the spill, which is a tiny fraction of the Deepwater spill, is unlikely to have a devastating impact on wildlife.

But, they say, the incident, which still posed the biggest threat to Scottish waters since the Braer Tanker ran aground off the Shetland Isles in 1993, raises important questions about the North Sea oil industry.

Not only are they concerned about the maintenance of ageing wells, many of which have already exceeded their 20 to 25-year lifespan, but they are concerned that a combination of rising oil prices and diminishing supplies will encourage oil companies to take more risks, leading them to drill in ever more hostile environments, including the Arctic, where ice would make clearing up after a spill much more difficult.

Despite the concerns over ageing platforms, Robert Paterson, health & safety director at Oil & Gas UK, insisted the offshore industry invests “significant funds, time and energy to ensure that its offshore installations continue to remain in good repair”.

Meanwhile a spokesman for Shell highlighted its plans to invest $600 million in assets in the North Sea region, adding that the relevant part of the Gannet Alpha line where the leak took place was last inspected in October 2010.

“Safety is Shell’s foremost priority at all times,” he added. “We continue to carry out a risk-based inspection programme on all our flowlines and pipelines.”

The spill at Gannet Alpha also throws the relationship between the oil industry and the government into the spotlight, with some critics questioning whether fears over fuel security and the importance of oil to the Scottish economy means companies like Shell have been given an easy ride.

“We have a cabinet which is fairly heavy with energy economists and people with links to the oil industry, and the oil industry creates many jobs and a great deal of revenue, so you do wonder if there’s a warmth of relationship there,” says Stan Blackley, chief executive of Friends of the Earth Scotland. “Yet the Scottish Government should have been all over this latest spill like a rash because, in the end, if significant damage is done by these companies, it is the Scottish economy, the Scottish people and the Scottish environment that suffers.”

Ever since rules were tightened up in the wake of the Piper Alpha disaster which claimed 167 lives in 1988, the UK’s regulatory system has been regarded as the gold standard worldwide.

Certainly that was the argument used by oil companies in the wake of Deepwater to reassure the public about the safety of their North Sea operations.

And yet, over the past few years there has been a succession of reports which suggest all is not well on the rigs which have been drilling in the waters off the coast of Scotland since the boom began in the mid-70s. Last year, the Health and Safety Executive agreed to step up its inspection programme after admitting that 96 per cent of North Sea installations inspected during the previous three years had been found to need improvements, with 20 per cent showing “major failings”.

HSE documents, obtained under the Freedom of Information Act, also showed more than 100 potentially lethal and largely unpublicised oil and gas spills had taken place in the North Sea in 2009 and 2010.

Shell was one of the two worst offenders. There were 10 incidents in the Gannet field alone, one of which was classed as “significant”. The company has also had problems in its Brent field, one of the first major oil fields explored in the North Sea, which recently benefited from a £1.3bn upgrade. In July, Shell stopped production at its C platform after being served with a prohibition notice because of a release of gas.

Glen Cayley, technical director for the company’s exploration and production activities in Europe, has already admitted that if the inspection and maintenance procedure had been “flawless”, the leak at Gannet Alpha would not have happened.

Despite these problems, oil companies, including Shell, hope to compensate for diminishing oil supplies by moving into riskier areas such as the west coast of Shetland, where drilling in water 1,000ft deep is already taking place, and the Arctic.

But, if Shell is struggling to deal with a moderate sized leak in water 300ft deep, and where the technology is relatively straightforward, how would it cope in far more hostile conditions?

“Shell has more or less admitted in its own documentation that if a major spill happened in the Arctic, they would need to get a grip on it in the first couple of weeks, if they were to retain control,” says Dixon. “Because of the cold conditions and the ice, you wouldn’t be able to get boats in, you wouldn’t be able to skim the oil off in booms, you couldn’t put divers down. They would have to leave it until the following summer.”

“Any developments in these areas pose enormous risks,” adds Blackley. “Nobody in Scotland would dream of spending time in these waters unless they had to – the idea that we can plonk pieces of machinery in these waters and that they will be risk-free is just silly.”

The UK government, however, is very much behind plans to expand operations. Earlier this year the Energy and Climate Change Committee resisted calls for a moratorium on drilling off the west coast of Scotland, despite expressing doubts that equipment used to tackle oil spills could be used in such harsh conditions. In Scotland, it is claimed, First Minister Alex Salmond sends out mixed messages, insisting the country will get 100 per cent of its electricity needs from renewable sources by 2020, while boasting North Sea oil will last another 50 years, and complaining an extra UK oil tax could cost the Scotland 10,000 jobs. The environmental groups are calling for tighter regulation. But what they really want is for all energy to be focused on renewables.

“The Scottish Government wants not only to increase the amount of electricity we get from renewables but to maintain and certain amount of electricity from thermal stations – there are applications for an oil-powered plant at Cockenzie and a new coal-fired plant at Hunterston,” says Dixon “We believe that, if we worked on increasing energy efficiency, we could have 180 per cent of demand by 2030.

“This renewables revolution would allow the government not only to live up to its anti-nuclear stance, but allow them not to build new thermal stations and have us all powered by the wind, the rain and the sun.”

As Shell battles to salvage its battered reputation, calls are mounting for the company – which recorded a 77 per cent rise in profits in the second quarter of this year – to publish its recent pipeline inspection report and to face the full force of the law for any alleged failings in their maintenance and integrity procedures. Although damage so far has been limited, environmentalists point out it could have been much worse.

“If you think about the quantity of oil spilt, if it had happened off the Shetland coast, or if it had been a factory on land dumping that quantity of oil into a river, it would have been a major disaster,” says Dixon.

According to oceanographer Dr Simon Boxall, of Southampton University, the spill should serve as another wake-up call to companies who have resisted calls for tougher legislation, even in the wake of the Deepwater disaster.

But, he says, consumers also have their part to play, accepting that tighter regulation is likely to lead to higher fuel prices. There is also a school of thought which says that as long as we rely on oil for our heating and transport, we just have to resign ourselves to the fact there are likely to be accidents from time to time.

And while environmentalists fret, many other people are happy to enjoy the economic boost more drilling brings. The fortunes of Aberdeen were turned around by the oil boom of the 70s, while people in Greenland seem more worried about the activities of Greenpeace, which is attempting to scupper plans for drilling off the country’s coast, than about the activities of the oil companies which they hope will make them rich.

“Scotland needs to decide as a nation does it want revenue from the oil, does it want oil security or does it want to import it and if so, how,” says Boxall.

“As long as the country needs oil, it has to get it somehow and whether it’s transported by sea, or by road, or whether we drill in our own back yard there will be risks attached. Unfortunately that’s a fact of life at the moment.”