After investing billions of dollars and navigating a gantlet of legal and regulatory hurdles in its seven-year quest to explore for Arctic oil, Royal Dutch Shell PLC could face additional delays as it awaits the end of whale hunting season in the Beaufort Sea.
As they have for thousands of years, Alaska Natives in Kaktovik and Nuiqsut are scheduled as soon as this week to begin their fall bowhead hunt, a vital Inupiat tradition that provides tens of thousands of pounds of meat for North Slope communities.
While Shell's Kulluk drill rig this week began its two-week voyage from Alaska's Aleutian Islands to its drill site about 20 miles north of the Beaufort coast, the start of drilling may largely depend on the success of this year's hunt.
"When they come back from whaling really depends on how the hunt is going and whether or not the whalers have gotten their whales," said Eleanor Huffines, manager of the U.S. Arctic program for the Pew Environment Group, in an interview from Anchorage. "We know the start date. The end date is more flexible."
The time frame depends largely on the weather, which could delay the launch of the aluminum skiffs used in the hunts, and the whales themselves, she said.
The hunt adds to the uncertainty surrounding exploration this summer as the Hague-based company continues to seek Coast Guard certification of the Arctic Challenger -- its main oil spill response barge -- and revised permits from U.S. EPA to account for higher-than-expected emissions from its Noble Discoverer drillship in the neighboring Chukchi Sea.
While ice pack has receded and is no longer apparently a threat, drilling has already been pushed back more than a month. The company now hopes to drill one or two wells, down from a previous goal of five.
"We are still confident we can accomplish meaningful work in 2012, and that's our goal," said Curtis Smith, a spokesman for Shell.
According to its approved exploration plan in the Beaufort, Shell's vessels must leave the project area beginning Saturday and cannot return until the hunts have ended, a date to be determined by the Nuiqsut Whaling Captains' Association.
No such restriction exists in the Chukchi Sea, where Alaska Natives traditionally hunt whales in the spring.
Smith said the company will be in constant communication with the whalers and expects the Beaufort hunts to last about two weeks.
But according to Interior Department studies, the fall whaling season can range anywhere from less than two weeks to longer than a month, depending on ice and weather conditions.
For Nuiqsut, a community of more than 400 near the mouth of the Colville River, bowhead hunts have ranged from five days in 2010 to 21 days in 2006 and 27 days in 2005, according to Julie Speegle, spokeswoman for the National Oceanic and Atmospheric Administration.
During the suspension for the whale hunts, the drilling fleet will leave the Camden Bay project area and move north of latitude 71 and west of longitude 146 degrees, said John Filostrat, spokesman for the Bureau of Ocean Energy Management.
Smith said the company will not be allowed to drill or do any sound-intensive work -- such as mooring or excavation on the seafloor -- that could potentially deflect whales, which is "the No. 1 concern we and the whalers share." The company must cease all drilling by the end of October.
While protected under the Endangered Species Act, bowhead whales and other marine mammals have supplied up to two-thirds of the total edible pounds of food harvested in Kaktovik, according to BOEM. Whalers hunt bowheads in the fall in motorized aluminum skiffs in open water using harpoons.
"It's still a really traditional experience that brings the whole community together," said Huffines, noting the difficulty and danger involved. "It stops the town."
A call to the Alaska Eskimo Whaling Commission in Barrow, which manages whaling on the North Slope, was not returned in time for publication.
In a letter to NOAA in December, the group warned that without careful management, offshore drilling could disrupt subsistence hunts, interfere with the bowhead migration and potentially pollute Arctic waters.
"Our whaling captains have expressed concerns about direct impacts to the subsistence hunt resulting from deflection of bowhead whales by vessel traffic and underwater noise," the group said.
But the group also commended Shell for its involvement with the local communities and for recognizing the important role whaling captains must play if industrial development eventually occurs.
Shell's Challenger vessel remains in Bellingham, Wash., where the company is working to satisfy some 400 inspection and review items involving the design, construction and installation of safety, structural, mooring, electrical and machinery systems. When finished, it must also travel for about two weeks to reach its destination off the North Slope. The company does not expect Interior to issue drilling approval until the Challenger is in place.
Earlier this month, Shell sent two vessels to its Chukchi project area to begin prepping the site for the arrival of the Discoverer drillship.
While drilling is allowed until the end of October in the Beaufort, drilling into hydrocarbon-bearing zones in the Chukchi must cease by late September to allow adequate time to respond to potential spills before the onset of ice.
"We are in a time frame where time is short," Interior Secretary Ken Salazar said earlier this month in a conference call from Anchorage, adding that he expects a final decision to be made over the next several weeks. "I don't know when that time will be, but we don't have a lot of time."
Salazar said continued delays are the company's doing, not the result of sea ice.
"The cause for any delay here is that Shell's construction of its vessel, simply they have not been able to get it done," he said. "If they'd got it done, they may already be up there today."
The company has invested some $4.5 billion to explore a region believed to contain 26 billion barrels of oil, the nation's largest untapped deposit.
Environmentalists have vigorously opposed the plan, arguing that Shell and federal agencies lack the resources to respond to a spill and that too little is known about the Arctic marine environment.
The Natural Resources Defense Council this week issued a report warning that the oil industry has a long history of spills on the North Slope and that cleaning them up would present immense challenges. It also warns that "damage to wildlife and the ecosystem undermine Inupiat quality of living and culture."
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