Arctic Drilling Co. Pleads Guilty to Environmental Crimes

Shell Oil contractor Noble Drilling LLC pleads guilty to eight environmental felonies in Chukchi, will pay $12.2 million in fines and community service.
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The Shell Oil contractor whose ship ran aground while attempting to drill in the Chukchi Sea in 2012 has pleaded guilty to eight environmental felonies, fined $12.2 million and been put on probation for four years.

In addition the parent company of Noble Drilling LLC, which was charged in connection with incidents involving the drill ship Noble Discoverer and the drilling unit Kulluk that it was towing, must create an environmental management system for its mobile offshore drilling units, the U.S. Department of Justice announced on December 9.

“Noble Drilling (U.S.) LLC was charged in an eight-count Information with knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the U.S. Coast Guard of hazardous conditions aboard the drill ship Noble Discoverer,” the Justice Department said. “At the time of the offenses, the Noble Discoverer was operating under contract with Shell Offshore, Inc. and Shell Development, Ltd. for the purpose of drilling in the arctic in Alaska.”

The ship the Noble Discoverer was towing the Kulluk back to Seattle when the latter broke free and ran aground in stormy seas at about this time back in 2012. Reattached, it broke free for a second time. Stranded for days on remote, uninhabited Sitkalidak Island in the Gulf of Alaska, the Kulluk was then towed to Kodiak Island, where damage was assessed.

RELATED: Arctic Drilling: Shell Oil Tows Rogue Rig Kulluk That Ran Aground to Kodiak Island for Damage Assessment

Earlier that year the Noble Discoverer had itself slipped its moorings, and then a few months later had had to cancel drilling because an ice floe got too close. Somewhere in there it had to be towed for repairs as well.

RELATED: CNN Spotlights Arctic Drilling as Noble Discoverer Slips Its Moorings

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It had been subject to protests before that, with actress Lucy Lawless being arrested along with other Greenpeace members for occupying the ship before it set sail.

RELATED: Lucy Lawless Occupies Arctic-bound Drilling Ship in New Zealand Port

During all this, according to the Justice Department, a host of crimes of omission, recordkeeping and wastewater management were committed during the course of these mishaps.

“Noble admits that it knowingly made false entries and failed to record its collection, transfer, storage, and disposal of oil in the Noble Discoverer’s and the Kulluk’s oil record books in 2012,” the DOJ said. “Oil record book entries falsely reflected that the Noble Discoverer’s Oil Water Separator (OWS) was used during periods of time when in fact the OWS was inoperable.”

In addition, “Noble also admits that it failed to log numerous transfers and storage of machinery space bilge water and waste oil and failed to log that the Noble Discoverer’s oil content meter audible alarm was nonfunctional,” the DOJ said. Moreover, Noble modified the Discoverer’s new oil water separator system after inspection, without informing federal authorities, and “did not receive an International Oil Pollution Prevention certificate that documented the unapproved decanting system, the increased storage, or the new OWS piping arrangement.”

The $12.2 million includes $8.2 million in fines and $4 million in community service payments, according to Noble.

Concerns related to the Noble Discoverer have been addressed during the renovation and modernization of the rig which occurred as part of an extensive shipyard program conducted in Korea and Singapore,” the company said in a December 9 statement, taking credit for some of the measures outlined in the DOJ settlement announcement. “Many of the Company's own initiatives were incorporated into an Environmental Compliance Program, which was part of the settlement agreement reached with the Department of Justice today.”

Shell and three other major oil companies recently scotched drilling plans in the Beaufort and Chukchi seas, partly due to unpredictable weather and mishaps, and partly because of falling oil prices that make it not worth the investment.

RELATED: Oil Giant Chevron Cancels Plans to Drill in Beaufort Sea in Canadian Arctic