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The Globe and Mail

Stricken rig finds safe harbour in sheltered Alaskan bay

The conical drilling unit Kulluk sits grounded about 65 kilometres southwest of Kodiak City, Alaska in this U.S. Coast Guard handout photo taken Jan. 3, 2012.


People are scarce in Alaska's remote Kiliuda Bay, but bears, puffins and whales are regular sights against the stark mountain backdrop.

Now there's a new addition to the panorama – a hulking, Arctic-class drilling rig. Kiliuda Bay has become the port of refuge for Royal Dutch Shell PLC's damaged offshore rig – the Kulluk – which was grounded in frigid Gulf of Alaska waters one week ago.

The drilling unit, carrying about 143,000 gallons of diesel as well as other petroleum products, was being towed to Seattle for maintenance work on Dec. 31, when severe weather, 12-metre waves and tugboat engine failures halted the voyage.

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Late Sunday, with favourable high tides at the grounding location near Sikalidak Island, the Kulluk rig was refloated. On Monday, it was towed 48 kilometres to Kiliuda Bay. Now anchored in the bay's sheltered waters, the vessel will be fully inspected to see whether repairs can be completed on site, or whether the rig needs to be moved again.

Although officials say there's no sign of a breached hull or leaked fuel, the incident has highlighted the risks of increasing oil and gas development off frigid Pacific coastlines.

"This could ruin me if some mishap happened," said outfitter Larry Carroll, 52, the co-owner of Kodiak Adventures Lodge, where every room looks onto the waters of Kiliuda Bay.

Mr. Carroll said he and his family are the only permanent residents of the bay, a far-flung region on the east side of Kodiak Island – an island, which, in 1989 had its fisheries hurt by the devastating Exxon Valdez spill. Mr. Carroll has carefully monitored news on the Kulluk and is concerned about environmental effects, but he's pleased there haven't been any leaks and hopes the rig will be moved out of sight in short order.

"It's a complicated problem. Let's face it – we all use fuel," he said of oil drilling and transport in the waters where sport fishermen pay him $600-$750 (U.S.) a day to reel in wild halibut and salmon.

"Nobody wants anything in their backyard but yet, the fact of the matter is, they have to get fuel from somewhere. And that comes with inherent problems."

On Monday, officials from Shell, the Alaska Department of Environmental Conservation, the U.S. Coast Guard and the local government said the Kulluk move went off without a hitch.

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"This is a major milestone in the recovery operation. But know that we still have a lot of work to do," said Captain Paul Mehler, the federal on-scene co-ordinator for the response effort.

"We will begin a shoreline assessment and cleanup to ensure this response leaves no footprint on Alaska's environment."

Sean Churchfield, incident commander and operations manager for Shell Alaska, said it's unclear how long the rig will be anchored in Kiliuda Bay. He said that only when a full damage assessment is carried out – which could see divers and remotely operated underwater vehicles deployed – will they know when the vessel can be moved again, or the future of the Kulluk.

"The actual repairs … we will have to see how suitable they are for Kiliuda Bay, both logistically and in terms of the environment we're working in," Mr. Churchfield said. "We may opt to leave the Kulluk in Kiliuda Bay while we complete the repairs, or we might have to move it again."

The Kulluk is three decades old but has undergone almost $300-million in upgrades over the past six years. It is a key part of Shell's Beaufort Sea exploration.

Despite the energy industry's insistence it can drill safely in the delicate Arctic ecosystem, some reluctance is appearing. Norway's Statoil ASA, for example, recently said it would hold off its Alaskan Arctic plans until at least 2015.

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Mr. Carroll said he is willing to give the industry the benefit of the doubt, and understands why the rig has been towed to his Kiliuda Bay. All the things that make the area special – the dearth of people and the natural protection from stormy seas – also make it an ideal temporary holding place for the Kulluk.

"I've become the sacrificial lamb, because where else do they take it?"

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