Unalaskans react to Shell decision to quit Arctic

  • The 380-foot ice-handling vessel Fennica is seen July 7 at Resolve Magone Marine Service getting patched up after hitting an uncharted shoal on its way out of Dutch Harbor headed for the Chukchi Sea on July 3 and was forced to return to port. Marine support service businesses benefitted from Shell’s fleet passing through, but other Unalaska residents are relieved the company called it quits on its Arctic exploration program. Photo/Jim Paulin/For the Journal

UNALASKA — No more Shell, no more oil rigs passing through Unalaska after this year, at least for a while. The local reactions were disappointment, delight and indifference, after the oil giant announced it was canceling offshore oil exploration in the Arctic Ocean for the “foreseeable future.”

Shell’s boats and rigs have been stopping over in the Aleutian Islands port as they traveled back and forth during the summer drilling seasons. Shell announced its decision Sept. 27, following disappointing results from its one drill hole, the Burger J well in the Chukchi Sea north of Barrow, more than 1,000 miles from Unalaska.

“As far as the City of Unalaska goes, Shell is just another customer here,” said Unalaska City Manager Donald Moore.

Moore said the city earned some extra money with a $6,000 monthly airport lease, plus an undetermined amount of port revenues when the oil fleet tied up at city docks.

Moore compared Shell’s impacts to the cruise ship Celebrity Millennium two weeks ago, when thousands of passengers and crew surged into town. They came, they spent money, and they left.

“We’ll just adjust accordingly,” he said.

Unalaska city officials are now calling the subarctic town an “Arctic portal,” a verbal retreat from when their angry pontifications about not being considered an “Arctic port” for federal funding purposes.

“It’s a little bit disappointing for a lot of people,” said Unalaska city council member and Unisea President Tom Enlow.

Enlow was referring to various support sector businesses that were looking forward to making a lot more money if Shell had a successful drilling season and especially landlords looking to triple their rental rates if large numbers of oil workers moved to town, squeezing an already tight housing market. On the other hand, it’s a relief to tenants who worried about not have any place to live, if rents shot sky high, he noted.

“It’s kind of a mixed bag,” Enlow said, with some hoping for big money, while others feared Big Oil’s impact on the “character of the community.”

At the Grand Aleutian Hotel, owned by Unisea, Shell rented a block of about 40 hotel rooms long-term, so they’d be available whenever needed. But if they weren’t needed, the company allowed them to be rented to other customers, he said.

One local environmentalist saw divine intervention.

“It pays to pray,” said Rufina Shaishnikoff, who said she prayed for “protection of the ocean and all that live in it.”

“There’s plenty of oil in other places. We don’t need to be messing up there,” in the Arctic, she said. As for the local economy, it’s doing well because of the fishing industry, she said. And the oil will still be there 20 years from now, when improved technology could allow safer drilling, she said.

Another resident thought the aborted drilling plans had more to do with money, saying that a return to $100 per barrel oil prices would bring Shell back in a hurry. Shell also blamed the regulatory climate, which Enlow described as “unfriendly.” The oil company had its own problems, too, keeping its rigs away from beaches. The rig Kulluk ran aground near Kodiak, while transiting from Unalaska to Seattle in 2012.

The Noble Discover drifted perilously close to shore near the Dutch Harbor Post Office earlier that year. The support vessel Fennica hit something underwater this summer in Unalaska Bay, gashing its hull.

At one major local Shell subcontractor, Offshore Systems Inc., company spokesman Jim Butler, in Kenai, was circumspect about the surprising announcement from Shell, and said he was taking a wait and see approach.

“My reaction was, this is early information, and we’ll probably learn more in the next days or weeks,” Butler said. “It’s premature to come up with a concrete impression.”

Shell vessels were busy at OSI docks throughout the summer, and more activity is expected soon as the oil fleet demobilizes up north, and passes through Unalaska, according to Butler.

He emphasized that Shell is but one customer of OSI, which also services the fishing and marine logistics industry. For instance, OSI services Trident Seafoods’ factory trawlers at its busy site on Captains Bay Road where forklifts are nearly as common as eagles and ravens.

“OSI has always been a longterm player,” accustomed to the ups and downs of the industries it serves, Butler said.  As for plans to expand to Adak, Butler said that hasn’t happened yet, but that OSI continues to explore the possibility with The Aleut Corp., which owns much of the island and its former military base about 400 miles west of Unalaska.

At a recent city council meeting, Moore said the demobilization will be a little different than the northbound mobilization in early summer, because the southboand boats and rigs won’t surge into town in a short period, but will travel through more gradually.

11/24/2016 - 12:54pm