Shell to move rig despite conflict with City of Seattle

Photo/Elaine Thompson/AP

Message from Foss Maritime Corp. and Shell to Seattle Mayor Ed Murray: Shove it.

At the urging of environmental groups, Murray is attempting to block Shell and its support contractor, Foss Maritime, from using the Port of Seattle.

Murray told the port May 4 it must obtain a special permit from the city to allow the semi-submersible Polar Pioneer, which has been hired by Shell, to be docked at Terminal 5 at the port.

Foss Maritime Corp., which holds a lease on the terminal and has a contract with Shell to service the rigs, disagrees with the city’s interpretation of its land-use regulations and said Foss has a valid contract with the port to use the dock. Foss plans to fulfill its contract with Shell, the company said.

Shell spokesman Curtis Smith said May 12 that, “our shared view (with Foss) that Shell’s lease and the supporting contract with Foss is valid, we have made the decision to utilize Terminal 5 under the terms originally agreed upon by the parties involve, including the Port of Seattle. Rig movement will commence in the days to come.”

The port owns the land and terminal at issue and the city’s only legal tie is a land-use permit issued in 1994. Murray is now arguing that the permit allows Terminal 5 to only be used as a “cargo” port.

Terminal 5 is a large multiuse dock that has been used for years by container ships, and light maintenance similar to any work planned for the drillships was frequently performed on container ships, Foss Maritime spokesperson Paul Query said.

Foss is appealing the mayor’s decision to a city hearing panel and the port will join the appeal, the port’s commission decided May 12. The commission also asked Foss and Shell to delay moving the semi-submersible to the terminal until the legal issues are resolved, a sop to environmentalists who packed a public hearing held May 12, but the companies will not delay, they said later.

“We understand the Port Commission’s request for more time but given the short windows in which we have to work in the Arctic,” the work on the Polar Pioneer must proceed, Smith said.

“Foss intends to provide its customer the services for which it has contracted over the next few weeks as it prepares for the summer oil exploration season,” Foss said in its appeal letter to the city’s decision. “The city’s position is not supported by the plain language in the permit at issue.

Foss President Paul Stevens said the port commission knew full well what activities would be occurring at the terminal when it granted the lease.

“We’re going to proceed,” he said.

Just what the city can do about it is unclear, although a notice of violation issued to the port is expected.

“Under normal circumstances the city would not issue a violation to Foss or the Port of Seattle unless it prevailed in the hearing,” Foss said in a statement.

The Polar Pioneer was meanwhile anchored in Port Angeles, a nearby Puget Sound port, until Foss moves it to Terminal 5 soon for the needed work. The Noble Discoverer, another Shell drilling vessel, was expected to be in Everett, Wash., another nearby port, by midweek.

The Seattle affair is another political dustup for Shell as it prepares for its Arctic drilling. The company said it has other options but that it prefers to use the Port of Seattle because Terminal 5 is available along with the skilled labor needed.

The matter has raised serious concerns in the maritime and Alaska business communities, however.

 “If the Port of Seattle does not uphold a legally-binding contract with Foss Maritime, the negative consequences will be far-reaching, expensive and ruinous to the port and the region,” said Richard Berkowitz, Pacific director for the Transportation Institute, a maritime trade group.

Berkowitz called the mayor’s action, “a political stunt promoted by fringe elements of our community who will never be appeased by rational decision-making.”

Alaska Chamber President Rachael Petro echoed Berkowitz.

“Should the City of Seattle’s effort to derail Foss Maritime’s Terminal 5 lease be successful, it will set a dangerous precedent. It will send a clear message that Seattle is closed to business by creating uncertainty,” Petro said in a statement.

“It will signal to maritime companies involved with industries like tourism, seafood, retail import and export that their lease contract with the port could be derailed at the last minute should anti-business interests or elected officials decide to do so.”

It its statement, Foss warned that the city’s interpretation of the Terminal 5 permit could have wider effects.

“Under the city’s initial interpretation, Alaska fishing trawlers would not be allowed to winter over at the cruise ship docks at Terminal 90 and 91; the Seattle Fire Department’s fire boats would not dock at terminals 90 and 91 as they are now doing; and vessels of the U.S. Navy and other navies that visit during Seafair would not be allowed to tie up at port facilities.

“Maritime businesses from Ballard to South Park (in Seattle) are doubtless nervously checking their permits and wondering if the mayor will deem them worthy.”

Environmental groups showed up in force at the port commission hearing including a group of grandmothers who had composed a song against Shell, which they sang for the commission.

One young women was in tears, describing how Shell’s drilling would raise global warming by two degrees, destroy the ocean plankton on which all life depends, she said, and lead to the end of civilization.

Mothers with young children in tow displayed hand-drawn signs saying “Stop Shell!” which they said the children designed.

However, plenty of supporters for Foss and Shell showed up at the commission’s hearing including substantial numbers from the regional maritime industry, organized labor and from Alaska including the state’s Arctic communities.

Anthony Edwardsen, president of UIC, Barrow’s village corporation, said his company has done business with the Port of Seattle for years through its barge company, Bowhead Transportation.

“We’ve operated since 1985 shipping fuel and freight to our northern communities and we depend on the Port of Seattle. We’re asking the port to abide by its lease with Foss,” Edwardsen said.

“This action (attempting to deny access) is an attempt by environmental groups to hold our communities hostage.”

John Hopson, Jr., Mayor of Wainwright, Alaska and a North Slope Borough assemblyman, told the commission he had left spring whaling camp to fly to Seattle to testify to the port commission.

“We came off the ice (from camp) to speak to you and it is a huge imposition at a critical time of year,” Hopson said.

He urged the commission not to be swayed by environmental groups. Economic development is important to the Arctic to build infrastructure that is badly needed.

“The Arctic is just not a place for polar bears. We live there,” he told the commission.

Two Alaska state officials, state Sen. Cathy Giessel, R-Anchorage, and state Commissioner of Commerce and Economic Development Chris Hladick, reminded the commission of the long shared history between Alaska and Seattle.

Giessel reminded the commission that the Alaska and Klondike gold rushes helped the city grow to dominate the U.S. Pacific Northwest and that Seattle played a vital role in Trans-Alaska Pipeline System construction in the 1970s.

She urged the commission not to buy the message that the Arctic is “some sacred place.”

People live there, she said.

Hladick, who is a former mayor of Unalaska, a major fisheries port with extensive links to Seattle, said he was shocked that the termination of Foss’ lease would even be considered.

“If this happened it would hugely damage the reputation of the port. After a century of economic partnership, we ask you to honor that lease,” Hladick said.

Glenn Reed, president of the Pacific Seafood Processors Association, said his member companies use Port of Seattle facilities to winter over and do maintenance on large fishing vessels. The fisheries community is often also targeted by environmental groups and Reed said there is concern that environmental activists could attempt to pressure the port over its support for fisheries.

11/21/2016 - 10:00pm