By Naomi Klouda
The jackup rig Endeavour isn’t leaving anytime soon and given safety concerns, the Homer dock where it’s moored may be the safest place for the 410-foot giant.
That information came from Homer City Manager Walt Wrede, who has negotiated the dock lease with Buccaneer Alaska these past nine weeks, in remarks during a panel discussion called by Cook Inletkeeper Thursday night at Islands and Ocean Visitor Center.
Inletkeeper Advocate Bob Shavelson organized a showing of a 1970s film, “Alaska: Technology and Time,” to set a historical context for the discussion on oil and gas development in Kachemak Bay.
Retired commercial fishery manager for Fish and Game, Loren Flagg, was in the film and also took part on the panel, along with Shavelson, with moderator Michael O’Meara.
Wrede was asked when is the Endeavour leaving?
“That’s the million dollar question. They aren’t leaving. It turned out they had a lot of work to do,” Wrede told the packed crowd. “In Singapore, it was outfitted for north sea drilling work for more than a year prior to heading to Homer in August.
“Nobody was inspecting it. Work wasn’t done. By the time it got here, it still needed welding and safety stuff, and equipment installed. The Coast Guard likely wouldn’t let them leave right now even if they wanted to.”
Buccaneer initially contacted the City of Homer Port and Harbor to lease dock space for an 8-day stay in late August, Wrede said. Another extension was requested before the eight days were up. Now the oil and gas concern based in Houston has asked for yet another extension.
“They’re telling us mid-November now,” Wrede said. “From the city’s perspective, it’s a lot of symbolism and you don’t like to look at it, but it may be the safest place to be. If the Coast Guard says it’s not safe for them to go to the drilling site, that dock may be the safest place for it.”
Sight of Endeavour jack up rig moored to the Homer Deep Water Dock might strike as unheard of, but the truth is that oil and gas development in Kachemak Bay goes back to a time in 1973 when the state issued 87 leases on the outer continental shelf and Richfield Oil began drilling in the waters off St. Augustine.
A crowd of about 100 people turned out at Islands and Ocean Visitor Center to see the film, “Technology and Time,” by Rick Wise. In introducing the film and discussion, Shavelson said it’s important to provide an historical context to what residents are seeing now in terms of jack up rigs parked in Kachemak Bay.
“We have a jack up rig in our front yard, an active drilling project in our back yard and our, as it were, side yard (out East End Road) has a proposed drilling project,” Shavelson said. “Our yard is getting rather cluttered. We felt it important to provide an historical context, because if we don’t know where we’ve been we won’t understand where we’re going.”
The film depicts the dynamics of a time in the 1970s when the oil industry pushed into the area on the heels of a large federal leasing program. The movie was distributed on the public broadcasting networks at the time and was seen by 200 million people, Shavelson said. It played a major role in informing the country about the environmental threats of drilling to a fragile ecosystem and preceded a massive effort all the way to the Alaska Legislature to force federal buy-back of the 87 oil leases.
The film featured locals, such as Mike McBride, owner of a wilderness lodge across the bay, as a young man enthusiastically describing life in the inner tidal zones. It featured Homer commercial fisheries management biologist Loren Flagg, who was in the front lines on oil and gas issues at the time and gave eloquent descriptions of climate and ocean current gyres that would make any spill catastrophic on rich fisheries. He is author of “Fish, Oil, & Follies.”
In the film, Atlantic Richfield and Standard Oil mangers talk about the need for energy development and jobs in America at the time. One is filmed at a meeting surrounded by Homer residents in which he explains the “best in technology,” is going to be used. Another claims “no one has more interest in us doing it right than we do. We have invested millions of dollars in our technology. No one has more to lose than we do.”
A drilling rig operating in the shadow of St. Augustine, visible from Homer and Nanwalek, was a daily and vexatious reminder to residents interviewed. They voiced deep concern their waters were in danger of being fouled.
After the film, Shavelson commented that oil executives give the same arguments today, asking residents to trust their latest in technology to prevent spills. But that didn’t stop several oil spills, pollution and mishaps during the tipping over and sinking of the George Ferris jack up rig in the 1970s. Loren Flagg tells the complete story in his book, and gave a summary at the panel discussion.
When 87 leases were sold in late 1973 by the U.S. Interior, it was without a public hearing and with no notice, Flagg said. “Corporate oil companies came to town and put on their dog and pony shows. Standard Oil said over and over that they would provide the best in technology. At the time, the Ferris was stuck off Cape Kasilof and they had used dynamite to blow the legs off to get it unstuck.”
The tug they used to pull it free from deep muds had an oil spill.
“Before the Ferris was moved to Homer, Standard Oil had promised to tell fishermen, because of all the crab pots in the inlet. They didn’t tell anyone. They went through in the middle of the night and dragged up the pots. Picture crab pots hanging off the rig.”
When they set the Ferris’ legs down in Mud Bay, the legs were eventually stuck 82 feet into the mud. “They said, ‘no problem, we’ll get it out’,” Flagg said.
“The following year the rumors were that they were stuck and they denied rumors until time came to raise the legs.”
Another oil spill occurred when an incoming tide tipped the Ferris over as they were trying to lift it up.
“All of their containment equipment was on the (rig) barge. They didn’t think of having it on a boat nearby. They brought in a boom, and it was filled with oil. They brought in a second boom, and it didn’t work,” Flagg said.
Horrified Homer brought concerns to the Legislature, to newspapers and first Gov. Bill Egan, then Gov. Jay Hammond.
The result was a unanimous vote in the Alaska Senate and a majority voted in the House for the buy back of the leases. This shut down oil and gas development in the bay.
In the wake of these events, the Kachemak Bay Critical Habitat Area was created, and Kachemak State Park. The CHA Plan mandated that no jack up rigs were allowed to be parked in the bay again.
At that time, the bay was so rich in crab that at 10,000 pound quota could be filled in 15 minutes, Flagg said.
Not enough revenue for the headache
City Manager Wrede said the past weeks have posed a real balancing act for the city.
“A lot of things are involved here. It’s a trying time. It has caught us quite by surprise that they are here longer than we anticipated. We thought eight days, and they would stay in barge configuration. Now they are pushing two months and we don’t know how far it will go,” Wrede said.
Wrede was asked if the city is getting paid on time by Buccanneer, and so far, how much? Reports are circulating that Buccaneer has been slow to pay contractors and wages in its Kenai Loop drilling project.
Buccaneer paid its first month moorage fees, at nearly $900 per day, and will be due for this month’s fees soon, Wrede responded. The dock has sustained damage that will have to be paid for from Buccaneer, he said.
The total paid so far to the city is $45,000, including moorage for the three tugs that hold Endeavour moored.
“It’s not enough considering all the effort and stress and staff time. They are drawing 16 feet of water, and a top sail (legs in up position) that makes it really unstable. We’re told it shouldn’t be at the dock if the wind exceeds 30 mph.”
With the legs down, it can withstand higher winds, according to engineers consulted by Buccaneer.
As for whether or not it is legal for the Endeavour’s legs to be down at the dock, given the bay’s CHA status, Wrede said his understanding is that municipal tide lands are not part of critical habitat, but “there’s an active legal debate going on about that right now.”
Ask the rig to leave
Wrede was asked why doesn’t the City of Homer evict the vessel from the dock on the basis of the danger it presents in a storm. A 30-mph-wind is a breeze on the Homer Spit in winter compared to the huge gusts up to 100 more often seen.
A city or port doesn’t have the ability to deny vessels entry in the bay or port under Federal Maritime Law, Wrede said.
“The Port of Homer is a marine terminal governed by the Maritime Commission. It is registered under the Maritime Commission and the 1984 Shipping Act. We have to be very, very careful about not saying who comes to the dock and who doesn’t. Commercial vessels have to have access to it. From our perspective it was a barge (once it was offloaded from its shipping vessel.) We can’t say, ‘You can’t tie up here because we don’t like who you are,’” Wrede said. “I’ve been saying, we better pray every night that those legs don’t get stuck.”
Someone suggested requesting Buccaneer to hire engineers to advise on what to do if the legs get stuck.
More to come
One Homer resident said it’s up to residents to demand to know how many companies hold leases in this area and all the players. Buccaneer has nine leases off East End Road in the West Eagle Unit.
“It takes your breath away when someone comes to your door and says we’re going to start up operations,” she said.
Shavelson explained that oil and gas development is driven by the system in Alaska that ensures its development. Most all of it is on state land and state waters. Each year, the state’s Department of Natural Resources Division of Oil and Gas offers 4.2 million acres of lands and waters for lease.
“When leases are announced, companies come and submit their development plans. As an article in Petroleum News pointed out, the Cook Inlet leases are almost free. These resources are almost literally given a way, with tax incentives of $25, $22 and $20 million to the first three companies that drill into peak formations,” Shavelson said. “The state is inducing this development and there’s a lot of complexity to it.”
Shavelson was asked about the worst case scenario for development in this region.
“My greatest concern is a blow out occurring. The best in technology often doesn’t work,” Shavelson said. “My concern is that they don’t have another drill on contract to drill a second well in case of a blowout. Industry will always tell you they can do other things. Your worst case scenario is a blow out and they don’t have the rig nearby.”
Through the years, about six blowouts have occurred in Cook Inlet, Shavelson said.
He also doubts Buccaneer’s financial resources are large enough. If it’s true the company is behind in paying bills up north, does it have enough money to do a good job and not pollute this place? The state investment agency, Alaska Industrial Export and Development Authority, has invested about $25 million.
“AIDEA has a big investment in the rig. But don’t expect them to have a great deal of money to draw on if something goes wrong,” Shavelson said.
Flagg noted that when residents aired these issues 40 years ago, the Alaska Fish and Game area managers had more power because they could argue science in oil development matters and would be listened to.
“It’s totally different now than in the ‘70s and ‘80s. There’s been a major change. It used to be area biologists made all the management decisions. Before George Ferris, biologists said Kachemak Bay should be withdrawn from the lease sale. We made recommendation and it was not taken. They forged ahead with the lease sale anyway. But we had the full support of the department behind us. (Gov.) Egan was pro oil. Things changed under (Gov.) Hammond, and that ultimately was what turned the tide, along with the mistakes industry made.”
Buccaneer offers Homer public meetings
Buccaneer Alaska is calling two public meetings next week, Wednesday and Thursday evening, to impart information on their gas drilling plans on a lease off East End Road and in Cook Inlet.
The first meeting will be at 6-7:30 p.m. Wednesday at the Bidarka Inn. The second meeting will be 6-8 p.m. Thursday at the McNeil Canyon School Gym.
The meetings are to communicate with the citizens of Homer and engage in an open dialogue on both current and future operations, “Buccaneer Alaska would like to invite all members of the community to attend one of the two initial outreach meetings. Buccaneer considers itself to be a corporate citizen of the state of Alaska and a member of the local community, and as such would like to make sure the community is well informed about our up coming projects,” said JMR Worldwide public affairs person Jay Morakis in a press release distributed this morning.
The projects to be discussed are the Cosmopolitan and West Eagle units. Cosmopolitan is located offshore on the east side of lower Cook Inlet, north of Anchor Point.
The West Eagle No. 1 well is located about 20 miles east of Homer, and about 5 miles from the north shore of Kachemak Bay. It is located near the top of a hill at an elevation of about 1,910 feet. The site is also located within the footprint of an existing gravel pit on public lands and operated by a local company.
Mark Landt, Vice President at Buccaneer Alaska will deliver a presentation on operations, and following will take questions from those who attend. Refreshments will be served and informational materials will be available as handouts.
All citizens are both welcome and encouraged to attend either event. For more information please contact Christina Anderson, Buccaneer’s Alaskan Representative at: 1.855.865.2298.
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