Shell Oil Rig Aground In Alaska Was Moved To Avoid Taxes

Shell Oil rig runs aground; photograph courtesy of Jonathan Klingenberg, U.S. Coast Guard@   @ National Geographic

Shell Oil rig runs aground; photograph courtesy of Jonathan Klingenberg, U.S. Coast [email protected] @ National Geographic

In an interesting development regarding the oil drilling rig that ran aground southeast of Alaska, Shell has admitted that the rig was being moved for repairs but the timetable was set to avoid an Alaskan state tax. The Independenta UK publication, reports:

Shell admitted today that its decision to move the rig, the Kulluk, just weeks after it was brought to the Gulf of Alaska in November, was motivated by financial considerations.

“It’s fair to say that the current tax structure related to vessels of the type influenced the timing of our departure. It would have cost Shell multiple millions to keep the rigs here,” a Shell spokesman said.

Another Shell spokesman, in London, said: “While we are aware of the tax environment wherever we operate, the driver for operational decisions is always governed by safety. In this case, what mattered most to Shell was the two-week window of favourable weather that was forecasted for that journey.”

They have managed to land salvage experts on board the rig, and there is no danger right now of leakage from the fuel tanks, hydraulic fluid or lubricants on board. However, they aren’t quite sure how to refloat and move the rig yet, and complications could arise.

Unfortunately for the oil giant, they will have to pay the Alaskan tax, which will total around $7 million. In addition to the tax, they are being sanctioned and fined for the emergency response that was required with the rig ran aground, which is estimated to be in the millions.

It seems, though, that incidents like this might just be the cost of trying to drill in the Arctic. Experts have warned again and again that the technology isn’t there yet, and might not be for quite some time — and hopefully by then we’ll have managed to get around the lobbyists and started using a better, and alternative, source of energy than oil.


Political Writer, Justin Acuff Please join me on Facebook for instant access to my articles, or visit my home site.