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Jack-up rig revives hard feelings toward Kachemak Bay oil and gas development

Naomi KloudaHomer Tribune
Buccaneer Energy's jack-up rig Endeavour, docked in Homer, has been plagued with many problems since it's August 24 arrival. October 23, 2012
Courtesy Peter Law
Buccaneer Energy's jack-up rig Endeavour, docked in Homer, has been plagued with many problems since it's August 24 arrival. October 23, 2012
Courtesy Peter Law
Buccaneer Energy's jack-up rig Endeavour, docked in Homer, has been plagued with many problems since it's August 24 arrival. October 23, 2012
Courtesy Peter Law
Buccaneer Energy's jack-up rig Endeavour, docked in Homer, has been plagued with many problems since it's August 24 arrival. October 23, 2012
Courtesy Peter Law
Buccaneer Energy's jack-up rig Endeavour, docked in Homer, has been plagued with many problems since it's August 24 arrival. October 17, 2012
Courtesy Peter Law

HOMER -- The jack-up oil rig Endeavour -- Spirit of Independence isn’t leaving the Homer dock anytime soon, and its moor site may be the safest place for the 410-foot giant.

Homer City Manager Walt Wrede, who has negotiated the dock lease with rig owner Buccaneer Alaska these past nine weeks, was part of a panel discussion with Cook Inletkeeper's Bob Shavelson earlier this week at the Alaska Islands and Ocean Visitor Center. Also taking part in the panel were Loren Flagg, a retired Department of Fish and Game commercial fisheries biologist and Homer resident, and moderator Michael O’Meara.

Shavelson organized a showing of a 1970s film, “Alaska: Technology and Time,” to provide historical context for the current discussion about oil and gas development in Kachemak Bay.

Among questions Wrede fielded during the panel: 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 a crowd of about 100 who turned out for the panel. “In Singapore, (the rig) 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. The Coast Guard likely wouldn’t let them leave right now, even if they wanted to.”

Extended stay in Kachemak Bay

Buccaneer initially contacted Homer Port and Harbor to lease dock space for an eight-day stay in late August, Wrede said. An extension was requested before the eight days were up. Now the Houston-based energy company seeks 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.”

A jack-up oil rig moored to the Homer Deep Water Dock may seem unusual, but this isn't Kachemak Bay's first oil and gas boom. Development here stretches back to 1973; that's when 87 leases were sold in the area and Richfield Oil began drilling off Augustine Island.

Some 30 years later, another boom of sorts is under way in Kachemak Bay. And Shavelson told attendees that it's important to acknowledge what took place in the 70s and how events then correlate to the current anxieties of some residents about the Endeavour's extended stay in Homer.

“We have a jack-up rig in our front yard, an active drilling project in our back yard and our ...  side yard (out East End Road) has a proposed drilling project,” Shavelson said. “Our yard is getting rather cluttered.... If we don’t know where we’ve been, we won’t understand where we’re going.”

"Alaska: Technology and Time" depicts the dynamics of the last comparable development push by the oil industry into Kachemak Bay, a push that came on heels of the oil and gas lease sales. The film featured such locals as Mike McBride, owner of a wilderness lodge across the Kachemak Bay, and the biologist Flagg, who was a central player in Homer oil and gas issues when the film was made.

Flagg, author of "Fish, Oil, and Follies," described how climate and ocean current gyres would make any oil spill catastrophic for rich fisheries.

Energy debate déjà vu

In the film, Atlantic Richfield and Standard Oil managers talk about the need for energy development and jobs in America. At one meeting, surrounded by Homer residents, a manager says, “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 Mount Augustine, visible from Homer and Nanwalek, was a daily reminder for residents deeply concerned of pollution.

The arguments and debate sounds much the same today, Shavelson said after the film's conclusion. Oil executives again are asking Homer to trust in technology to prevent spills. But assurances didn’t stop several oil spills and mishaps 30 years ago.

Assurances didn't stop another jack-up rig, the George Ferris, from tipping over and sinking in the 1970s, said Flagg, who documented the spills in his book and offered panel attendees a summary.

When the Ferris tipped, Homer residents could do little but watch, having been sidelined during the bay's lease sale by the federal government, which offered neither public notice nor comment, Flagg said.

"Corporate oil companies came to town and put on their dog-and-pony shows. Standard Oil said over and over (it) would provide the best in technology," he said. "At the time, the Ferris (rig) was stuck off Cape Kasilof and they had used dynamite to blow the legs off to get it unstuck."

Even the tug used to free the Ferris from muds more than 80 feet deep had an oil spill.

Fishermen, promised forewarning so as to collect inlet crab pots before the rig arrived in Homer waters, were perhaps intentionally misled. Flagg recalled the Ferris coming through during the middle of the night; workers dragged up crab pots and hung them from the rig, adding, "picture crab pots hanging from the rig."

Mud Bay may even have claimed the rig's legs: Standard Oil set the Ferris down and its legs immediately sank, as deeply as 82 feet. Flagg said rig managers projected control and false confidence as long as they could. 

"The following year the rumors were that they were stuck and they denied rumors until the time came to raise (the Ferris rig's) legs," he said.

Meanwhile, as Standard Oil tried to lift the rig, an incoming tide toppled it, resulting in another oil spill.

"All of their containment equipment was on the (rig)," Flagg said. 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."

Horrified, Homer residents turned to newspapers, to the Alaska Legislature and toward two state governors, Bill Egan and Jay Hammond. Public pressure yielded near-unanimous backing from lawmakers on a planned buy-back of bay oil and gas leases. Development was shut down. In its wake, the Legislature created Kachemak Bay State Park and the Kachemak Bay Critical Habitat Area, a designation believed to permanently keep jack-up rigs from parking in the bay. 

Risky city revenue

So why are Endeavour's legs down at the dock, in 2012? These and other questions have dogged city administrators, Wrede said. Municipal tide lands are not part of critical habitat, to the best of his understanding, but “there’s an active legal debate going on about that right now.”

Attendees asked whether Buccaneer was paying the city of Homer, and if so, how much? Wrede said first month moorage fees -- nearly $900 per day -- had been paid and that October's fees were coming due soon. Total, the rig's delays translated to $45,000 in city revenue, Wrede said. And damages to the port caused by the rig would also be collected.

"It’s not enough," he added, "considering all the effort and stress and staff time" for which the Endeavour might be responsible.

But what's the worst-case scenario for Kachemak Bay from this particular rig?

Cook Inletkeeper's Shavelson said his greatest fear was a blowout; a half-dozen of the underwater spills had been reported in Cook Inlet over the years. Should that happen, he was doubtful Buccaneer could finance a large-scale oil spill cleanup.

"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.”

Buccaneer Alaska is calling two public meetings next week to discuss 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. This story first appeared in The Homer Tribune and is reprinted here with permission.