News Column

Shell Gambles Billions in Arctic Alaska Push

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The event is now known as the New Orleans Jazz & Heritage Fest Presented by Shell, sponsorship that has met with mixed reaction.

"Some people are just absolutely offended by it. I know people haven't been to Jazz Fest since that happened. Some people are very thankful. They go, 'Oh, they saved Jazz Fest,' " said Aaron Viles, deputy director of the Gulf Restoration Network, a 17-year-old environmental advocacy organization.

Shell is No. 1 in employee contributions to the United Way in Southeast Louisiana; company executive John Hollowell is chairing this year's fundraising campaign there.

One Shell Square, its 51-story skyscraper in the heart of downtown New Orleans, is Louisiana's tallest building, a cousin to its U.S. headquarters in Houston.

If Shell gets to move ahead with its plans for the Arctic, the company expects to build an Alaska headquarters in Anchorage.

"In one very significant way, that is what success looks like," said Curtis Smith, a spokesman for Shell in Alaska.

The 65 or so Shell employees already here work out of two floors in the Frontier Building in Midtown. Just recently, one of its New Orleans-based contractors, Superior Energy Services, signed a five-year lease on part of the building housing the Anchorage Daily News, a McClatchy newspaper and the publisher of this report.

When other oil companies moved their Gulf operational headquarters out of downtown New Orleans, Shell stayed.

"Here in New Orleans, they're a much-admired company," said Eric Smith, a Tulane University professor and associate director of the business school's Energy Institute. "They've been here as long as there's been oil around here."

And they're the oil company others learn from. Literally.

"They have pioneered all the development of deep-water (wells) in the area," Eric Smith said.

When Shell and BP joined up years ago on a deep-water Gulf of Mexico platform, Shell was the operator.

"BP went to school on Shell," Smith said.

Shell's training center near here -- with classes in drilling, production, safety, electronics and more - is open to its competitors. The facility served as an initial base of operations during the Deepwater Horizon crisis.

The blowout on BP's Macondo prospect, involving the Deepwater Horizon rig, killed 11 workers and spewed millions of gallons of oil into the Gulf of Mexico.

Shell's chief well scientist, Charlie Williams, was a top adviser to the Deepwater Horizon incident commander. Williams is now board chairman of the new Center for Offshore Safety, an industry-led group that will help oil companies comply with tougher requirements, some of them mirroring what Shell already does.

Shell had a disastrous Gulf of Mexico well blowout and fire, too, back in 1970 in the Bay Marchand field, which was offshore though not in deep water.

Four men were killed; 2.2 million gallons of oil leaked into the Gulf over a number of months; 10 relief wells were drilled.

The spill was Shell's worst ever. As with the Deepwater Horizon, things went wrong in ways no one expected and people made mistakes.

Bea, who worked as a Shell engineer in the 1960s and '70s, helped design the multiwell platform in the Bay Marchand field.

"Something overcame Shell. I'll call it the drive to make money," Bea said.

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