Shell Oil says its controversial Alaska oil exploration program will pump $172.7 million directly into the Puget Sound economy this year and next.
Shell Oil, preparing to return its offshore Arctic drilling fleet to Puget Sound as early as next month, has released a study saying that this year and next its controversial Alaska oil exploration program will pump $172.7 million directly into the economy here.
That spending is expected to support 1,590 jobs and generate $125 million in wages and $312 million in total economic output, which includes direct, indirect, and induced impacts, according to aneconomic impact study released Wednesday.
“Part of the golden rules of Shell is to make sure that we make the communities in which we work and do our business better,” said Mark Guadagnini, Shell’s vice president of Arctic maritime and logistics. “It’s nice to say that, but you have to do the study and get the facts.”
The report does not break out the number of jobs created in Puget Sound, which has been a point of controversy, but rather tallies those jobs in addition to jobs supported by Shell and its contractors in Puget Sound.
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The study, prepared for Shell and the Alaska State Chamber of Commerce by the McDowell Group, also outlines Shell’s economic impact in the region since 2006, when Shell started preparing for the 2012 drilling season after purchasing leases in the Chukchi and Beaufort Seas.
The study estimates that by the end of next year, Shell will have spent about $331 million in the Puget Sound area over a decade. It will have spent almost as much elsewhere to support the activities here.
When indirect impacts (Shell suppliers making purchases) and induced impacts (workers spending their wages) are tacked on, the study estimates the region has seen almost $595 million in economic benefits since 2006.
The drilling effort, and the decision to moor some of the drilling fleet at Seattle’s Terminal 5, have stirred up strong emotions since the Port of Seattle commission announced the plan in January. But many in the maritime industry do not understand why 2015 was met with so much more backlash than 2012, especially considering, as Guadagnini said, Shell is doing the same thing.
“In 2012, the rigs that were under charter for Shell were here in Seattle and here in Vigor’s shipyard,” said John Lockwood, senior adviser at Vigor Industrial and president of the Seattle Marine Business Coalition. “There wasn’t a word and they were here for months.”
The Polar Pioneer is expected to return to Puget Sound before winter, but whether or not the rig is allowed to moor at Terminal 5 is still in the hands of a city hearing examiner. Shell, Terminal 5 lease holder Foss Maritime and the Port are waiting for a ruling on whether or not a new land-use permit is needed.
Activists have argued that environmental impacts of the drilling outweigh any economic benefits. The port “should have held a public process so the public could have weighed in on the wisdom of making Seattle a home port for Shell’s Arctic drilling fleet,” said Patti Goldman, the attorney for an environmental coalition suing the Port and Foss.