Just how much will Shell sink into the Arctic?

Posted by Fran G — 23 January 2013 at 9:00am - Comments
All rights reserved. Credit: © Greenpeace

Today, we published an advert in the Telegraph outlining a long list of disasters that have already befallen Shell and which demonstrate that Arctic drilling is a risk too far. The list is copied here and contains references for the facts referred to in the advert.  

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1, On New Year’s Eve Shell’s Arctic oil rig, the Kulluk, ran aground off Alaska in gale-force winds.  The company had earlier admitted it was only moving the rig in December - despite the extreme weather conditions– because it wanted to leave Alaskan waters to save six million dollars in taxes.

2. Shell’s other Arctic drill ship, the Noble Discoverer, also ran aground, then later caught fire. It is now the subject of a criminal investigation by the US Coast Guard, which has found serious issues with the ship’s safety management and pollution control systems.

3. On January 8th the Obama Administration launched a 60 day review into whether Shell should even be permitted to drill in the Arctic, following the series of mishaps that have befallen the company’s ill-fated investment.  Interior Secretary Ken Salazar said he is concerned about the series of blunders surrounding Shell’s recent Arctic drilling.

4.Two days later Shell was cited by the US Environmental Protection Agency for violating pollution regulations on the Noble Discoverer. The company now faces possible fines or worse for breaching “multiple permit violations”.

5.Last year, in response to questions from the UK Parliamentary Environmental Audit Committee, Shell’s head of emergency response admitted that the company had not yet costed a clean-up operation in the Arctic, leaving shareholders exposed to potentially huge financial losses.  A similar cavalier attitude by BP before the Deepwater Horizon disaster ended up costing the company at least $38bn.

6.In July, US authorities announced that a key vessel in Shell’s oil spill response fleet hadn’t been allowed to sail to the Arctic because it did not meet US Coast Guard safety standards.

7. In September, after repeatedly failing to receive Coast Guard approval for its containment barge, Shell was forced to postpone exploratory drilling operations until 2013 and settle instead for beginning to drill two non-oil producing preparatory wells. It was later revealed that the oil spill containment system was badly damaged in the September testing. A Federal Bureau of Safety and Environmental Enforcement representative disclosed that the sub-sea capping stack was “crushed like a beer can”.

8.The last company to make a substantial investment in Arctic oil drilled 8 wells off Greenland, every one of which came up dry. Cairn Energy threw $1 billion at the Arctic , and in return dropped out of the FTSE 100.

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