Shell Asks Government to Bend Rules After Problems in Arctic Ocean
Oceana Says Shell Was Aware of Risks to Investment, Shouldn’t be Given Special Treatment
Press Release Date: October 27, 2014
Location: Juneau, AK
Today, Oceana released a letter from Shell to the Bureau of Safety and Environmental Enforcement (BSEE), which appears to request that BSEE take the unprecedented and questionable step of suspending leases retroactively for years the company was unable to drill exploration wells in the U.S. Arctic Ocean. The letter, dated July 14, 2014, which was obtained as part of a Freedom of Information Act request, appears to justify the request on the grounds that: 1) the company has spent a lot of money, much of which cannot be recouped; and 2) the problems Shell encountered were unforeseen and not its fault.
In its letter, Shell identifies “factors,” including accommodating Native whaling, government failures brought to light in successful lawsuits and agency appeals, and proposed new regulations, as having prevented it from exploring. Acknowledgements in the letter about the difficulties of operating in the Arctic come on the heels of Shell’s arguments to the White House Office of Management and Budget that Arctic-specific safety and prevention regulations are unnecessary and too costly.
Susan Murray, Oceana’s deputy vice president, Pacific, issued the following statement about the request:
“Though this letter is somewhat shocking in its tone and request, we are, unfortunately, no longer capable of being surprised by either Shell’s efforts to skirt rules or the company’s inability to recognize its own role in failing to complete planned exploration activities in Arctic waters. Shell spent billions of dollars fully aware of the risks to that investment, and the government should not bend the rules to allow the company to continue business as usual. Shell deserves no special treatment and, to the contrary, has a track record of irresponsible choices that warrants close scrutiny and the highest standards.
The justifications Shell provides for its request are incomplete and, at best, disingenuous. The company obviously knew—or clearly should have known—about its legal obligations to protect subsistence harvest, the difficult conditions in the Arctic, and about the potential problems with government analyses. Moreover, Shell fails entirely to acknowledge its failed 2012 drilling season and the management and other problems that came to light after the grounding of the Kulluk. Though the government bears some responsibility for authorizing leasing and drilling without accurate analyses of impacts, Shell invested heavily despite the deficient government analysis, and despite the high risk and uncertainty of operating in remote Alaska waters with sea ice, rough seas, high winds and dense fog.
Shell is speaking out of both sides of its mouth about the difficulties of operating in Alaskan waters. The company relies on difficult logistics and a lack of infrastructure to try to justify a departure from normal rules for leases while arguing to the White House that Arctic-specific safety and prevention regulations are unnecessary and too costly. Contradictions and blame shifting from Shell are further indication that the company cannot or will not do what is necessary to operate safely in the Arctic Ocean. The government should deny Shell’s request and should not consider extending leases until and unless it takes steps to ensure that companies can operate safely and responsibly.”