Reuters: RPT-UPDATE 1-Sierra Club sues Shell over refinery pollution

Posted on January 7, 2008 by admin.
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Mon Jan 7, 2008 11:50pm GMT 
(Recasts, updates with Shell comment and lawyer comment)
By Erwin Seba

HOUSTON, Jan 7 (Reuters) - The Sierra Club, the largest and oldest U.S. environmental organization, filed a federal lawsuit on Monday against Shell Oil Co and subsidiaries over pollution at a refining and chemical plant complex along the Houston Ship Channel.

Shell could face a maximum fine of $32,500 for each of an estimated 1,000 incidents between 2003 and 2007 when the Deer Park, Texas, refinery and chemical plant exceeded levels of pollution allowed under permits issued by Texas regulators.

Shell has been cited by regulators and paid fines for some of the incidents, Joshua Kratka of the National Enviromental Law Center, which represents the Sierra Club and Environment Texas in the lawsuit, told reporters.

The fines have not been enough to stop preventable pollution, Kratka said.

“Shell is paying to pollute,” he said. “Shell is factoring these fines into its costs of operating these facilities.”

Shell declined comment on the specifics of the lawsuit, but said the company hoped to continue discussions with the Sierra Club and Environment Texas about the issues raised in the lawsuit.

“Shell Deer Park refining and chemical share the goal of the Sierra Club and Environment Texas to improve air quality,” the company said in a statement.

Pollution from the refinery and chemical plant is regularly pushed by prevailing Gulf Coast winds to neighborhoods along the ship channel, said a resident of the area.

“We don’t have a magical fence that stops it from coming to us,” said Karla Lands, a resident and business owner in the Houston suburb of Channelview, Texas, north of the Deer Park complex.

A former U.S. Environmental Protection Agency enforcement offical said to be successful the organizations will have to prove the state enforcement efforts, which include plans to prevent future malfunctions, were ineffective.

“They’re going to have to address that these problems have already been addressed,” said Richard Alonso, attorney with Bracewell, Giuliani.

A University of Texas study released in 2007 found a possible link between childhood leukemia and living within 2 miles of the Ship Channel’s refinery row.

The Sierra Club lawsuit was filed in the U.S. District Court for Southern District of Texas under the U.S. Clean Air Act which allows citizen lawsuits to gain enforcement of the act’s provisions.

The Deer Park refinery is the eighth-largest U.S. refinery and a 50-50 joint venture between Shell and Mexico’s state-owned oil company, Pemex.

Shell Oil Co, based in Houston, is the U.S. unit of Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research).

(Editing by David Gregorio)

© Reuters2008All rights reserved.

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Houston Chronicle: Shell sued over Deer Park refinery emissions

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CINDY GEORGE
Copyright 2007 Houston Chronicle
Jan. 7, 2008, 2:49PM

Environmental activists filed a federal lawsuit today against Shell Oil on behalf of citizens, saying state and federal environmental officials have failed to enforce the Clean Air Act at the company’s Deer Park plant.

Environment Texas Citizen Lobby and the Sierra Club claim Shell and several of its subsidiaries have released millions of pounds of excess air pollutants along the Houston Ship Channel over the last five years, including benzene and other toxins that can cause cancer and respiratory problems.

During a news conference this morning, group leaders accused the Texas Commission on Environmental Quality and the U.S. Environmental Protection Agency of not stopping the violations.

“On average, more than once a week, Shell Oil Co. has self-reported that it violated its permit limits and released millions of pounds of chemicals and harmful pollutants into the air around the Houston Ship Channel,” said Luke Metzger, executive director of Environment Texas. “Already, Shell Oil is authorized to emit staggering amounts of pollutants into the air and with Houston’s air as bad as it is, it is simply unforgivable for them to exceed those permits .”

EPA spokesman David Bary declined to comment on the case, but said the agency is doing its job. He noted that most of the authority for permitting and enforcement has been delegated to TCEQ.

“The EPA …will continue to vigorously enforce our nation’s environmental laws to ensure protection of public health and the environment,” Bary said.

As of early afternoon, Shell had not responded to a request for comment. A TCEQ spokesman said the agency does not comment on lawsuits.

Houston and Harris County have been home to some of the nation’s worst smog and air pollution.

“The air where I live is very bad,” said Karla Land, who owns a motorcycle salvage yard and repair shop in Channelview and has lived there for 30 years. “When the wind blows up from the south, like it usually does, I know I am breathing whatever is coming out at the Shell Deer Park plant. There’s a very strong smell of sulfur sometimes from that direction.”

According to TCEQ, Shell’s Deer Park facility is the second-largest air polluter in Harris County, behind Exxon Mobil’s Baytown refinery.

Shell has permits that govern the type and amount of pollutants that can be emitted from the 1,500-acre Deer Park facility. There are hourly and annual limits. Shell is required to tell state officials every time an equipment breakdown or malfunction leads to an unpermitted release of air pollutants.

“We’ve collected over 300 of those reports — self-reported illegal emissions from upset events over the last five years … which add up to a total of more than 1,000 separate violations of Shell’s own permit. We know Shell’s breaking the law because Shell tells us they’re breaking the law,”said Joshua Kratka, a senior attorney with the Boston-based National Environmental Law Center, which represents citizen groups across the country in similar lawsuits. He said the technology exists to prevent most upset emissions.”The TCEQ repeatedly sends notices of violations to Shell for these incidences. Sometimes the TCEQ also issues a fine or a penalty and Shell pays some of those penalties and yet, the violations keep continuing. In effect, Shell is paying to pollute,” Kratka said.

The Clean Air Act allows private citizens to file an enforcement suit against any company violating the laws when regulatory agency enforcement has been nonexistent or ineffective. Before filing a legal action, the alleged violator must be send a notice letter to the company, EPA and TCEQ. Environment Texas and the Sierra Club sent their notice in October.

After several upset emissions in November and December, the groups decided to sue.

“Until the state of Texas starts enforcing the law and making our air safe to breathe again, the people of Texas are going to have to do their job for them,” Metzger said.

cindy.george@chron.com

http://www.chron.com/disp/story.mpl/business/energy/5433848.html

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Reuters: Sierra Club sues Shell over Texas refinery pollution

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Mon Jan 7, 2008 8:24pm GMT 
By Erwin Seba

HOUSTON (Reuters) - The Sierra Club, the largest and oldest U.S. environmental organization, filed a federal lawsuit on Monday against Shell Oil Co and subsidiaries seeking to stop pollution during malfunctions from its refining and chemical plant complex along the Houston Ship Channel.

Shell could face a maximum fine of $32,500 for each of an estimated 1,000 incidents between 2003 and 2007 when the Deer Park, Texas, refinery and chemical plant exceeded levels of pollution allowed under permits issued by Texas regulators.

Shell has been cited by regulators and paid fines for some of the incidents, Joshua Kratka of the National Environmental Law Center, which represents the Sierra Club and Environment Texas in the lawsuit, told reporters.

The fines have not been enough to stop preventable pollution, Kratka said.

“Shell is paying to pollute,” he said. “Shell is factoring these fines into its costs of operating these facilities.”

Shell representatives did not have immediate comment about the lawsuit on Monday.

Pollution from the refinery and chemical plant is regularly pushed by prevailing Gulf Coast winds to neighborhoods along the ship channel, said a resident of the area.

“We don’t have a magical fence that stops it from coming to us,” said Karla Lands, a resident and business owner in the Houston suburb of Channelview, Texas, which is north of the Deer Park complex.

A University of Texas study released in 2007 found a possible link between childhood leukemia and living within 2 miles of the Ship Channel’s refinery row.

The Sierra Club lawsuit was filed in the U.S. District Court for Southern District of Texas under the U.S. Clean Air Act which allows citizen lawsuits to gain enforcement of the act’s provisions.

The Deer Park refinery is the eighth-largest U.S. refinery and a 50-50 joint venture between Shell and Mexico’s state-owned oil company, Pemex.

Shell Oil Co, based in Houston, is the U.S. unit of Royal Dutch Shell Plc.

(Editing by Matthew Lewis)

© Reuters2008All rights reserved.

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Daily Telegraph: Shell CEO says oil price is slowing investment

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Daily Telegraph image: Jeroen van der Veer

The Shell boss Jeroen van der Veer says higher oil prices is not all good news for producers

By Russell Hotten
Last Updated: 4:08pm GMT 07/01/2008

The chief executive of Royal Dutch Shell, Jeroen van der Veer, has warned that higher oil prices are slowing the start of new production projects.

Governments, which award operating licenses, are driving a harder bargain to ensure they get a share of the revenues.

Mr van der Veer told Shell’s in-house magazine that governments’ “active interest” in their domestic oil industry is starting to “have an influence on the tempo in which new projects start production.”
  
He said: “You’d think that higher oil and gas prices result in an acceleration of the decision-making, but in reality the opposite happens….[Governments] negotiate longer than in the past about their share in the proceeds.”

Last week oil prices in New York briefly topped $100 a barrel for the first time as the cold weather in Europe and America boosted demand and violence in Nigeria, Africa’s largest producer, heightened concerns about a disruption to supplies.

Mr van der Veer told Shell Venster magazine that he was “relatively” surprised by the strength of demand despite the high oil price. “But I think that demand will react at the current price, albeit with a certain delay,” said Mr van der Veer, who expects slowing demand. There’s also a lot of psychology in the oil price, he said.

Shell, Europe’s largest oil company, invested about $2bn a month in 2007. The company estimates by 2015 about 15pc of its production will come from unconventional oil projects, such as its oil sands operations in Canada.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/07/bcnshell107.xml

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London Evening Standard: Bets are on oil at $200 a barrel

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7 January 2008

With the price of oil tipping over $100 a barrel for the first time in history shortly after the turn of the year following a controversial ‘vanity trade’ by an overnight dealer, it has emerged that bets are being placed on the price topping $200 a barrel during 2008.

Figures from New York’s Nymex commodities exchange show a 10-fold rise in options being taken on a price rise to $200 over the next year.

Most investment houses forecast oil will average between $80 and $90 a barrel this year, and the options bets have been dismissed as long-shot insurance against a low-probability event.

Qantas set for surcharge rise

Qantas today said it is to raise fuel surcharges on international routes for the second time in less than a year.

Australia’s largest airline said the increases of as much as 16.7%, to take effect from 17 January, were in response to record fuel prices.

Passengers flying between Australia and Europe will have to pay a surcharge of A$210 (£93.56), up from A$185.

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=428938&in_page_id=3

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IT WEEK Rise of hosted IT spells gloom for outsourcers: But Shell still plans to outsource 3000 IT jobs

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Rosalie Marshall and Dave Bailey, IT Week, 07 Jan 2008
 
This year will see in a shift in the IT services market as firms turn to direct sourcing from hosted software providers, rather than traditional outsourcing opportunities, according to industry experts.

Richard Sykes, chair of the Outsourcing Group at IT trade association Intellect, pointed to the difference between direct sourcing and classic outsourcing as “very high productivity server farms at work rather than thousands of IT professionals”.

In reaction to recent reports about Royal Dutch Shell’s plans to outsource around 3,000 IT staff to three services providers ­ EDS, AT&T and T-Systems­ Sykes said this would be a “conservative deal” that is unlikely to achieve maximum cost savings. “Shell could become more competitive by buying services straight off the internet,” he added, for example online email and CRM systems provided by Google and Salesforce.com respectively.

A new book due to be published tomorrow by Nicholas Carr, ­famed for his IT Doesn’t Matter article, also promotes the direct sourcing model.

Carr argues that the cost benefit to firms through use of large utility computing providers, whose economies of scale would dwarf in-house efforts, will eventually lead to on-demand software dominating firms’ IT infrastructures.

“It may take decades for companies to abandon their proprietary supply operations and all the investments they represent. But in the end the savings offered by utilities become too compelling to resist, even for the largest enterprises,” he explained.

Clive Longbottom, service director at analyst Quocirca, pointed out that the biggest barrier to Carr’s model is mindset. “For large organisations in particular, it would be a very brave CIO and COO who would go the whole hog. The first time there’s a break in connectivity they’d suddenly say, ‘Hell, we can’t do anything at all’,” he added.

According to Sykes, the trend by small and medium-sized enterprises towards direct sourcing deals will also result in fewer contracts involving Indian locations because the services are more automated and less people intensive.

The movement to locations for offshore services other than India is an outsourcing trend set to continue in 2008. Indian provider Cognizant has about 500 professionals in Shanghai and plans to double the headcount in the next 12 to 18 months, according to Henry Yang, head of the firm’s China Development Centre.

Meanwhile, experts are playing down reports that Indian offshoring giant Wipro is looking to acquire Capgemini. In late December, a Hindustan Times story said that a bid is expected to take place in January. Ovum analyst Phil Codling said the deal made little sense “in terms of business strategy and logic”.

http://www.itweek.co.uk/itweek/news/2206587/rise-hosted-spells-gloom-3732882

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Silicon.com: Shell’s outsourcing plans face legal threat: Union argues employees being ‘dumped’

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By Nick Heath

Published: Monday 7 January 2008

Shell is facing the threat of legal action from trade union Amicus over staff redundancy terms, which could hit the oil giant’s plans to outsource up to 3,200 tech jobs.

The oil multi-national is in the process of finalising contracts with AT&T, EDS and T-Systems to run the bulk of its global IT infrastructure as part of a cost-cutting drive.

But the outsourcing plans may be affected by wider legal action being threatened by Amicus to force Shell to reinstate a company redundancy package worth up to £200,000.

Amicus said Shell replaced the £200,000 pay-off provision in June last year with an agreement where employees who are made redundant will now only receive a package worth up to £50,000.

Regional Amicus officer Graham Tran told silicon.com there is widespread unhappiness among Shell staff and a feeling that “loyal” employees are being “dumped”.

He said: “We just want Shell to look after its loyal employees. It no longer has a commitment to the workforce.”

Amicus is hoping legal action will force Shell to reinstate the more favourable HR policy before the IT outsourcing contracts are signed.

As well as securing better payouts for any immediate lay-offs, this would mean those IT workers who are transferred from Shell to the outsourcing companies will be guaranteed the higher pay-out should their new employers decide to make them redundant further down the line.

Trans said: “If we are successful [in getting Shell to honour the original HR policy] the new employer will pick up responsibility for that.”

That could potentially cost AT&T, EDS and T-Systems millions when they take on Shell IT staff as part of the outsourcing contracts to run the oil company’s IT infrastructure.

Shell is apparently arguing the previous redundancy package with the larger payout terms only applied to offshore oil rig staff and not IT workers, something Amicus is disputing.

Tran said: “Shell is arguing that it did not apply to the IT people. [But] it was negotiated by the staff rights committee and both offshore and onshore workers had representatives on that committee.”

Shell declined to comment on its HR policies and redundancy terms.

Tran said the bulk of the IT employees affected were in the UK, with many at Shell’s HQ in Aberdeen, and the rest based in Europe.

He said: “The majority of staff will be transferred but I would not rule out redundancies in future. The feeling is that these people are being dumped by Shell after years of loyal service.”

Contracts for the IT outsourcing are expected to be signed in March, with EDS taking over end user computing services, T-Systems hosting and storage services and AT&T managed network services.

Shell has been quoted as saying it plans to make pre-tax cost savings of about $500m per year through streamlining its structure and cutting and outsourcing jobs. Shell employs about 108,000 people worldwide.

http://management.silicon.com/government/0,39024677,39169570,00.htm