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Posts from ‘September, 2010’

Regulators warn drilling oil-spill relief well off Canada’s Arctic coast would take three years

By Andrew Mayeda, Postmedia News August 1, 2010

Workers on the deck of a drill ship set up a well for the Devon Energy Corp. in Canada’s Beaufort Sea. Photograph by: Archive, Calgary Herald

OTTAWA – Drilling a relief well in the ice-infested waters of the Beaufort Sea would take at least three years, leaving an oil spill off Canada’s Arctic coast to gush until the job is done, Canadian regulators warn in newly released documents.

Under the current policy of the National Energy Board, which regulates drilling in the Canadian side of the Beaufort, oil companies must demonstrate the capacity to drill a relief well in the same season in which they dig their original well.

However, briefing notes prepared for NEB chairman Gaetan Caron, and obtained by Postmedia News under the federal Access-to-Information Act, suggest that companies looking to explore for oil in the Beaufort would be unable to meet that requirement.

“The wells that are being planned are anticipated to take three (3) seasons to finish. The actual drilling time is about 100 to 120 days but ice conditions and vessel capabilities mean that an operator would likely not have a continuous period to drill a well, hence multiple season well,” state the briefing notes.

To dig a relief well, operators drill diagonally until they hit the original well, then pump drilling fluid down the borehole until the oil is contained. Although BP recently succeeded in capping its blown-out well in the Gulf of Mexico, the well won’t be considered permanently sealed until BP finishes the two relief wells it has been drilling.

If BP completes the relief wells by next month, as planned, they will have taken roughly three months to drill. But in the Beaufort Sea, the open-water season only lasts between 50 and 85 days, leaving a limited window in which companies can operate.

The briefing notes were prepared for Caron ahead of his appearance on May 13 before the House of Commons natural-resources committee.

The documents show Caron taking care to portray the NEB, an arm’s-length tribunal established in 1959, as a no-nonsense watchdog that vigilantly protects the environment.

“I want to read it slowly, and be no more than 10 minutes, with segments in English and French. The desired outcome of the opening statement is to show a technical regulator focused on facts, evidence, knowledge and hands-on experience in protecting the safety of workers and the environment,” Caron told the NEB staff preparing the briefing notes. “I’d like us to be seen as knowing what we are talking about.”

During his testimony before the natural-resources committee, Caron was asked by New Democrat MP Nathan Cullen if the NEB believes it’s possible to drill a same-season relief well in the Beaufort. Caron replied that the NEB didn’t know if it could be done.

“We have to examine that in detail, with a technical focus based on evidence, based on the best technical expertise around the world, and we’ll apply that to Canada when we find it. We do not have that today, sir,” Caron said.

The Canadian government established the so-called “same-season relief well” policy in the 1970s, and the NEB has maintained the policy since taking over regulation of Arctic offshore drilling in 1991. The NEB hasn’t granted an authorization to drill in the Beaufort since 2004, when Devon was given the green light to explore for natural gas at a relatively shallow depth of 11 metres. (The company found oil instead.)

But in recent years, Imperial Oil and BP spent a combined $1.8 billion to acquire exploratory licences to drill at depths of about 700 metres. Within the offshore industry, depths of at least 500 metres are considered “deepwater.” The deeper drilling goes in the Beaufort, the more difficult and time-consuming it is expected to be to dig a relief well.

At the urging of Imperial, the NEB was conducting a public review of the relief-well policy when BP’s Gulf well blew out on April 20. In the wake of the Gulf spill, the NEB suspended the relief-well hearings and expanded its review to include all its safety and environmental-protection standards.

Digging a relief well would likely require companies to summon a new drillship to the remote waters of the Beaufort. But the briefing notes warn that the drillship most likely to be dispatched, the Kulluk ship owned by Shell, “may be limited to water depths of 400 feet (120 metres) or less.” Meanwhile, the harsh weather and ice conditions could delay the progress of a relief well, according to the notes.

They also caution that the Mackenzie Delta Spill Response Corp., a non- profit organization that would be called upon to help clean up a spill, has “no offshore capability.”

“Capabilities that existed in the 1970s and 1980s are no longer available due to the lack of oil activity in the Beaufort Sea,” the notes state.

© Copyright (c) Postmedia News

Shell’s investigation resumes as protest ends

The Irish Times – Wednesday, September 22, 2010

LORNA SIGGINS Western Correspondent

SHELL EP Ireland has resumed investigative work on the proposed new Corrib pipeline route in north Mayo, following suspension of activity when two Shell to Sea campaigners boarded one of the drilling rigs.

The two campaigners from the Rossport Solidarity Camp secured themselves with a hammock under the drilling rig for 12 hours on Monday from shortly after 7am until 7pm. They were wearing dry suits and had food, and left voluntarily when work was due to finish on the drilling rigs under the licensing terms.

Two other protesters were arrested by gardaí during the demonstration, which began when nine kayakers and swimmers approached the two drilling rigs contracted by Shell to drill up to 80 boreholes in Sruwaddaccon estuary, a special area of conservation. The two detained were later released and a file sent to the Director of Public Prosecutions.

One Garda rigid inflatable boat and up to 13 Shell and security inflatables were monitoring the demonstrators throughout the day.

The Bord Pleanála hearing into the new pipeline under the Strategic Infrastructure Act is continuing this week in Belmullet.

SOURCE ARTICLE

Shell-PetroChina Takeover of Arrow Means $308 Million Profit for New Hope

The takeover of gas producer Arrow Energy Ltd. by Royal Dutch Shell Plc and PetroChina Co. will generate a A$326 million ($308 million) profit for shareholder New Hope Corp., giving the coal miner more cash for acquisitions.

Click to continue reading “Shell-PetroChina Takeover of Arrow Means $308 Million Profit for New Hope”

BP joins effort to contain future Gulf spills

HOUSTON (Reuters) – BP Plc, which permanently sealed its ruptured Gulf of Mexico well this weekend, said on Monday it is joining the industry’s $1 billion effort to contain future subsea oil spills.

Click to continue reading “BP joins effort to contain future Gulf spills”

ERCB approves Shell’s Muskeg River tailings plan, gives leeway on timelines

CALGARY – Alberta’s energy watchdog has given Shell Canada some leeway in approving the company’s plans to deal with waste from its Muskeg River oilsands mine.

Click to continue reading “ERCB approves Shell’s Muskeg River tailings plan, gives leeway on timelines”

Shell, UN to Back $100 Million Plan for Clean Energy Cookstoves

The United Nations Foundation and Royal Dutch Shell Plc’s Shell Foundation plan to help organize an effort to raise as much as $100 million over five years to provide clean-burning cooking stoves to the world’s poor, according to a document outlining the plan.

Click to continue reading “Shell, UN to Back $100 Million Plan for Clean Energy Cookstoves”

A real-time vigil at Shell

Eric Kayne For the Chronicle: Matt Allen, an engineer, works at Shell’s real-time operations center this month in Houston. The center monitors data from wells around the clock.

Shore-based engineers for Shell monitor offshore rigs 24/7 from high-tech centers

By BRETT CLANTON
HOUSTON CHRONICLE

Sept. 18, 2010, 8:18PM

In the months since the Deepwater Horizon accident, Eric van Oort has received inquiries from competitors, investigators and even BP about the network of high-tech centers Shell uses to keep watch over its offshore wells from land.

Shell may gather the same real-time well data other oil companies collect today, but its centers have drawn attention because the company staffs them with engineers who monitor the data around the clock for problems.

“A lot of oil companies use their real-time operating centers in a passive mode, collecting data, being able to do post-mortem analysis. We use them to interact with the rig in real time to keep it actively out of trouble,” said van Oort, performance improvement manager for wells at Shell Upstream Americas, during a tour of the company’s real-time operations center in west Houston.

While no one claims such centers could have prevented the deadly April 20 blowout at BP’s Macondo well, they are getting a closer look as oil companies face pressure by regulators and the public to ensure the safety of offshore drilling.

This summer, in fact, BP began building a 24-hour real-time operations center at its west Houston campus. Expected to be completed by year-end, it will continuously monitor all the company’s drilling and completions work in the Gulf of Mexico, company spokesman Daren Beaudo said. Others could follow suit.

Major oil companies including Exxon Mobil Corp., Chevron Corp. and ConocoPhillips say they use real-time well data to keep tabs on offshore drilling projects, especially big and costly deep-water wells. The information, collected by sensors on drilling rigs and inside wells and beamed to land by satellite, allows shore-based engineers to assist during important drilling phases and intervene when problems arise.

The data also can be stored to create a black-box-like record of each offshore well. But few companies have dedicated staff to track the information as it comes in.

Investigators have relied heavily on real-time data from BP’s Macondo well in reconstructing the hours and minutes leading up to the blowout that killed 11 workers and triggered the worst oil spill ever in the U.S.

The British oil giant, in an internal investigation report this month, concluded that BP and Transocean crew members on the Deepwater Horizon drilling rig misinterpreted clear warning signs about dangerous conditions in the well prior to the explosion and took steps to regain control of the well only after it was too late.
Macondo’s problems

Since the accident, Shell’s well-monitoring engineers have also looked at publicly available data on the Macondo well and noticed problems brewing in the two hours before the blowout, van Oort said. But he declined to speculate on how Shell might have responded differently.

Shell’s first real-time operations center was established in 2002 in New Orleans as a pilot program — and it grew out of a costly mistake.

The year before in the Gulf of Mexico, Shell drilled what van Oort called “our own well from hell,” paraphrasing a BP engineer’s characterization of the Macondo that surfaced in e-mails during the accident investigation. Shell’s project far surpassed its budget, then drillers found when they reached their target that faulting in the formation had allowed all the oil and natural gas to leak out.

“So, we said, ‘We don’t want to do that anymore. It’s just too painful,’ ” van Oort said.
Two goals

The idea behind a dedicated center was twofold.

First, it was to do more well planning on the front end by fostering more collaboration among geologists, reservoir engineers, drillers and others who traditionally had done their work in isolation.

Next, it was to provide around-the-clock monitoring of well data – both to enhance safety and reduce costly errors.

Van Oort estimates Shell’s global network of real-time operation centers now saves the company more than $100 million a year in reduced lost time on wells and other benefits.
Houston center’s focus

In North America, Shell keeps tabs on Gulf of Mexico wells from its center in New Orleans. A center in Calgary, Alberta, watches unconventional gas projects in Canada, and the Houston center handles international wells. The company also has real-time centers in Malaysia, the United Kingdom, Africa and the Middle East.

Inside the Houston center, engineers sit at stations facing 12 stacked computer monitors, four for each of three wells they’re assigned to watch. At one terminal, screens are tracking dozens of streams of data from a key Shell project in Libya. Another terminal follows wells in Brazil and Nigeria, while others are tied to projects elsewhere.

Even small anomalies might prompt an instant message to a crew member on a drilling rig on the other side of the globe, said Luis Hartenstein, one of the engineers. A bigger problem could spur shore-based monitors to recommend shutting in the well, though they cannot operate rig controls remotely.
Big Brother?

Van Oort said some veteran rig personnel initially bristled at the idea of what they saw as Big-Brother-like oversight by the company, but they later came to understand the centers ultimately were keeping offshore crews out of trouble.

“Foremen are busy. Mud loggers on the rig are busy. They have tasks to do. They are not focused on keeping eyes on pit levels,” he said, referring to rig equipment that monitors well fluid levels for dangerous gas influxes. “That’s what we provide.”

Eric Smith, associate director of Tulane Energy Institute in New Orleans, said regulators could require the industry to monitor well data from shore more closely in the wake of the BP accident, and Shell’s centers may provide a template.

“When all of the evidence is in, I’m sure there are going to be people who say, ‘If somebody had been looking at the data at BP, they could have told these guys to stop.’ ”

brett.clanton@chron.com

Eric Kayne For the Chronicle: Eric van Oort, performance improvement manager, says Shell uses the centers “to interact with the rig in real time to keep it actively out of trouble.”

Despite delays, Shell has robust summer program in Arctic


Pete Slaiby, head of Shell’s Alaska operations, says his company has budgeted $130 million for its 2010 work in the Beaufort and Chukchi seas program. This, despite the federal hold on offshore drilling. PHOTO/Michael Dinneen/for the Journal

September 17, 2010

By Tim Bradner
Alaska Journal of Commerce

Despite another holdup in Arctic outer continental shelf exploration drilling, Shell has a substantial summer research program under way in waters off the north Alaska coast, company officials in Anchorage said Sept. 14.

“We have a lot of science work under way, with shallow water hazard studies and our ongoing environmental work. It’s quite a robust program,” said Pete Slaiby, head of Shell’s Alaska operations.

About 400 people are employed in the summer offshore programs in the Beaufort and Chukchi seas and the company had budgeted about $130 million for its 2010 summer work, Slaiby said.

In total, Shell has invested more than $3.5 billion so far in the Alaska Arctic OCS without being given final permission to drill, he said. About $2.2 billion of that was in bids for leases in the Chukchi Sea, off the northwest coast.

On the legal front, Slaiby said he is encouraged over a decision earlier this month by the full 9th Circuit Court of Appeals not to reconsider a decision by a three-judge panel of the court in March that Shell’s exploration permits issued by the U.S. Minerals Management Service (now the Bureau of Ocean Energy Management) were in compliance with the law.

Environmental groups had challenged the permits.

Slaiby said that in May one of the 9th Circuit judges had asked fellow judges on the court to reconsider the March decision in light of the BP well blowout and spill in the U.S. Gulf of Mexico and the federal government’s subsequent decision to delay approvals of drilling permits in deep water and in the Arctic.

The full court’s decision, which came in the first week of September, was to reaffirm the March decision, Slaiby said.

One other new development is that Shell’s shallow hazard survey under way this summer includes work in Harrison Bay, located west of Prudhoe Bay and offshore from the Colville River delta and the producing Alpine oil field.

“On behalf of our partners, Eni and Repsol, we are engaged in shallow water hazard surveys in Harrison Bay,” Slaiby said. Shell is in partnership with the two companies in OCS leases in the area.

Completion of shallow hazard surveys must be done before exploration permits can be filed with the BOEM, Slaiby said.

Shell has put its Beaufort Sea exploration priority on 100 percent Shell leases in the Camden Bay area, east of Prudhoe near the border of the Arctic National Wildlife Refuge, but this is the first indication that Shell believes the Harrison Bay prospects farther west have potential.

“Our immediate priority is still Camden Bay,” Slaiby said.

Both prospect areas of the Beaufort Sea are in shallow waters about 150 feet deep, as is the case at the Chukchi Sea leases that are also on Shell’s priority list if federal government approvals are given.

Shell’s federal exploration plans and air quality permits are approved but are on hold pending further actions by agencies. Interior Secretary Ken Salazar said in early September that approvals on drilling permits by the BOEM will not be given until the agency completes its findings on the Deepwater Horizon accident in the Gulf of Mexico, which is expected later this year.

The U.S. Environmental Protection Agency issued approvals on air quality permits for drilling in both the Beaufort and Chukchi seas, but then withdrew approval when environmental groups filed challenges with the Environmental Appeals Board, an internal EPA review panel.

A hearing on the appeal is set for Oct. 7, and Slaiby said Shell hopes for a final decision on the air permits by the end of the year. If they are issued, permits will be good for several years of drilling in both the Chukchi and Beaufort exploration areas, he said.

In an Anchorage press conference Sept. 3, Salazar would give no estimate on when Shell’s drilling applications might be approved.

Slaiby said Shell must have a decision from the government by the end of December to allow time for mobilization for a 2011 exploration program.

Meanwhile, the company has moved its drillship Kullik to Unalaska, where it is moored in Dutch Harbor. The vessel, formerly in the Canadian Beaufort Sea, was modified by Shell to support the 2007 drilling program, but would now serve as a backup drill ship in case a relief well is needed for Shell’s Arctic exploration, once it begins.

The company will still rely mainly on the Frontier Discoverer for its Beaufort and Chukchi drilling, if approvals are given for 2011.

Tim Bradner can be reached at

tim.bradner@alaskajournal.com

SOURCE ARTICLE

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Murphy’s Law and Shell drilling in the Arctic Ocean

Why We Mustn’t Allow Shell to Go… to America’s Arctic Seas

Court Tightens Rules on Overseas Abuse Cases

In a separate opinion in the case, Second Circuit Judge Pierre Leval criticized the majority ruling. “So long as they incorporate,” he wrote, “businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy—all without civil liability to victims.”

THE WALL STREET JOURNAL

By NATHAN KOPPEL SEPT 18, 2010

Plaintiffs will have a harder time suing oil companies and other multinational groups over human-rights abuses overseas following a federal court ruling on Friday.

The Alien Tort Statute, a 1789 federal law that allows suits for violations of ‘the law of nations,’ has been used in recent years to target a number of U.S. companies including Chevron Corp. for alleged crimes committed overseas.

Alien tort suits have particularly targeted companies that partner with foreign governments in oil exploration.

The Second U.S. Circuit Court of Appeals yesterday dismissed a suit brought by Nigerian residents, who alleged that three subsidiaries of Royal Dutch Shell PLC were complicit in crimes against humanity in Nigeria.

Alien tort claims, the court ruled, can be brought only against individuals, not corporations.

“No corporation has ever been subject to any form of liability under the customary international law of human rights, and thus the [Alien Tort Statute] . . .does not confer jurisdiction over suits against corporations,” Second Circuit Judge José Cabranes wrote on behalf of the court.

“This opinion threatens to effectively stop Alien Tort Statute litigation in its tracks,” said Donald Childress III, an associate professor at Pepperdine University School of Law who specializes in international law.

Foreign governments are largely immune from suits related to their official actions, he said. So plaintiffs have instead targeted companies that do business with foreign governments. “The companies have the deep pockets,” he said.

Now that it is harder to sue companies, victims will have to pursue chief executives or other high level officials, said Maria LaHood, an attorney with the Center for Constitutional Rights, a nonprofit legal organization that has brought many alien tort suits.

Carey D’Avino, a lawyer for the plaintiffs, said his clients will ask the Second Circuit to reconsider its ruling. “We do not believe that today’s decision is the last word on the subject,” he said.

Suits that complain of conduct overseas should be filed in foreign courts, said Thomas Niles, the Vice Chairman of the United States Council for International Business. “Plaintiffs come to the United Sates [to file cases,] because if you win a case you hit the lottery,” he said.

In a separate opinion in the case, Second Circuit Judge Pierre Leval criticized the majority ruling.

“So long as they incorporate,” he wrote, “businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy—all without civil liability to victims.”

—Ashby Jones contributed to this article.

Write to Nathan Koppel at nathan.koppel@wsj.com

SOURCE WSJ ARTICLE

Rocky Mountain Arsenal ready for its post-Superfund life

Shell… arrived in 1952 and for three decades produced chemical pesticides, such as dieldrin, that Shell sold worldwide for agriculture.


After 23 years and $2.1 billion, the Rocky Mountain Arsenal is ready to be removed from the nation’s Superfund list of environmental disasters.

Environmental Protection Agency officials are transferring a final 2,500 acres at the 27-square-mile site to the U.S. Fish and Wildlife Service. This clears the way for the arsenal’s new incarnation as a national wildlife refuge.

U.S. taxpayers paid for the bulk of the cleanup — done by the Army and Shell Oil under a legal settlement.

For half a century, the arsenal at Denver’s northeast edge loomed as a secretive complex of more than 250 buildings with signs around it warning “Use of Deadly Force Authorized.” There, the Army made chemical weapons and later, Shell made pesticides.

Residential and commercial development gradually encroached on the site. Today, 47 bison roam, raptors circle and badgers burrow on recovering short-grass prairie 10 miles from downtown Denver.”We’ve transformed a very highly contaminated site into a beautiful prairie landscape,” said Carol Campbell, the EPA’s assistant regional administrator handling Superfund cleanups and other officials. “Because it is something that people now can go to and enjoy, it is different from other Superfund cleanup sites.”

The Army still will be responsible for 725 acres of fenced-off land where toxic materials were consolidated and buried. Devices called lysimeters, about 6 feet beneath the clay and dirt, are supposed to verify that surface water isn’t reaching the waste.

In addition, monitoring of the already-contaminated groundwater at the arsenal must continue to ensure that lethal chemicals don’t spread farther toward the South Platte River.

“We feel that those remedies are protective of human health and the environment,” EPA project spokeswoman Jennifer Chergo said.

The U.S. Fish and Wildlife Service is charged with running the wildlife refuge, with a $7.4 million visitor center under construction.

Nearly 25,000 people a year visit the site. With marketing and eventually a new entrance north of Interstate 70, off Quebec Street, federal officials say they expect visitation to at least quadruple.

Plans call for carrying visitors around the refuge’s lakes and ponds in open-air buses. About 8 miles of walking trails have been cut.

Wildlife already is thriving, including dozens of coyotes, about 30 bald eagles, hundreds of deer, hefty large-mouth bass and waterfowl such as egrets and herons.

Much of the refuge eventually will be devoted to bison with a herd of up to 250, fenced off from people, refuge manager Steve Berendzen said.

Friday, Army and Shell officials inspected the cleanup and met with Xcel officials about burying power lines.

“Shell is real proud of the end result,” Shell’s site manager, Roger Shakely, said. “We’ve met the budget, and we are one year ahead of schedule.”

Army leaders see this as a model for cleanups, the Army’s arsenal program manager, Charlie Scharmann, said. “So many good things came out of this project.”

Once, homesteading farmers and ranchers lived here. In 1942, the Army established the arsenal to make mustard gas and blister agent to deter Japan and Germany. Then, during the Cold War, factory workers in body suits and gas masks produced thousands of tons of napalm and sarin nerve gas, which was stuffed into bomblets that were placed in Honest John rocket warheads.

Army leaders later leased the site to private companies, including Shell, which arrived in 1952 and for three decades produced chemical pesticides, such as dieldrin, that Shell sold worldwide for agriculture.The liquid waste was dumped in evaporation ponds. Solid waste was dumped into trenches. More than 600 lethal chemicals spread through the soil into groundwater.

Ernie Maurer, 88, whose Swiss immigrant family lived on a farm here, recalled how Army officials “gave us 30 days notice” to leave. The Army told them that “because Germany was making that mustard gas, we needed to do it here,” he said.

“We were disappointed. The thing we didn’t like about it was that they treated us like foreigners, you know?”

Now Maurer works as a volunteer tour guide at the refuge, delighted that the cleanup finally appears to be done.

“I like it to be the way it was,” he said. “Denver’s growing too big for me. I like the prairie out here.”

Bruce Finley: 303-954-1700 or bfinley@denverpost.com

DENVER POST ARTICLE

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Brazil Court Fines Shell, Basf for Making Workers Sick

The plant was built in 1977 by Shell… Dozens of former employees of the plant have been diagnosed with prostate, thyroid and other types of cancer, circulatory, liver and intestinal illnesses, as well as infertility and sexual impotence, the statement added.

Shell Pesticide Revelations:

Shell knew early on what a potential long term and persistent environmental and health menace these pesticides were. Yet they kept producing them and moving production to new locations even as one country after another banned their use. This is a very ugly story of corporate greed and utter contempt for the welfare of their employees and the consuming public in general.