Posts from ‘November, 2011’

Updated: 2011-11-09

By Peter Voser (China Daily)

Coordinated global response is needed to meet challenge of providing more energy for more people and cutting CO2

Our world reached a significant milestone on Oct 31 when a mother gave birth to the Earth’s 7 billionth inhabitant. At this rate, the Earth will be home to more than 9 billion people by 2050 a number with an enormous potential impact on the global demand for energy, water and food.

Planning wisely for the future energy needs of this huge population is one of the most important challenges our generation faces, in part because it is far more than just an energy issue. Our future energy challenge is also a global security issue, an environmental issue, an economic issue and a jobs issue.

The global energy system is already in the early stages of a fundamental transformation. The future will see expanded use of renewable energy and cleaner fossil fuels. We will have more energy choices, but those choices will be more costly, so we will all have to become smarter about using energy efficiently.

Despite the scale of the challenge, I’m confident human ingenuity and technological innovation can make it happen. But what is lacking today is the common will to act. Getting where we need to go will require a new level of leadership and global collaboration on multiple fronts.

But the leadership triangle of government, business and society is increasingly ineffective. We need to rekindle the spirit of global cooperation and leadership that helped us deal with past challenges.

Simply put, our challenge is to produce far more energy for a world with far more people. At the same time, we need to reduce CO2 emissions and get smarter about how we extract and use our resources. And we will need to do this against a backdrop of almost constant volatility and change.

A big part of a broader global energy mix will be the rapidly expanding contribution of renewable energy resources. Up to 30 percent of the world’s energy mix could come from renewables by 2050. But that target assumes a very rapid growth rate that will require significant effort and sustained investment.

Even if the world achieves this target, all forms of energy will need to be developed to meet the future demand.

Among fossil fuels, natural gas will play an increasingly important role. It is the cleanest burning and the best ally of wind and solar power, which need a highly flexible backup.

Natural gas is also an ideal alternative to coal-fired power plants, emitting 50 to 70 percent less CO2. Replacing coal with gas to produce electricity is, by far, the fastest and least expensive way for the world to reduce CO2 emissions in the energy sector. Gas is affordable, its resource base is vast and widely dispersed, and it can help diversify energy supplies all of which enhance energy security.

It is also important that we focus on the ways in which water, energy and food are interconnected. Water is used to produce nearly all forms of energy energy is used to move and treat water, and energy and water are used to produce food. There is a growing awareness that the path to a more sustainable energy future will require society to balance the needs of these systems, while at the same time, keeping sight of carbon emissions and other resource stresses.

At Shell we have brought together specialists from various fields to map the links and better understand the trade-offs. Our early findings have identified two important factors that could help avoid a future water-energy-food crisis: smart urban development and greenhouse gas regulation and pricing.

Cities today hold half of the world’s population and generate up to 80 percent of its CO2 emissions. The global urban proportion is expected to grow to 75 percent by 2050. So the way in which our cities develop will greatly affect energy and water demand.

Through more efficient public transport, energy-efficient buildings and designs that utilize waste heat as an efficient energy source, and through investing heavily to upgrade our infrastructure, we can offset some of the growth in energy demand while creating new jobs.

But what is still urgently needed is a global consensus on greenhouse gas regulation and pricing. Widespread adoption of the most cost-effective CO2 reduction measures will only occur when governments promote frameworks to price CO2.

It brings us back to the need for leadership and global collaboration.

The absence of coherent energy policies among some of our largest energy-consuming nations and regions is a direct result of the lack of leadership and, more broadly, a troubling lack of basic trust between business, government and society.

Rather than choosing winners and losers, governments should set the goals and then provide appropriate incentives that let the market determine the most effective solutions.

I’m optimistic we will meet this challenge, as there are past examples of global leadership that offer hope. The coordinated response to the 2008 financial crisis is one. The international agreement to ban substances blamed for depleting the ozone layer is another.

Today we have a major opportunity to address the energy challenge in a way that avoids unnecessary pain in the future. Let’s not waste it.

The author is chief executive officer of Royal Dutch Shell. The article is based on a speech he delivered on Oct 31 to the Singapore Energy Summit.

(China Daily 11/09/2011 page8)

SOURCE ARTICLE

8 November 2011

The US state department’s handing of a request to build Keystone XL, a 1,600-mile (2,700km) oil pipeline, will be reviewed for wrongdoing.

Reports have surfaced that a company involved in the environmental review had listed developer TransCanada as a “major client”.

The review decision comes a day after demonstrators protested against the pipeline plans outside the White House.

A review could potentially delay a final decision on the pipeline.

The state department is handling public consultations on the project as the pipeline would cross the US border with Canada, but the White House has made it clear that President Barack Obama will influence the final outcome.

The review request was led by Senator Bernie Sanders of Vermont and Representative Steve Cohen of Tennessee, both Democrats.

“At a time when all credible scientific evidence and opinion indicate that we are losing the battle against global warming it is imperative that we have objective environmental assessments of major carbon-dependent energy projects,” Mr Sanders said.

In an October letter, Mr Sanders and Mr Cohen specifically asked the state department’s inspector general to look at all contractual or financial ties between the consultant, Houston-based Cardno Entrix and TransCanada.

They also asked for a review of state department emails related to a TransCanada lobbyist who had worked in Secretary of State Hillary Clinton’s 2008 presidential campaign.

TransCanada, which is seeking permission to build the pipeline from Alberta to the Gulf coast in Texas, said it welcomed the review.

“We conduct ourselves with integrity and in an open and transparent manner. We are certain that the conclusion of this review will reflect that,” spokesman James Millar told the Associated Press news agency.

Pollution and political risks

Environmentalists are opposed to the Keystone XL project because of the method used for extracting petroleum from Alberta’s oil sands.

They are also concerned by the risk of pollution on the pipeline route.

The proposed pipeline would pass south from Alberta through the US states of Montana, South Dakota, Nebraska, Kansas and Oklahoma before ending up at refineries in Texas.

Correspondents say the decision to allow the project or not is fraught with political risk for Mr Obama.

If he rejects it, he could be accused of destroying jobs. But allowing it to go ahead could lose him the support of activists who helped propel him to the White House, they note.

On Sunday, protesters formed a human chain around the White House, with some carrying an inflatable replica of a pipeline on their shoulders.

“We have to leave the tar sands oil in the ground. That’s the only solution if we are going to save the planet,” protester Martin Springhetti told AP.

SOURCE ARTICLE

By John Donovan

For the record, the litigation news reports in the “Motiva Live News Feed” – eg. Nintendo Stomps Motiva’s Patent Infringement Claims - relate to a small company called Motiva LLC, not Motiva Enterprises, the company owned jointly by Shell and the Saudi regime.

The apparent clash prompted memories of the time that we approached Nintendo and Shell proposing a Nintendo themed instant win promotional game for Shell forecourts. We went to the trouble of obtaining approval from Nintendo before disclosing our proposal to a Shell executive, Andrew Lazenby, on a strictly confidential basis.

While the signs were encouraging with a fax received from Mr Lazenby containing a handwritten message saying: “Thanks John. I’ll be back in touch when we’ve made any further progress. Cheers. Andrew” – Shell was secretly producing a Nintendo themed instant win game.

The first I knew about it was when I turned over a page in a Daily Mail newspaper and saw a colourful advert for a Nintendo promotion on Shell forecourts, which bore a striking similarity to the promotion that I had put forward to Andrew.

During a telephone conversation that same day Andrew professed to be ignorant of the meaning of confidentiality. He said to me: “Under terms of confidentiality? I don’t even know anything about this stuff, you’re the expert.”

To my further surprise, Andrew went on to assert that the “Make Money” game was Shell’s property. I reminded him of our joint rights agreement with Shell on the “Make Money” promotion. He replied, “I don’t care about that”. He evidently thought that because of its financial muscle, we would not dare to go up against Shell in the Courts. He was dead wrong.

I also drew his attention to a serious security flaw in the Nintendo game that potentially enabled staff at Shell stations to identify prizes that were supposed to have been concealed under a latex (scratch-off) patch. He accepted that I had identified a problem. We subsequently discovered from Shell “discovery” documents, that Shell was aware, even before the launch date, that they had a serious problem with print security. Shell still ran the scheme for its full term – so much for Shell’s “Profits & Principles” pr line – it should have been “Profits and No Principles.”

It became obvious during my discussions with Lazenby and another Shell executive, David Watson, that Shell was up to something with the “Make Money” game. This was confirmed by a high level insider source. Shell was secretly producing a “Make Money” game in direct breach of the joint rights agreement. 100 million game pieces were being printed in North Wales.

We immediately issued High Court proceedings, threatening to serve an injunction and to send legal notifications to every Shell petrol station in the UK.  Shell settled the case out of court.

We subsequently discovered and demonstrated to a team from Shell that the “Make Money” game was totally insecure, with employees being potential able to identify and pick out all winning game pieces. Shell continued with the promotion despite this knowledge.

We also issued proceedings in respect of the Nintendo themed game. Shell also settled that action along with two further High Court cases we brought against the company, all involving the same Shell executive, Andrew Lazenby. Four successive claims, plus two High Court libel actions and a County court case, all settled in our favour by Shell.

Never guessing that his hand-written diary entries would be exposed to scrutiny in the High Court, Lazenby made entries which revealed that he was a disgruntled employee and was intent to “Set up personal business while @ Shell 35 yrs = exit date.” It was his apparent objective to exploit his position to create enough personal wealth to exit Shell at the age of 35.

As far as we could tell, all confidential ideas disclosed to Lazenby from a variety of sources and subsequently adopted by Shell, were channeled to an agency called Option One, with whom Lazenby had a close private relationship. His diaries also revealed that he had an offshore bank account in the Channel Islands (Jersey).

Readers may wonder why Shell does not take action as the above statements appear to be outrageously libelous. It is because we have the evidence/proof confirming that what we say is true. Hence Shell and its army of lawyers have to put up with the dirty laundry aired here online.

RELATED ARTICLE: Irregularities in a Royal Dutch Shell tender process

NOVEMBER 8, 2011

By Gillian Tan

It’s been a year to the day since Royal Dutch Shell blindsided Australia’s largest oil and gas company Woodside Petroleum by selling down a 10% stake for A$3.3 billion (US$3.4 billion).

Appeasing Woodside, Shell promised to hold onto its remaining 24.27% interest for a year unless a takeover offer or a strategic buyer surfaced.

Given that no industry interest arose even when stock fell to a three-year low below A$30 (US$31.08), analysts believe the only way Shell can divest is to return to the market.

Apart from the fact that the stock has lost a fifth of its value since Nov. 8, 2010, the timing seems a little off too.

“There’s no liquidity in Woodside at the moment, it’s not the right environment to be dumping stock,” Macquarie analyst Adrian Wood told Deal Journal.

Wood shut down the possibility that Shell could swap its A$6.9 billion stake for equity stakes in Woodside’s various liquefied natural gas projects.

“An asset swap could have happened at any time in the past 12 months, and I think it is unlikely Woodside would give up growth projects and cancel shares given it’s the only stock in its sector that needs to justify the fact it is trading at a growth premium,” he said.

Shell — which failed in its attempt to take over Woodside in 2000 — is focusing on solidifying an Australian presence through direct interests in assets and joint ventures.

These include a 25% stake in the A$43 billion Chevron-operated Gorgon LNG project and a 50% stake in Arrow Energy, which it owns with PetroChina.

Woodside Petroleum chief executive Peter Coleman last month told reporters Shell had not flagged any urgency to sell its stake and that Woodside had offered its services to help market it.

BHP Billiton, rumored to be interested in Woodside earlier this year, instead spent US$17 billion on North American shale gas, buying assets from Chesapeake Energy and acquiring Petrohawk Energy.

For now, it seems Woodside is stuck in a classic catch-22. The very presence of Shell on the register is likely to continue weighing on the stock, but the depressed share price means Shell is unlikely to sell out.

A white knight in the form of a takeover could be its only method of rescue.

SOURCE ARTICLE

From pages 52, 53, 54 & 55 of “Royal Dutch Shell and its sustainability troubles” – Background report to the Erratum of Shell’s Annual Report 2010

The report was made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.

A toxic legacy in Curaçao

Curaçao and its oil refinery

Curaçao is an island in the southern Caribbean Sea, off the Venezuelan coast. It is a constituent country of the Kingdom of the Netherlands and has a land area of 444 square kilometres. As of January 2010, its population amounted to around 142,000 people. Prior to 10 October 2010, when the Netherlands Antilles were dissolved, Curaçao was administered as the Island Territory of Curaçao, one of five island territories of the former Netherlands Antilles.

From 1918 until 1985, Shell owned and operated the Isla oil refinery in Curaçao. During this period, the refinery has been one of the most important lifelines of Curaçao. For example, in the early fifties it employed more than 12,000 people out of the total island population of 110,000 people. The refinery generated the foreign exchange necessary to finance the imports the island could not produce itself.  In the beginning of the eighties, Shell-companies provided for 33% of the island’s Gross National Product. Apart from the refinery, Shell had a local sales company, an oil storage/transshipment company, and a shipping company on the island. Shell was very important to Curaçao, and the government of Curaçao treated Shell kindly. In 1980, a former director of Shell declared towards a reporter of the Dutch newspaper NRC: “The Antillean government? We were that government.”

Historically, the Isla refinery formed a link in the Shell-chain of Venezuelan upstream oil production and North American downstream activities. The nationalisation of Shell’s oil production in Venezuela in 1975 and a change in the U.S.-energy policy towards more independence, left the refinery with supply and demand problems. With the exception of 1979 through 1981, the refinery operated at substantial losses during the ten years before 1985. In 1975, the refinery had 2,800 employees. In 1984, there were still only 1,900 employees.

The Isla-refinery, presently still operated, is located along the Schottegat harbour, in the south of Curaçao, near the capital city Willemstad. The refinery and harbour are surrounded by residential areas.

In 1985, Shell sold its refinery and other companies/assets in Curaçao for the symbolic price of four Netherlands Antillean guilders. The buyers were the legal entities Netherlands Antilles and island territory Curaçao. Subsequently, Curaçao leased the refinery and terminals to the Venezuelan state-owned petroleum company PDVSA. Since 1985 and ongoing, PDVSA operates the refinery.

Yes, Shell created a mess

The agreement in 1985 between Shell and the Netherlands Antilles and Curaçao stated that the buyers had to abstain irrevocably and unconditionally from existing and future claims for pollution or other environmental effects exerted by Shell’s companies in the Netherlands Antilles. During 67 years of operation, Shell created a toxic legacy in Curaçao. The refining business has caused massive pollution to air, soil and water.

Evaluating the sale, ten years after

In 1996, a documentary on the environmental legacy from Shell’s operations in Curaçao was shown on Dutch television. Interviewed were: Ms. Maria Liberia Peters (prime minister of the Netherlands Antilles during the deal in 1985), Mr. Errol Cova (member for Curaçao in the negotiation team during 1985), Mr. Bart de Beer (director general affairs Shell Netherlands during 1996), Mr. R. Gonesh (a former technical supervisor for Shell Curaçao) and Mr. Edgar Leito (a former environmental chief at Shell Curaçao).

The interviewees provide some insight in why the environmental legacy had been included to the deal between Shell, The Netherlands Antilles and Curaçao:

− Mr. Cova stated that, during the negotiations, Shell had brought forward that the asphalt lake would be beneficial to Curaçao. This was confirmed by others. The discussions during the deal were never about cleaning up pollution, it was about exploitation of the lake. Later on, it turned out that the lake was too polluted, and that it was not economically justified to process it.

− Ms. Peters stated that, during the negotiations, it was thought that cheap fuel could be processed from the lake, while at that time the island used expensive fuel for water production. She also claimed that in 1985 Curaçao didn’t really have a choice to make. It could have decided to take legal action against Shell. Then it would have to close down the refinery and defy all social and economic consequences. The other choice was to keep the business going, so that the island could diversify its economy, but obviously with the risk that it might later end up with certain environmental consequences. She also stated that, in order to submit a claim against Shell, the island would have needed millions to hire expensive consultants to quantify the damage. Certainly with the perspective of refinery closure, the country could not afford such expensive consultants.

− According to Mr. Gonesh, the people on the Curaçao side of the negotiation table had not kept any records. Shell had however kept records, as a well-documented and bright company. Shell knew what it had put in the ground. It knew about the asphalt lake and the groundwater problems due to oil leaks. Mr. Gonesh took the view that Shell had handled in a criminal way, by transferring the pollution to simpletons which did not have the resources and know-how for a clean-up.

− Mr. De Beer stated that he could hardly imagine that people from Curaçao would feel cheated by the deal. In fact, Curaçao acquired the main economic engine of the island for free. Curaçao was very happy with the results of the agreement, according to De Beer. The Dutch government, which advised Curaçao, was also very happy with it. Mr. de Beer could not explain why the acid tar lake, which he thought to be originating from about the fifties, was not cleaned up earlier by Shell. According to him, it was envisaged that an incinerator would be built, after processing the asphalt lake. This incinerator could be used to burn the remains of the asphalt lake (the tar sandy mix at the bottom of the lake) and the acid tar.

Shell to be held liable?

The government of Curaçao is currently reconsidering the future of the Isla refinery. As of April 2011, the refinery is still causing severe air pollution. In December 2009, the Dutch parliament adopted a resolution, ordering an investigation on the possibilities to recover the costs associated with the remediation of the damage from, among other, Shell. In the same month, the parliament of the Netherlands Antilles adopted a similar resolution, stating that Shell should be held liable for “the serious damage caused to the earth and sea bed, groundwater, seawater and inland waters of Curaçao.” In a civil case, Shell could still be held liable for negligence at the cost of the environment and the health of people.

THE COMPLETE 73 PAGE REPORT (with reference sources)

New ways to extract oil and natural gas could buy the U.S. some time to develop renewable energy. Or they could keep us addicted to dirty fuels.

INTRODUCTION

For renewable energy, even the successes can reveal how much work remains to be done: huge amounts of hydroelectric and wind power in the Pacific Northwest sometimes threaten to overwhelm the grid. So is it good news that recent approaches to drilling have created a boom for fossil fuels?

Companies can now extract oil and natural gas from the high Arctic, shale, oil sands and deepwater wells. These fossil fuels are still finite and dwindling, but tapping the new sources pushes back the date of “peak oil.” Does that give the United States necessary time to develop sustainable energy sources, or will it keep Americans needlessly addicted to dirty fuels by keeping them cheap — and eroding the “energy security” argument?

Cheap Gas Is a Trap

Updated November 6, 2011, 07:00 PM

Matthew Kotchen is a professor of environmental economics and policy at Yale University.

New and efficient technologies for extracting oil and natural gas are increasing the supply of both fuels from North America. But the consequences will be different for oil than for natural gas. Oil is traded in a highly integrated world market, and the relatively small increases in North American oil will have virtually no effect on prices. The result is that our demand for oil will remain unaffected by the change in supply, though we may take comfort in knowing that more of the oil we use is produced closer to home.

Natural gas is a different story. The markets are far less integrated, so the increase in domestic supply will lower prices and increase demand. We will have more households switching from oil to natural gas for heating, and we will have relatively more electricity generated with natural gas than with coal. The lower prices will be a good thing for consumers paying their utility bills, and there will be health and environmental benefits because natural gas is a relatively clean fuel.

But more and cheaper natural gas does not help our prospects for bolstering renewable sources of energy, including solar, wind and biomass. History has shown repeatedly that nothing is worse for renewable energy — and the policies that support it — than cheap and abundant conventional energy. Without the urgency of high fuel prices, the United States has never sustained meaningful private and public investment in the technological innovation and deployment of renewables.

We should do our best to make sure this time is different. There has been meaningful investment — both public and private — in recent years, and despite our current economic challenges, it would be a mistake to turn back these efforts. Also, we must not throw out the baby with the bath water in response to the Solyndra bankruptcy. Instead, it is critical that we find ways to do better with the right economic incentives.

The expansion of oil and natural gas supplies in North America changes little about our long-term energy challenges. Beyond the growing demand for energy worldwide, climate change is an increasingly important and closely related problem. Conventional sources of energy generate greenhouse-gas emissions that cause global warming. While the burning of natural gas generates fewer emissions than oil and coal, its emissions are nevertheless substantial — and extraction using hydraulic fracturing raises other environmental concerns.

Renewable sources of energy provide a leading alternative, and we need a sustained commitment to improving these technologies with the aim of making them cost competitive. Indeed, it should be concerning that China is doing exactly this while we in the U.S. watch our former leadership in renewable energy continue to erode.

SOURCE ARTICLE

Debaters

RELATED

• A Reality Check on Renewables

  Amy Myers Jaffe, co-author of “Oil, Dollars, Debt and Crises”

• An Outmoded Strategy

  Peter Lehner, Natural Resources Defense Council

• Oil Isn’t Scarce. It’s Just Wasted.

  Lisa Margonelli, New America Foundation

Florida Home to Seven Air Polluters on EPA Watch List

November 7, 2011

By Trevor Aaronson and Mc Nelly Torres
Florida Center for Investigative Reporting

The Florida Center for Investigative Reporting, in partnership with the Washington, D.C.-based Center for Public Integrity, is disclosing for the first time the air polluters in the Sunshine State that have most concerned federal regulators. These sites were included on the EPA Watch List in August or September for having unresolved violations.

The other Florida sites on the Facility Watch List were the Brevard County Central Disposal Facility in Cocoa, Eager Beaver Trailers in Lake Wales, the Miami-Dade County Resource Recovery Facility in Doral, Motiva Enterprises in Tampa, Tampa Electric Company’s Big Bend Station in Apollo Beach, and Naval Air Station Jacksonville.

The seven polluters demonstrate how toothless, and at times helpless, federal, state and county regulators can be in preventing hazardous emissions from entering the air Floridians breathe.

At another Facility Watch List site in Tampa, regulators cited and fined Motiva Enterprises, a partnership between Shell Oil Company and the Saudi Arabian Oil Company, for emissions and permit violations. Located in the Port of Tampa, Motiva Enterprises stores gasoline from incoming tankers.

Motiva Enterprises’ violations resulted in two consent orders and warranted the Tampa site’s inclusion on the EPA’s Facility Watch List. Motiva Enterprises referred questions to Shell Oil spokesperson Kayla Macke.

Her response to questions about what the company is doing to curb air pollution at the facility less than 10 miles from downtown Tampa: “We will respectfully decline to comment.”

Motiva Enterprises document batch

FULL ARTICLE

By Emma Rowley

Separately, US rival ExxonMobil said quarterly earnings rose 41pc to $10.3bn as the high oil price offset falling production.

Published in the Business Section of the Telegraph on Friday 28 October 2011

By DAN JOLING, Associated Press October 4, 2011

ANCHORAGE, Alaska (AP) — Royal Dutch Shell paid the federal government $2.1 billion for petroleum leases in the Chukchi Sea off Alaska’s northwest shore. But nearly four years later, the oil giant has not been allowed to drill an exploratory well.

The company currently is in limbo as it waits for word on the 2012 drilling season.

Explaining the scenario to a pro-development crowd in a state that gets upward of 90 percent of its revenue from the oil industry can be a tough gig, the Interior Department’s No. 2 official acknowledged Thursday.

“It’s not easy being a fed in this town sometimes,” said Deputy Secretary David Hayes, a few hours after a speech in Anchorage to the Resource Development Council of Alaska.

Hayes plays a major role in deciding whether drill ships soon will appear in Arctic Ocean waters, which have outer continental shelf reserves estimated at 26.6 billion barrels of recoverable oil.

President Obama in July appointed Hayes head of a new interagency working group created to coordinate energy development in Alaska. For the first time, Hayes said, all federal agencies with a stake in the regulatory process — such as the Environmental Protection Agency, the Coast Guard, the Fish and Wildlife Service, and the new Bureau of Ocean Energy Management — are simultaneously reviewing a drilling application from their respective angles.

“It responds to complaints that have been charged against the federal government for decades, which is that the right hand doesn’t know what the left hand is doing,” Hayes said.

Standing in opposition to Arctic Ocean drilling are environmental groups and Alaska Natives who fear their ocean bounty could be fouled by a spill. They contend the federal government has no business allowing drilling in waters that are both fragile and frightening.

Arctic marine wildlife, already disrupted by warming, would be further disturbed by large-scale drilling, the groups say. The remote and inhospitable real estate makes drilling hazardous, the groups say, and the petroleum industry has not demonstrated it can effectively clean up spilled crude in ice-choked waters.

Royal Dutch Shell PLC wants to drill up to three exploratory wells in the Chukchi Sea and two in the Beaufort Sea in 2012.

One reason the company has been kept out the Chukchi was a successful lawsuit challenging the environmental work preceding the 2008 sale by the former Minerals Management Service under the Bush administration. The court, Hayes said, identified serious mistakes.

“We came in and we cured those mistakes, and the court has confirmed that. So it’s ironic to me that we were sometimes criticized here when we’re basically cleaning up issues that were left for us, and we’ve done that successfully.”

A focus now is an analysis of whether Shell’s spill response plan can do everything it promises.

“We’re looking hard at that issue, obviously,” Hayes said. “The spill response plans are central to this whole thing.”

Hayes’ boss, Interior Secretary Ken Salazar, suspended applications for Arctic drilling after the Deepwater Horizon blowout and said the department would take a guarded approach guided by science and the voices of North Slope communities.

The agencies are “extremely aware” that Shell needs a months of lead time to assemble a fleet that could accompany drill ships during the short open water season. Hayes said he could not say when a decision will be made.

“We are giving this a very high priority,” Hayes said. “I can’t give you a date because we’re in discussions with Shell. We’re working through issues. There are two sides to this transaction. There’s the government side and the Shell side, and there’s some iteration going back and forth, and it’s not fully under our control.”

Copyright © 2011 The Associated Press. All rights reserved.

SOURCE ARTICLE