Posts from ‘December, 2011’

By John Donovan

Printed below is a Texas Supreme Court judgement dated 16 December 2011 overturning, on a technicality, a jury finding that Shell Oil Company knowingly committed royalty payment fraud. Texas Supreme Court Judges have taken the view that the plaintiff family should have discovered the fraud. They concluded that the “alleged” fraud “could” have been discovered by the family through the exercise of reasonable diligence. The reversal appears to disregard the decision of the jury that Shell deliberately committed fraud.

SHELL OIL COMPANY v. ROSS

SHELL OIL COMPANY; SWEPI LP D/B/A SHELL WESTERN E&P, SUCCESSOR IN INTEREST TO SHELL WESTERN E&P, INC., Petitioners,

v.

RALPH ROSS, Respondent.

No. 10-0429.

Supreme Court of Texas.

Argued October 4, 2011.

Opinion delivered: December 16, 2011.

JUSTICE LEHRMANN delivered the opinion of the Court.

This case involves a dispute concerning alleged underpayments of gas royalty. We must decide whether limitations barred a royalty owner’s claims against the operator of the field. We hold that the fraudulent concealment doctrine does not apply to extend limitations as a matter of law when the royalty underpayments could have been discovered from readily accessible and publicly available information before the limitations period expired. When, as in this case, the information was publicly available and readily accessible to the royalty owner during the applicable time period, a royalty owner who fails to take action does not use reasonable diligence as a matter of law. It has long been the law that the discovery rule does not apply to defer the accrual of royalty owners’ claims for underpayments when the injury could have been discovered through the exercise of due diligence. Accordingly, because the parties do not dispute that the pertinent information was readily accessible and publicly available, the royalty owner’s claims are time-barred as a matter of law.

Ralph Lee Ross sued Shell Oil Company and Shell Western E&P (collectively “Shell”) for breach of contract, unjust enrichment, and fraud, based on claims that Shell underpaid royalty due under a mineral lease to Ross’s grandmother, Gertrude T. Reuss (the family is collectively referred to as “the Rosses”). We are asked to determine whether limitations barred the Rosses’ claims.

Based on jury findings that Shell fraudulently concealed its underpayments, the trial court rendered judgment for the Rosses. A divided court of appeals affirmed the trial court’s judgment. ___ S.W. 3d ___. We reverse the court of appeals’ judgment and render judgment for Shell.

I. Factual and Procedural History

In 1961, Shell entered into a mineral lease with Gertrude T. Reuss and her husband, G.T. Reuss (“Reuss Lease”). Several years later, Shell contributed parts of the land covered by the Reuss Lease to two pooled units—the Houston Unit and the Lasater Unit. In addition to the two wells Shell drilled on land covered by the Reuss Lease (“Lease Wells”), both the Houston Unit and the Lasater Unit contained a producing well located on land not covered by the Reuss Lease (“Unit Wells”). Shell paid royalty to the Rosses on both the Lease Wells and the Unit Wells. The Reuss’s son, Ralph Louis Ross, administered the Reuss Lease and became trustee of the trust that held the lease when Gertrude Reuss died in 1998. Ralph Louis Ross was a lawyer who had done oil and gas work, and thus understood the oil and gas industry. In 2002, Ralph Louis Ross assigned all rights in the Reuss Lease to his son, Ralph Lee Ross.

Under the Reuss Lease, Shell was required to pay the Rosses “one-eighth of the amount realized” by Shell for any gas or casinghead gas produced from the land. The pooling and unitization agreement split the one-eighth royalty with the State, with both the State and the Rosses receiving a one-sixteenth royalty. However, Shell did not pay the Rosses based on third-party sale prices as required by the Reuss Lease. From 1994 to 1997, Shell paid royalty based on a so-called “arbitrary price” for the Lease Wells. At trial, Shell could not explain how or why it used this price instead of the third-party sales price, and admits that it “made a mistake.”1 From 1988 to 1994, Shell used a weighted-average method calculation for the Unit Wells, averaging the third-party sales prices of Shell and other operators for sales from the Lasater and Houston Units.2

In 2002, the Rosses sued Shell for breach of contract, unjust enrichment, and fraud. They alleged that the fraudulent concealment doctrine tolled the statute of limitations because Shell “set up an elaborate scheme to allow it to [underpay] royalties, and then made multiple misrepresentations to cover up this scheme, [including] making false representations in the monthly [royalty] statements,” which the Rosses reasonably relied on. Before the case was submitted to the jury, Shell stipulated that unless it prevailed on its statute of limitations defense, the Rosses were entitled to recover damages on their claim that Shell underpaid royalty on the Lease Wells by using the so-called arbitrary price to calculate royalty. Additionally, the trial court ruled, as a matter of law, that Shell had breached the lease by using the weighted-average method to calculate royalty for the Unit Wells. The only issues sent to the jury were (1) whether Shell fraudulently concealed its failure to pay royalty in accordance with the terms of Reuss Lease and (2) the dates on which the Rosses, exercising reasonable diligence, could have discovered that Shell failed to pay royalties in accordance with the Reuss Lease. The jury found for the Rosses on the fraudulent concealment issue for both the Lease Wells and the Unit Wells.3 The Rosses were awarded actual damages of $72,532.09 plus prejudgment interest, attorney’s fees, and court costs.

The court of appeals affirmed, holding that Shell knowingly underpaid royalty and that the fraudulent concealment doctrine tolled the statute of limitations. ___ S.W.3d at ___. The majority reasoned that “the evidence presented . . . support[ed] the jury’s findings as to Shell’s fraudulent concealment of its wrongful conduct and as to when the Rosses, with the exercise of reasonable diligence, could have discovered the wrongful conduct and their claims.” Id. at ___.

II. Limitations

Shell challenges the court of appeals’ ruling that the Rosses’ claims were not barred by limitations. Shell asserts that the court of appeals erred in holding that the fraudulent concealment doctrine tolled the limitations period. We agree that the fraudulent concealment doctrine did not toll the limitations period, but this does not end our analysis. We must also consider whether the discovery rule exception to limitations applied to defer accrual of the cause of action. We consider each doctrine in turn.

A. Fraudulent Concealment

We have recognized two doctrines that may apply to extend the statute of limitations. Computer Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455-56 (Tex. 1994). The first, fraudulent concealment, is an equitable doctrine that is fact-specific. BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 67 (Tex. 2011). Fraudulent concealment tolls limitations “because a person cannot be permitted to avoid liability for his actions by deceitfully concealing wrongdoing until limitations has run.” S.V. v. R.V., 933 S.W.2d 1, 6 (Tex. 1996).

In this case, the jury found that Shell fraudulently concealed its failure to pay royalty in accordance with the Reuss Lease for the Lease Wells and the Unit Wells. The jury also found that the Rosses, exercising reasonable diligence, could not have discovered that Shell failed to pay royalty in accordance with the Reuss Lease until 2002 for the Lease Wells and until 2006 for the Unit Wells. A defendant’s concealment of wrongdoing may toll the running of limitations. Shah v. Moss, 67 S.W.3d 836, 841 (Tex. 2001). The fraudulent concealment doctrine requires that the Rosses prove Shell “actually knew a wrong occurred, had a fixed purpose to conceal the wrong, and did conceal the wrong.” Id. However, fraudulent concealment only tolls the statute of limitations until “the fraud is discovered or could have been discovered with reasonable diligence.” BP Am., 342 S.W.3d at 67.

The Rosses argue that reasonable reliance on fraudulent representations negates any duty to investigate unless and until further information comes to light which re-triggers that duty, and that they reasonably relied on the prices listed on check stubs that Shell enclosed with its monthly royalty statements since misrepresenting the price would be a violation of the Natural Resources Code. See TEX. NAT. RES. CODE § 91.502(4) (requiring each check stub to include “the price per barrel or per MCF of oil or gas sold”). We disagree. Reasonable diligence requires that owners of property interests make themselves aware of relevant information available in the public record. For example, in BP America, we held that the limitations period was not tolled as a matter of law because BP’s fraudulent misrepresentations about its good faith efforts to develop a well could have been discovered from publicly available information within the limitations period. 342 S.W.3d at 68-69. In Kerlin v. Sauceda, we held that a deed holder’s descendants who had been given notice that deeds executed by their predecessors contained royalty reservations, but had not received any royalty payments for minerals on their property, could have discovered the existence of their claims for unpaid royalties by investigating public records of case settlements and conveyances. 263 S.W.3d 920, 926 (Tex. 2008).

The Rosses did not exercise reasonable diligence and their claims are barred by limitations if readily accessible and publicly available information could have revealed Shell’s wrongdoing before the limitations period expired. They argue that additional investigation would not have led to discovery of Shell’s breach since the only way the Rosses could have discovered what Shell actually was paid for the gas was by obtaining Shell’s internal records or a confidential contract with a third-party, El Paso Natural Gas. The Rosses claim Shell would not have been forthcoming with the information and that there were no publicly-available records that would have put them on notice of their claims. Shell responds that the Rosses could have discovered Shell’s breach if they had conducted additional investigation, including asking Shell about the prices, asking the companies Shell sold the gas to the price they paid, consulting publicly available records at the Texas General Land Office (GLO), and researching the prices listed in the publicly-available El Paso Permian Basin Index.

The record in this case indicates that Shell underpaid royalty to the Rosses for years. Although the Reuss Lease required Shell to pay the Rosses “one-eighth of the amount realized” by Shell for any gas or casinghead gas produced from the land, Shell did not pay the Rosses based on the third-party sales price and instead used an arbitrary price it cannot explain for the Lease Wells and a weighted-average calculation for the Unit Wells. The prices listed on the check stubs enclosed with the monthly royalty payments were not the same as the prices Shell was being paid for the gas, which the Rosses argue is fraudulent. The Rosses claim they reasonably relied on the information provided by Shell.

However, “reliance is not reasonable when information revealing the truth could have been discovered within the limitations period.” BP Am., 342 S.W.3d at 68. Diligence is required when claimants have been “put on notice of the alleged harm of injury-causing actions.” Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 207 (Tex. 2011); see also HECI Exploration Co. v. Neel, 982 S.W.2d 881, 886 (Tex. 1998) (holding that “[r]oyalty owners cannot be oblivious” to potentially injurious activity taking place in the field). Here, the Rosses were put on notice that Shell was underpaying royalty. The large difference in the prices paid to the Rosses on the Unit Wells and on the Lease Wells triggered the Rosses’ duty to investigate the royalty payments. The Rosses received these royalty payments on the Unit Wells and the Lease Wells every month. During most months, the price paid on the Lease Wells was fifty to sixty percent higher than the price paid on the Unit Wells.4 Since the payments were based upon wells located in a common reservoir, the significant discrepancy in prices should have alerted the Rosses to potential royalty underpayments. The Rosses argue, and the court of appeals reasoned, that since different heating values could explain the differences between the royalty paid for the Unit Wells and the Lease Wells, the Rosses were under no duty to investigate the discrepancy. ___ S.W.3d at ___. But, a royalty owner cannot avoid making a diligent investigation just because there might be a legitimate explanation for a suspicious royalty payment. See Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 737 (Tex. 2001) (stating “those who receive statements listing fees charged should be alerted to the need to perform additional investigation to protect their interests” even though such fees might have a legitimate explanation).

Readily accessible and publicly available information could have led the Rosses to discover that Shell was underpaying royalty before the limitations period expired. The prices listed in the El Paso Permian Basin Index (“Index Price”), which is readily accessible to the public, would have informed the Rosses that Shell was underpaying royalty. The Index Price varies greatly from the prices Shell used to calculate and pay royalty on the wells from 1991 to 1995.5 The Index Price represents an average price, and the prices on which Shell based the Rosses’ royalty payments were routinely below that. Furthermore, researching the GLO records would have revealed the prices Shell paid to the State. Under the pooling and unitization agreement, Shell was required to pay both the State and the Rosses a one-sixteenth royalty. However, the royalty payments to the State were routinely higher than the prices paid to the Rosses. Even though the GLO records did not list the price Shell actually received for the gas, the information about the price it paid the State would have revealed that Shell was underpaying royalty to the Rosses since the Rosses were consistently paid a lower royalty than the State was. These readily accessible, publicly available documents, the GLO records and the prices listed in the El Paso Permian Basin Index, together could have led the Rosses to discover that Shell was underpaying royalty. It is undisputed that the information in the El Paso Permian Basin Index and the prices received by the State were readily accessible to the public. As a matter of law, the Rosses did not use reasonable diligence since readily accessible and publicly available information could have led to the discovery of Shell’s underpayments. Because the Rosses could have discovered Shell’s alleged fraud through the use of reasonable diligence, we hold that, as a matter of law, the doctrine of fraudulent concealment cannot apply to toll the statute of limitations.

B. Discovery Rule

The second doctrine that may apply to extend the statute of limitations in this case is the discovery rule, a “very limited exception to statutes of limitations,” which defers the accrual of the cause of action until the injury was or could have reasonably been discovered. Computer Assocs. Int’l, 918 S.W.2d at 455. The discovery rule applies “only when the nature of the plaintiff’s injury is both inherently undiscoverable and objectively verifiable.” Wagner & Brown, Ltd., 58 S.W.3d at 734. An injury is inherently undiscoverable if by its nature, it is “unlikely to be discovered within the prescribed limitations period despite due diligence.” S.V. v. R.V., 933 S.W.2d at 7. The legal question of whether an injury is inherently undiscoverable is determined on a categorical basis. Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006); Wagner & Brown, Ltd., 58 S.W.3d at 735.

In Wagner & Brown, we held that the discovery rule did not apply to defer the accrual of royalty owners’ claims for underpayments since the injury was not inherently undiscoverable because the royalty owners could have timely discovered the underpayments through the exercise of due diligence. Id. at 737. Similarly, in this case, the Rosses could have timely discovered the underpayments through the exercise of due diligence. We therefore hold that the Rosses’ claims are barred by the statute of limitations, and reverse and render judgment for Shell.

III. Conclusion

We hold that evidence conclusively established that Shell’s alleged fraud could have been discovered by the Rosses through the exercise of reasonable diligence. Accordingly, we reverse the court of appeals’ judgment and render judgment for Shell.

Footnotes

1. Shell suggests that the “arbitrary price” may have been a computer glitch or an accounting error.

2. Shell contests that its use of the weighted-average method for the Unit Wells was a breach of the Reuss Lease, but does not contest that its use of the “arbitrary price” for the Lease Wells was a breach.

3. Specifically, the jury found that the Rosses could have, with the exercise of reasonable diligence, discovered the underpayments on the Lease Wells in 2006 and the Unit Wells in 2002.

4. In one month, the price paid on the Lease Wells was ninety-three percent greater than the price paid on the Houston Unit Well.

5. Although the prices listed in the El Paso Permian Basin Index are stated on a heat-adjusted, MMBTU Basis, and the royalty statement prices are stated on a volumetric, MCF basis, the difference between the prices is too large to be explained by heat prices alone, as the index prices were often between seventy-five and one hundred percent higher than the prices Shell paid the Rosses.

On 12th October 2010, I published an article containing the warning: “…it is only a matter of time before the culture of subterfuge and deception at Wikipedia results in a scandal.” My prediction has come to pass…

By John Donovan

Jimmy Wales is to be congratulated on being the joint founder of Wikipedia and for the non-profit basis on which the organization is operated. He is obviously a man of integrity deserving of the highest praise.

Unfortunately, many contributors to Wikipedia do not share his high ethical standards and take full advantage of the fact that it is possible to edit Wikipedia corporate articles completely anonymously for financial reward, removing or suppressing negative information. Parties can completely hide any trace of their identity and motive, even their ISP addresses.

The cloaked editing is completely at odds with a claim attributed to Jimmy Wales in November 2009 that: “We have an ongoing trend towards openness – which is getting more open.”

Editors of non corporate articles are individuals attracted out of genuine interest, often with expertise in the particular subject. It is a completely different matter when corporate articles are surreptitiously modified by employees of a featured corporation, or by specialists supplying an online reputation clean-up service to the corporation. There are numerous firms offering this service.

Because of the huge popularity of Wikipedia, the content of a Wikipedia article about a business is important because it can have a positive or negative impact on the reputation of the business. This in turn can impact on its value.

Like countless millions of people, I use Wikipedia on a daily basis. It is a great free resource. It is however deeply flawed in relation to articles that have a commercial connotation. Money really is the root of all evil. The editing of such articles is mired in widespread deception, trickery and cowardly tactics.

There are Wikipedia articles about every major business.  Under Wikipedia rules, a company is not permitted to edit any Wikipedia articles about itself. Royal Dutch Shell for example is supposedly not allowed to edit Wikipedia articles about itself, but as will be seen, has engaged in all manner of skullduggery in relation to its online reputation.

There is no reason to think that Shell is alone in such activity and every reason to believe that such underhand practices are in fact epidemic. There is information freely available on the Internet providing a blueprint of how to infiltrate Wikipedia utilizing the policy which permits concealment of identity and background. It advises on a stratagem of deception to disguise true intent. This includes editing a wide range of articles to avoid being identified as a one topic contributor.  It discusses implications relating to IP addresses. The objective being for an organized group of infiltrators to edit target articles without detection.  I will not go into detail for obvious reasons.

Wikipedians who choose to openly disclose their identity and background as editors are at a huge disadvantage to the vast majority who hide behind a pseudonym. Such individuals can be very unpleasant. Because identities are concealed, it is not practical for anyone editing under their own name to take legal action in the event of defamatory comments being made against them on Wikipedia by an anonymous party.

Although Wikipedia etiquette requires editors/contributors to act in a civil way towards one another when discussing issues which inevitable arise, the fact that people can hide behind an alias means that they sometimes adopt a dictatorial aggressive and even bullying tone that they would never use under their real name.

On 12 October 2010, I published an article (extracts included herein) containing the warning: “…it is only a matter of time before the culture of subterfuge and deception at Wikipedia results in a scandal.”

This is the complete paragraph:

Commonsense suggests that anyone who wishes to edit a Wikipedia article in which monetary considerations are involved should be compelled to disclose their identity and background so that the information can be exposed to public scrutiny. Otherwise it is only a matter of time before the culture of subterfuge and deception at Wikipedia results in a scandal.

My prediction has come to pass in a recent blaze of publicity about the “dark arts’ practiced by PR firm Bell Pottinger, partly in relation to Wikipedia articles.

The following is an extract from a current article headlined: “PR Firm Rewrites Clients’ Wikipedia Entries“

So much for reliable Wikipedia content. A high-powered British PR firm routinely rewrites Wikipedia content relating to its clients, reports the Independent. Bell Pottinger made hundreds of changes in Wiki entries over the last year, either adding positive comments or deleting negative ones about clients. At least ten contributing writer accounts linked to the firm have been suspended by Wikipedia co-founder Jimmy Wales, who blasted the firm’s “ethical blindness,” reports the Financial Times. Undercover reporters for the British Bureau of Investigative Journalism posing as clients were told by representatives of the PR firms that “sorting” Wikipedia entries is part of the service the company offers, notes the newspaper.

Removal of negative information means that the public, including current and potential shareholders, are presented with incomplete, censored information, providing a distorted picture of a featured company.

Within hours of publishing my prediction, I was contacted by the founder of “MyWikiBiz“.

This is a quote from what he said:

As the founder of MyWikiBiz, I am someone who has, and continues to, manipulate information in Wikipedia on behalf of paying clients. Call it dirty work, but for the most part, I think the way the Wikimedia Foundation is scamming the public about how it is (not) governing the world’s “knowledge” is a far worse state of affairs.

My own comments are based on my experience over several years of originating and editing Wikipedia articles relating primarily to Royal Dutch Shell. It is obvious from moves made by Shell that the oil giant attaches great value to its online reputation:

• Shell appointed a specialist agency to carry out a makeover of Shell’s online reputation.
• Shell was obsessed by my editing of Wikipedia articles relating to the company and wanted to edit the articles itself, but was concerned about being caught.
• Shell employees were caught doing so from Shell premise.
• Shell secretly censored postings made on its own Internet forum set up on the basis of inviting “open and transparent dialogue”.
• Eight Royal Dutch Shell Group companies buried a Shell whistle blower in injunctions following postings of revelations and leaked Shell internal documents on our website, some relating to the reserves fraud.
  
• Shell has made attacks on a website I edit (see below), attempting to seize the domain name and close the website down.
  

Details are printed below under the heading: “ROYAL DUTCH SHELL & THE INTERNET”.

I always edit using my own name when contributing to any website, including Wikipedia, where I declared at the outset my long and sometimes acrimonious relationship with Shell. With my almost 95 year old father, Alfred Donovan, I operate a website - royaldutchshellplc.com – focused on Royal Dutch Shell. It has achieved some measure of success in holding the company to account.

It is a completely non commercial website with no advertising. Unlike Wikipedia, we do not solicit or accept donations, declining for example to accept funding from a Russian source at the time of our intervention in the Sakhalin Energy project that cost Shell its majority stake in the venture. (See Nikkei BP article sub-heading: “The fate of Sakhalin 2 was changed by two British men“)

I am aware of the difference between writing a blog on my own website and making edits on Wikipedia. I have always strived to operate within Wikipedia guidelines. This includes ensuring that information added is neutral, accurate, and can be verified by reference to cited independent reputable sources. In other words accurate verifiable information written without bias on the part of the editor.

Wikipedia articles are supposedly written by open and transparent consensus. In reality, as I have indicated, Wikipedia is built on a platform of secrecy and concealment which leaves articles wide open to censorship and manipulation by anonymous parties, with commercially driven motives.

Unpaid volunteers who act as administrators and editors are supposedly the bedrock on which Wikipedia has been built. It is a mostly-secretive community in which the vast majority of volunteers edit using aliases and are free to edit any articles, without anyone having a clue about who they are and what their background is. Thus it is impossible to determine if they have a potential conflict of interest.

Editors using aliases are able to comment on the editing work of other contributors (including those editing on a full disclosure basis) and vote on the deletion of Wikipedia articles.

Consequently this cloaked army has power and influence, but no realistic accountability. If, due to some transgression, a Wikipedian is banned from editing (as I am for threatening libel proceedings) they can return under a new alias using a new IP address, with no bad odor attached. In other words, a completely fresh start.

The strange “Wikipedian” culture has some similarity to the Ku Klux Klan (fortunately without the racist element) but is actually more secretive.  The privacy of those choosing to keep secret all information about who they are is maintained within the Wikipedia community, which is even developing its own unique language, partly in response to skulduggery by some editors.

NO ADEQUATE DISCLAIMER

Since Wikipedia corporate articles are wide-open to whitewashing and many have been surreptitiously whitewashed, all should carry a prominent disclaimer stating that they should not be replied upon in making financial decisions. The current notice of disclaimer is the last but one word in the small print at the foot of each article. It is a link to a general disclaimer with a headline:

“WIKIPEDIA MAKES NO GUARANTEE OF VALIDITY”.

The explanation for the disclaimer states:

“The content of any given article may recently have been changed, vandalized or altered by someone whose opinion does not correspond with the state of knowledge in the relevant fields.”

There is however no reference to the surreptitious removal of negative information from corporate articles by corporations or their paid agents, which is the subject of my comments.

Despite knowledge of the systematic laundering of corporate articles, Wikipedia has not placed a prominent warning on each corporate article, nor has it taken adequate measures to properly protect the integrity of the published information.

I am not a lawyer, but under the circumstances, if I was working for Wikipedia, I would be concerned at the possibility of class action law suits against Wikipedia by parties who have purchased shares based on such misleading/incomplete information published by Wikipedia.

As a result of the strenuous efforts by dedicated people, information about Royal Dutch Shell on Wikipedia has been transformed. Negative accurate information supported by newspaper articles, government agency publications, court documents etc has vanished. Instead there is just a collection of sanitized propaganda about Royal Dutch Shell Plc. Most of which looks like it could have originated from Shell’s PR/Media Department.

ROYAL DUTCH SHELL AND THE INTERNET

I first raised suspicions of such underhand editing and manipulation in an article I published in October 2007.  The article contained reference to a section I had inserted in a Royal Dutch Shell article Wikipedia article – “Wiki-face lift for Shell” – revealing the secret editing by Shell employees.

We publish our own carefully researched articles about Shell e.g. “How Royal Dutch Shell saved Hitler and the Nazi Party”. Our activities have attracted media attention. Prospect Magazine, The Sunday Times, and The Guardian, have all published major articles about us: “Rise of the Gripe Site”;“Two men and a website mount vendetta against Shell’ and “92-year-old’s website leaves oil giant Shell-shocked”.

Shell management has for many years taken a great interest in our activities, particular in relation to the Internet.

The was obvious from a Press Release about my father and I issued by Shell Media Relations in March 1995.  Shell was concerned about its online reputation even at that early stage.

In 2005, Shell issued proceedings attempting to seize a number of Shell related gripe site domain names from us, including royaldutchshellplc.com, but lost the case.

A more recent indication of Shell’s concern came in June 2006, when Shell appointed a digital agency with experience in turning around corporate reputations. The headline is self-explanatory: “Shell seeks agency for online makeover“. The brief issued by Shell web communications division in The Hague, included content strategy, website editorial and online branding.

Our related article: “The Internet battleground for Shell’s reputation” is also relevant. In the article, we made plain our suspicions about underhand activity by Shell, in reaction to a critical posting about Shell on our website originating from a Shell whistleblower, Dr John Huong. Shell lawyers buried him in multiple injunctions collectively obtained by eight different Royal Dutch Shell companies from the UK, the Netherlands and Asia. Shell even sought his imprisonment.

The degree of Shell interest in my editing of Wikipedia articles became shockingly apparent after we made a series of subject access requests to Shell under the UK Data Protection Act. It is fair to say given the content of the numerous internal communications on the subject, that Shell was obsessed by my editing of Wikipedia articles about Royal Dutch Shell.

Links to relevant Shell internal communications and documents are printed at the foot of this article. As can be seen in the documents, Shell was trying to figure out how it could edit my contributions to the articles without being caught. Concern was expressed about this prospect.

WikiScanner

In April 2008, I published a discussion from our Live Chat facility revealing that WikiScanner had detected that Wikipedia articles relating to Royal Dutch Shell had been anonymously edited from Shell premises. According to a posted comment “Information critical of Shell was systematically removed”.

An allegation was also made about an alleged “Shell dirty tricks unit” busy trying to smother our website. That allegation proved to be true. Shell had set up a counter-measures team and did surreptitiously, briefly close it down. Shell internal documents I also revealed that Shell had mounted a global spying operation as part of the counter-measures.

DON’T TELL SHELL

Shell was even caught secretly censoring postings on “Tell Shell”, its own innovative online forum inviting “open and transparent dialogue” and “lively debate” allowing Shell to “respond to public concerns and criticism in an open and transparent way.” In August 2005, Shell was caught secretly censoring the forum.  In October 2005, we drew public attention to the “slow death” of the forum. In November 2005, Shell suspended the forum but promised that it would return “shortly” and previous debates would still be available to view. Despite the pledges, “Tell Shell” and the related archive vanished from the internet. In an email dated 11 November 2005, Shell General Counsel Richard Wiseman confirmed that Shell had indeed censored the forum. He sent copies of his email to Royal Dutch Shell CEO Jeroen van der Veer and his executive director colleague, Malcolm Brinded.

LINKS TO SHELL INTERNAL EMAILS & DOCS IN WHICH ROYAL DUTCH SHELL WIKIPEDIA ARTICLES ARE MENTIONED IN RELATION TO JOHN DONOVAN

1 March 2007
2 March 2007 16:13 & 18.56 Plus 3 March 18:01
2 March 2007 16:51
19 March 2007 18.43 20 March 2007 8:10
23 March 2007
6 June 2007 12:51
SUNDAY 29 July 2007 11:31 & 30 July 2007 8:19 AM
30 July 2007 22:38 & 7 August 2007 14.24
31 August 2007 16:17
12 October 2007 15:21 & 15:58
16 October 2007
26 December 2007
19 February 2008 4 Pages
4 April 2008
9 March 2009
8 April 2009
8 July 2009
18 December 2009 11.34:
18 December 2009 12.07
Shell Focal Point document “Donovan Campaign Against Shell”

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At least four people have died and 49 are still missing after an oil rig overturned in the Sea of Okhotsk in the Russian Far East, the regional emergencies service reported on Sunday.

The Kolskaya drilling rig with 67 people aboard was being towed in a severe storm, when it overturned and sank some 200 km (125 miles) off Russia’s Sakhalin Island early on Sunday.

Fourteen people have been rescued, the emergencies service said.

Russia’s Transport Ministry told Prime news agency that “of the 67 people aboard the Kolskaya rig, 53 are crewmembers and 14 are workers and support staff.”

The drilling rig belongs to the Arktikmorneftegazrazvedka exploration company, which carried out work under a contract with energy giant Gazprom.

The drilling rig, which can take up to 102 people on board, was built in 1985 in Finland. The rig started its operations in September to drill and test the Pervoocherednaya well on the West-Kamchatka licensed block of the Okhotsk Sea shelf.

The rig, which is 69 meters long and 80 meters wide, was intended to drill a well at a depth of 3,500 meters.

A Gazprom spokesman said that the rig had fulfilled its works for Gazprom by the time of the accident and was heading for its base.

Investigators have said they are considering the rig’s tow in disregard of a severe storm as the most likely reason for the accident.

The regional emergencies service has said the accident poses no threat to the environment.

“Fuel stocks at the Kolskaya drilling rig are minimal and are stored in hermetically sealed tanks, and there is no danger of a fuel spill,” the service said.

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Shell also seeks oil deal with Libyan NATO-rebels.

From: New Energy Times Blog
By Steven B. Krivit

Royal Dutch Shell, plc, one of the largest energy companies in the world, is interested in exploring low-energy nuclear reaction research as a possible game-changer in the energy business.

Two Shell scientists, Anitha Sarkar and Gilles Buchs, with the backing of the Shell GameChanger program, are looking for opportunities to work actively with Low Energy Nuclear Reactions (LENR) experts, according to a brief introduction the researchers prepared.

Edward Beardsworth, a venture capitalist at Jane Capital Partners in San Francisco, introduced the researchers to the field in a message to the CMNS e-mail list today.

“At my request, they prepared the attached biographical sketches and description of what they bring to the group. They are both located at the company’s research and development offices in the Netherlands,” Beardsworth wrote. “I believe their fresh and enthusiastic approach will lead to good contributions to the field.”

According to its Web site, Shell GameChanger “helps move ideas to reality by sponsoring entrepreneurs to develop their ideas into a product that can be introduced to the marketplace.”

“Specifically,” the site says, “we look for innovative ideas that address a demand or significant problem in the energy industry and have the potential to change the game.”

The Shell researchers, according to the document provided by Beardsworth, offer the following to the field:

• Broad expertise in wide variety of energy conversion systemsAccess to significant group of Shell surface science and catalysis experts

• Access to key related disciplines: thermodynamics, physics, electrochemistry, computational chemistry,   heat exchange, etc.

• Shell GameChanger program, (www.shell.com/gamechanger) rapidly funds initial proof of concept testing for revolutionary innovation

• Significant expertise and track record of development and scaling-up and from lab-scale to commercial unit of a wide range of complex energy technologies.

This is not the first time Shell has looked into LENR research. In 1995, Shell sponsored LENR research at the French laboratory Laboratoire des Sciences Nucléaires at the Conservatoire National des Arts et Métiers (CNAM). This research showed high-quality LENR work, and the research paper provided the expected level of professionalism in a scientific communication.

The researchers found a small ratio of excess heat compared to the input electrical power in both light- and heavy-hydrogen experiments. However, the experiments demonstrated a sustained period of steady excess-heat production. The hydrogen experiment produced 16 megajoules during a 39-day run, with a mean excess-heat production of 4.7 Watts from a 150 Watt electrical input.

Consistent with the extensive body of LENR research, the CNAM researchers found no significant levels of dangerous radiation from neutrons, X-rays or gamma rays. The researchers failed to find nuclear signatures consistent with the amount of excess energy produced. They did not, however, check for isotopic shifts or transmutations, and they did not use solid-state nuclear track detectors to look for alphas or bursts of spallation neutrons.

The current Shell initiative follows an inquiry from the United States intelligence community into LENR. Both news items are powerful indicators that 2012 is the year that LENR will move forward into serious technology research.

After publishing this article, the author has received the following email from above mentioned Edward Beardsworth:

REPLY

Steven B. Krivit says:

NOTE: Royal Dutch Shell Plc also aims to restart exploration in Libya, whose so-called new government (a bunch of NATO-led rebels who came to power through only violence and aren’t chosen or wanted by the Libyan people) says to “seek to stabilize relations with foreign companies.”

Shell head Peter Voser said in Doha, Qatar, on December 6 that the company, together with BP Plc, “evaluates resumption of drilling at wells.”

Libya is the holder of Africa’s biggest oil reserves. Under Jamahiriya government, a portion of every Libyan oil sale was credited directly to the bank accounts of all Libyan citizens. Now the illegal NATO-rebel government seeks to steal the benefits of the oil production (a 1.6 million barrels) from the Libyan people in an attempt to solve the immense problems of the bankrupt Western countries.

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(Reuters) – The U.S. Bureau of Ocean Energy Management on Friday conditionally approved Shell Gulf of Mexico Inc’s revised plan to drill six oil exploration wells in the Chukchi Sea offshore of Alaska next year, the agency said in a news release.

The conditional approval does not authorize drilling to start. Shell Gulf of Mexico, a unit of Royal Dutch Shell, must obtain separate drilling permits for each well.

BOEM’s approval also requires the company to undertake a range of safety and environmental protection measures prior to starting work, including winning approval of its well capping and containment system and its oil spill response plan.

The conditional approval seeks to mitigate the risk of an end-of-season spill by requiring cessation of drilling 38 days before the annual onset of sea ice, typically November 1, to allow time for blowout control and cleanup in the event of an accident.

“We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed,” BOEM Director Tommy Beaudreau said.

Environmental advocacy groups including the Natural Resources Defense Council, the Sierra Club and a number of Alaska-based groups issued a joint statement decrying BOEM’s “reckless” decision.

“There is no proven way to clean up an oil spill in the Arctic’s extreme conditions and there is a significant dearth of scientific information, making it impossible to understand the impact of Shell’s activities,” the groups’ statement said.

Shell issued a statement welcoming the BOEM decision, but expressing caution about the provision limiting the Chukchi drilling season.

“We are concerned that this unwarranted restriction could severely impact our ability to deliver a complete Chukchi program,” Shell’s statement said.

“Shell remains committed to employing world-class technology and experience to ensure the delivery of a safe, environmentally responsible Arctic exploration program,” Shell said.

(Reporting by Bruce Nichols; editing by Andrea Evans)

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December 16, 2011, 5:06 PM EST

By Jim Snyder

Dec. 16 (Bloomberg) — Royal Dutch Shell Plc won conditional U.S. approval for a plan to drill as many as six exploration wells in Alaska’s Chukchi Sea next year, the Bureau of Ocean Energy Management said.

Final approval requires Shell to meet safety and environmental-protection measures, according to an e-mailed statement today from the Interior Department bureau. Shell will have to stop drilling 38 days before ice appears in the Arctic, to avoid an end-of-the season spill when cleanup is difficult, the agency said. The U.S. projects ice will form by Nov. 1.

“We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed on its exploration plan,” Tommy Beaudreau, bureau director, said in the statement.

Shell, which has invested about $4 billion in the Arctic leases since 2005, hasn’t drilled any wells in the region while opponents won delays with appeals and lawsuits. Environmental organizations and Alaskan native groups have said it would take too long for equipment to reach the remote and icy region during an oil spill.

Shell acquired its leases to the Chukchi Sea in 2008.

The Interior Department’s Bureau of Safety and Environmental Enforcement must approve Shell’s oil-spill response plan before drilling can start, according to the statement.

The company needs permits from the Environmental Protection Agency, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service, according to the statement.

–With assistance from Katarzyna Klimasinska in Washington. Editors: Steve Geimann, Larry Liebert

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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December 16, 2011, 3:11 PM EST

By Paul Burkhardt

Dec. 16 (Bloomberg) — Gulf Coast gasoline rose for a fifth straight session as Royal Dutch Shell Plc and Delek US Holdings Inc. reported refinery problems in Texas and Louisiana.

Shell reported an “operations upset” at the Norco, Louisiana, refinery when furnaces were swapped yesterday, according to a filing with the National Response Center. Delek had emissions at its Tyler, Texas, plant, according to a filing with state regulators.

Conventional, 87-octane gasoline’s discount on the Gulf Coast narrowed 0.50 cent to 3.75 cents a gallon versus futures on the New York Mercantile Exchange at 2:41 p.m., according to data compiled by Bloomberg. It’s the highest level since Nov. 9. Prompt delivery rose 0.93 cents to $2.4545 a gallon.

Sunoco Inc. shut a hydrotreater at its Philadelphia refinery for maintenance, according to a person familiar with operations at the plant. The work on Unit 859, a distillate hydrotreater, is unplanned, said the person, who declined to be identified because the person is not authorized to speak for the refinery.

The premium for ultra-low-sulfur diesel in New York Harbor slipped 0.12 cent to 2.88 cents a gallon versus heating oil futures traded on the New York Mercantile Exchange at 1:56 p.m. The differential rose 1 cent a gallon yesterday.

–With assistance from Paul Gordon in Hong Kong. Editors: Margot Habiby, Charlotte Porter

To contact the reporter on this story: Paul Burkhardt in New York at pburkhardt@bloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

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By Paul Burkhardt

Dec. 16, 2011 (Bloomberg) — Royal Dutch Shell Plc plans to seek binding commitments to transport oil on its proposed Westward Ho pipeline after receiving enough interest from shippers, the company said in a statement.

Shell plans to conduct an open season for commitments in early 2012 to ship on the 30-inch line that would run from St. James, Louisiana, to the Port Neches/Nederland, Texas, area, the company said.

The Westward Ho line, which would ship around 600,000 barrels a day, may be completed and commissioned by early 2015, according to Shell.

–Editors: David Marino, Charlotte Porter

To contact the reporter on this story: Paul Burkhardt in New York at pburkhardt@bloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

SOURCE ARTICLE

By Lisa Demer, McClatchy Newspapers December 16, 2011 11:05 AM

NEW ORLEANS — Standing in front of a brightly coloured, 3-D image of the geology far below the floor of the Chukchi Sea, Steve Phelps pointed to the “giant opportunity” that has prompted Shell to pour billions of dollars into the Alaska Arctic.

“Burger — that’s the name you are going to get to know,” Phelps recently told reporters gathered here to learn about the huge oil company’s plans and promises for Alaska.

Phelps is Shell’s Alaska exploration manager, a geologist whose job it is to find big oil. The Burger field, part of a Shell naming theme that revolved around junk food, has been eyed by various oil companies for years. But it’s more than 110 kilometres offshore in the Chukchi Sea — between Siberia and the northwest coast of Alaska — and until recently was thought to be too expensive to develop. Now Shell — for the second time — holds the leases.

Armed with promising new seismic science, a sort of undersea sonogram of the Earth’s belly, the Dutch company says Burger is a signature find. It’s the spark for ramping up controversial efforts to drill off the northernmost coast of the U.S. in some of the most extreme conditions on Earth.

“This is the stuff that most of the world was finding in the 1930s, the 1950s, the 1960s, in places like Saudi Arabia and the Middle East, Nigeria,” Phelps said. “This one potential resource far outweighs any single field we’ve got in the Americas’ portfolio.”

More than in the Gulf of Mexico, where drilling rigs checker the ocean and Shell led the way into deepwater zones that produce more oil than anyone predicted.

More than in Brazil, where Shell is the second-biggest oil producer after the state energy company.

More than in Canada, where Shell is investing billions to extract thick, sticky crude from tarsands.

As a result, Shell is at the centre of a classic Alaska development battle, gearing up to explore for oil as it confronts ever-higher regulatory hurdles and court challenges by environmentalists who say a big Arctic oil spill would be a disaster.

So far, Shell has spent nearly $4 billion on leases, groundwork and specialized equipment, including a new icebreaker being built in Louisiana.

At stake are billions in oil income and the reputation of a corporation that promotes a culture of safety but has been tarnished by troubles overseas.

In a sense, Shell is an old Alaska hand. Back in the 1960s, the company was the first to produce oil in Cook Inlet waters, where it had to engineer platforms able to withstand harsh winters and severe tides. Some of those platforms still produce today. But Shell sold those interests in the late 1990s, after their heyday.

Shell was an early explorer off Alaska’s northern coast in the Arctic, but walked away from those leases in the 1990s. The company missed out on Prudhoe Bay, the most productive oilfield in the U.S.

So to many Alaskans today, Shell is an unknown quantity.

What can Alaskans expect from Royal Dutch Shell? After more than 100 years of oil exploration around the world, what is its reputation and record?

Technology has advanced over the decades to lessen the risk of drilling in the Arctic, Shell scientists say. And, they say, blowouts are unlikely here.

“The Arctic wells are really straightforward wells with few challenges on executing them,” said Williams, the chief well scientist for Shell. “They are in shallow water. They are at low pressure, and they have what we call a margin. It gives you a lot of room to operate.”

The Associated Press December 15, 2011, 5:46PM ET

By DAN JOLING

ANCHORAGE, Alaska

Pollution emitted from drilling ships and support vessels in Arctic waters would be regulated by the Interior Department instead of the Environmental Protection Agency under language inserted into a spending bill by U.S. Sen. Lisa Murkowski.

The Alaska Republican announced the move Thursday and said it will address systemic problems in the EPA permitting process for offshore oil and natural gas exploration.

A subsidiary of Royal Dutch Shell hopes to drill exploratory wells in the Chukchi and Beaufort seas next summer on leases purchased in 2008. Shell’s drilling has been thwarted so far by challenges that include appeals of air permits granted by the EPA.

Murkowski said in her announcement that the language inserted into the spending bill is one of the most important steps Congress can take to ensure that responsible development is allowed to go forward in the Beaufort and Chukchi seas. Shell, Murkowski said, has invested $4 billion in preparing for Arctic exploratory drilling and has waited more than five years for valid EPA operating permits.

The Interior Department, she said, processes air permits within months.

“Transferring air quality authority from the EPA to Interior could place Alaska’s Arctic leases on a level playing field with the Gulf of Mexico and provide a level of predictability — without compromising environmental protections — for those companies willing to invest in the production of America’s energy,” she said in a prepared statement.

A Murkowski spokesman said the language was not intended only to help Shell but also other companies that want to drill on Alaska’s outer continental shelf.

“The EPA process is broken, is Sen. Murkowski’s point,” Robert Dillon told The Associated Press by phone from Washington, D.C.

Colin O’Brien, an attorney for environmental law firm Earthjustice, which is representing Alaska Native and conservation groups in an appeal of Shell’s latest EPA air permit, said there have been other attempts to limit the agency but not to shift its authority wholesale to the Interior Department.

“This is a brazen giveaway to Big Oil that ignores the impact of Arctic oil and gas activities to the detriment of nearby communities and the environment,” he said from Juneau.

Interior’s regulations do not address air pollution at the source and excludes support vessels that may account for 96 percent of an operation’s emissions, he said.

“From start to finish, there’s less analysis, less control, and Clean Air Act protections are almost completely eviscerated,” he said.

Rebecca Noblin, an attorney for the Center for Biological Diversity in Anchorage, said by e-mail that Murkowski’s tactic will significantly decrease oversight of air emissions.

“The fact is, Senator Murkowski is upset that the EPA actually requires Shell to comply with the Clean Air Act,” Noblin said. “What she dubs `streamlining’ is no more than an attempt to put air permitting in the hands of a department known for rubber stamping dangerous drilling projects. Our senator would rather pollute Alaska’s air and threaten our health than say no to the oil companies.”

The issue for Shell is not the process, she said, but following the law.

“If they just complied with the Clean Air Act, they would get their Clean Air Act permits,” she said.

Shell Alaska spokesman Curtis Smith said the company has worked closely with the EPA on its air permits and believes they will be validated by the appeals board. He accused organizations such as Noblin’s of leaning on hyperbole and misstatements to make a case against Arctic drilling.

“Not only do Shell’s proposed air emissions meet the Arctic standard, we are setting the bar,” he said in a statement. “Shell has committed hundreds-of-millions of dollars to modifying exhaust systems on both drill ships and committed to use ultra-low sulfur fuel on our support vessels. We stand by the EPA’s expert conclusion that our operations will not adversely impact the local air shed or local stakeholders.”

Dillon said the oversight change language is in both an omnibus spending bill and stand-alone House appropriations bill and still must be approved by the Senate.

The other two members of the Alaska congressional delegation issued statements lauding the proposed change.

“This is a game changer for development in the Arctic,” said Rep. Don Young. He said he had worked with colleagues on the same issue.

“After over five years of waiting on air permits and seeing billions of dollars spent while waiting on permits, I am as confident as ever that we will finally see production taking place in both the Beaufort and Chukchi seas.”

Sen. Mark Begich, D-Alaska, said he had pushed for the change with the White House and the Senate Democratic leadership.

“This is an issue of fairness and is long-overdue,” Begich said. “Companies with projects in the Arctic are at a competitive disadvantage under the EPA. It’s time to move all air permitting under the Interior Department.”

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