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An oilman’s $7 billion refresher course in the economics of drilling and climate change

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To many analysts, it looked like Odum was pushed into leaving.

Steven Mufson March 11, 2016

Marvin Odum, president of Shell Oil, was attending a meeting of the parent company’s executive committee in Singapore when word trickled in that an exploration well drilled in Alaska’s Chukchi Sea — the crowning step in a multi-year $7 billion quest — was a dry hole.

Maybe not bone dry. In a recent interview, Odum wouldn’t say. But in the oil business glossary, a dry hole is one that can’t pay off commercially, and Shell’s hole definitely qualified. The parent company, Royal Dutch Shell, abruptly dropped any further drilling — a setback for the industry, though a relief for environmentalists.

For years, they had fought a vigorous, litigious and politically intense battle over the Chukchi. Meanwhile Shell, lured by potentially rich rewards, had overcome a couple of embarrassing rig mishaps at sea and patiently navigated the courts and the Obama administration’s permitting process. Now, geology had rendered its verdict.

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Shell’s big gamble: Oil wrangling at the far reaches of the Arctic frontier

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By Steven Mufson September 11

Shell Oil Co.’s president Marvin Odum made the trip on Sept. 2 from Houston to this northern-most town in the United States, a spot whose traditional name, Ukpeagvik, means “place where snowy owls are hunted.”

Odum is here hunting, too, for oil offshore and political support from Alaska Natives living in Barrow, a ramshackle town of muddy streets, littered with all-terrain vehicles and guarded by snow fences on one side and on the other a four-foot-high earthen berm to protect against high winds and seas.

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Concerns mount over whale deaths in Gulf of Alaska

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Ryan Schuessler: August 24 

KODIAK, Alaska – Researchers are scrambling to determine what’s behind the death of 30 whales in the Gulf of Alaska as unusually warm ocean temperatures continue to wreak havoc on the region.

Since May 2015, 14 fin whales, 11 humpback whales, one gray whale and four unidentified specimens have been found dead along shorelines in the Gulf of Alaska, nearly half of them in the Kodiak Archipelago. Other dead whales have been reported off the coast of British Columbia, including four humpbacks and one sperm whale.

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Big Oil seems to be acting like Big Tobacco

Article by Sheldon Whitehouse published Sunday 31 May 2015 by The Washington Post/Associated Press

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Fossil fuel companies and their allies are funding a massive and sophisticated campaign to mislead the American people about the environmental harm caused by carbon pollution. 

Their activities are often compared to those of Big Tobacco denying the health dangers of smoking. Big Tobacco’s denial scheme was ultimately found by a federal judge to have amounted to a racketeering enterprise.

The Big Tobacco playbook looked something like this: (1) pay scientists to produce studies defending your product; (2) develop an intricate web of PR experts and front groups to spread doubt about the real science; (3) relentlessly attack your opponents.

Thankfully, the government had a playbook, too: the Racketeer Influenced and Corrupt Organizations Act, or RICO. In 1999, the Justice Department filed a civil RICO lawsuit against the major tobacco companies and their associated industry groups, alleging that the companies “engaged in and executed — and continue to engage in and execute — a massive 50-year scheme to defraud the public, including consumers of cigarettes, in violation of RICO.”

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Oil drilling on US Arctic coast put on ice

Screen Shot 2013-01-11 at 20.09.51 Oil companies’ rush to find reserves off Alaska’s Arctic shores suffered a setback on Thursday after Shell said it would suspend its operations in the region — and possibly withdraw for good. “We will not drill in Alaska in 2014, and we are reviewing our options there,” Shell CEO Ben van Beurden told reporters in London. “The group’s exploration near the North Pole cost billions of dollars and generated reams of negative press – yet not a single drop of oil has been pumped” said Garry White, Chief Investment Correspondent at British brokerage Charles Stanley.

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By Associated Press, Updated: Thursday, January 30, 2:57 PM

AMSTERDAM — Oil companies’ rush to find reserves off Alaska’s Arctic shores suffered a setback on Thursday after Shell said it would suspend its operations in the region — and possibly withdraw for good.Royal Dutch Shell PLC is the main company to have purchased leases for oilfields off Alaska’s Arctic shores, but its attempts to drill have been halting due to technical and legal hurdles.While other companies are still seeking to exploit deep-water Arctic fields nearby in Canada, Shell’s troubles may indicate that the difficulties outweigh the potential economic benefits.“We will not drill in Alaska in 2014, and we are reviewing our options there,” Shell CEO Ben van Beurden told reporters in London.Shell received a negative Federal court decision last week. Environmentalists are still challenging whether the government’s 2008 decision to open the area to exploration was correctly granted in the first place: it is covered by sea ice for much of the year.

Asked whether Thursday’s retreat means the project is finished, Van Beurden said that depends in part on how the ongoing lawsuit proceeds.

Environmental activists cried victory.

“Shell’s Arctic failure is being watched closely by other oil companies, who must now conclude that this region is too remote, too hostile and too iconic to be worth exploring,” Greenpeace International Arctic oil campaigner Charlie Kronick said in a reaction.

Jacqueline Savitz, the U.S. chief of the Oceana conservationist group, said Shell’s retreat shows that offshore drilling in the Arctic is “simply not a good bet from a business perspective.”

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U.S. FTC Said to Open Oil Price Probe, Mirroring EU Inquiry

Screen Shot 2013-05-17 at 01.06.41June 25 (Bloomberg) — The U.S. Federal Trade Commission opened a formal investigation into how prices of crude oil and petroleum-derived products are set, mirroring a European Union inquiry, two people familiar with the matter said.  The investigation, now in a preliminary stage, will probably broaden into a multi-jurisdictional affair…

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U.S. FTC Said to Open Oil Price Probe, Mirroring EU Inquiry

Jun 25, 2013 12:01 am ET

June 25 (Bloomberg) — The U.S. Federal Trade Commission opened a formal investigation into how prices of crude oil and petroleum-derived products are set, mirroring a European Union inquiry, two people familiar with the matter said.

The investigation, now in a preliminary stage, will probably broaden into a multi-jurisdictional affair like the inquiry into manipulation of the London interbank offered rate, or Libor, the people said. FTC investigators are reviewing the progress made by their European counterparts, the people said, asking not to be identified because the matter is confidential.

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Shell Nigeria: Explosion forces closure of Trans Niger Pipeline

Environmental activists accuse Shell Nigeria of using oil theft as an excuse to cover up accidental spills. The company has to compensate local communities for spills not caused by theft.

Shell Nigeria: Explosion forces closure of Trans Niger Pipeline carrying 150,000 barrels a day

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By Associated Press, Published: June 20

LAGOS, Nigeria — Shell Nigeria says an explosion and fire caused by oil theft have forced it to shut down its Trans Niger Pipeline that carries 150,000 barrels of crude a day.Thursday’s statement said the theft of oil, known as bunkering, caused the conflagration at Bodo West in Ogoniland. The area in southern Nigeria already has suffered decades of oil spills.Shell’s Nigeria Director Mutiu Sunmonu described “another sad reminder of the tragic consequences of crude oil theft.”

Environmental activists accuse Shell Nigeria of using oil theft as an excuse to cover up accidental spills. The company has to compensate local communities for spills not caused by theft.

“Sabotage is a problem in Nigeria, but Shell exaggerates this issue to avoid criticism for its failure to prevent oil spills,” Audrey Gaughran of Amnesty International said.

Copyright 2013 The Associated Press. All rights reserved.

Iraq, Royal Dutch Shell kick off major gas project in oil-rich south

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By Associated Press, Updated: Wednesday, May 1, 1:16 PM

BAGHDAD — Royal Dutch Shell says it has officially kicked off a multibillion-dollar project to tap natural gas in Iraq’s south.The $17 billion joint venture will gather, process and market associated gas, a by-product of producing oil, from three oil fields in the petroleum-rich province of Basra.

Iraq holds 51 percent in the 25-year partnership while Shell holds 44 percent and Japan’s Mitsubishi holds 5 percent. The gas will be used mainly for domestic energy needs, but there is also an option for exports. Wednesday’s announcement was published on Shell’s website.

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Interior Dept. criticizes Shell’s Arctic drilling

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By , Published: March 14

The Interior Department issued a report sharply critical of Shell’s exploration drilling efforts in the Chukchi Sea off Alaska last year, but Secretary Ken Salazar gave the company the go-ahead to try again in 2014.

Environmental groups harshly criticized the report and said it raised questions about the department’s ability to conduct independent regulatory oversight.

“Exploration in the Arctic is a key component of the President’s all-of-the-above energy strategy, and is important to our understanding of the oil and gas potential in this frontier region,” Salazar said after the completion of a 60-day review by the department that recommended companies follow “Arctic specific” standards.

Shell has already announced a “pause” in its drilling plans after a series of delays and mishaps culminating in its rig, the Kulluk, getting damaged in a storm when it ran aground on its way to port.

Shell has spent nearly $5 billion and several years preparing to drill for oil in the Chukchi Sea off Alaska’s Arctic coast. Harsh weather limits the drilling season there to about three or four months and Shell’s plans were delayed both by its trouble getting federal approval of its containment system and by an unusually late ice season. Eventually the company pared back its plans and instead of completing two to six exploration wells it installed blowout preventers on the top of partially drilled wells.

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Davos activists occupy Shell station to protest Arctic drilling, warn of environmental danger

By Associated Press, Updated: Friday, January 25, 10:23 AM

DAVOS, Switzerland — Activists with a big fake polar bear have occupied a Shell service station in the Swiss resort of Davos to protest Royal Dutch Shell PLC’s oil drilling in the Arctic.

About 25 activists from around Europe chained gas pumps together Friday at the station near where the World Economic Forum was being held and hung a banner on the roof reading “Arctic Oil – Too Risky.”

Greenpeace helped stage the protest, raising concerns about dangers to the environment from Shell’s drilling in Alaska and urging forum organizers to reconsider Shell’s participation. A Shell drill barge ran aground on a remote Alaska island on New Year’s Eve.

Shell officials, among the 2,500 corporate and political leaders in Davos this week, did not immediately respond to phone calls about the protest.

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Shell oil drilling vessel towed after running aground off Alaska island during storm

ANCHORAGE, Alaska — A Royal Dutch Shell PLC drill vessel pulled from rocks off a remote Alaska island approached shelter Monday morning in a protected Kodiak Island bay.

By Associated Press, Updated: Monday, January 7, 6:55 PM

ANCHORAGE, Alaska — A Royal Dutch Shell PLC drill vessel pulled from rocks off a remote Alaska island approached shelter Monday morning in a protected Kodiak Island bay.The Kulluk, a circular drill barge without its own propulsion, ran aground New Year’s Eve in a powerful storm. It was being towed to Seattle for maintenance before it ran aground, but the lines that connected it to the towing ship broke. That same ship, the 360-foot Aiviq, pulled the Kulluk off the rocky bottom near Sitkalidak Island at 10:10 p.m. Sunday and started a slow tow toward Kiliuda Bay.High winds and sea swells threatened to slow the barge’s 30-mile journey to the bay. But the ship made steady progress, moving about 4 mph. By 9 a.m., the vessels were about four miles from where crews planned to anchor up.

The massive effort to move and salvage the ship involves more than 730 people, according to the Unified Command, which includes the Coast Guard, Shell and contractors involved in the tow and salvage operation. Eleven people are aboard the ship — a salvage crew of 10 people and one Shell representative.

The Kulluk is carrying more than 140,000 gallons of diesel and about 12,000 gallons of lube oil and hydraulic fluid.

A tug trailing the drill vessel used infrared equipment to watch for oil sheens and reported no petroleum discharge.

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Protecting universal human rights

Letter to the Editor

Published: October 14

The Post missed the mark in its Oct. 5 editorial “Court shopping,” which advocated clear limits on the scope of the Alien Tort Statute (ATS). In Kiobel v. Royal Dutch Petroleum (Shell), the complaint is that Shell directly assisted the Nigerian military in torturing and killing innocent villagers. If true, the purpose of Shell’s misconduct was to gain economic advantage in its business. Shell argued that as a Dutch corporation, it should not have to answer in America for these alleged human-rights abuses.Shell is wrong. The United States should enforce the universally accepted international law against torture. Shell is a multinational corporation that operates a billion-dollar business in America. If Shell has used torture to gain an advantage in its business, including its massive U.S. operations, we have a direct interest in holding Shell responsible for its conduct. A level playing field, free from torture as a tool for reducing costs, is an essential feature for the U.S. petroleum market. We also have an interest in providing justice to the Kiobel plaintiffs, who are lawful U.S. residents.

The United States also has an obvious interest in making universally recognized human rights protections effective. Our Founders enacted the ATS two centuries ago to affirm our commitment to the rule of international law among all the world’s nations. Indeed, in 1795, the U.S. attorney general specifically advised that the ATS open our courts to violations of international law in Africa. More than 200 hundred years later, in an interconnected global economy, our interest in upholding the statute and the remedies it affords is stronger than ever.

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Nigerian farmer sue Shell in Dutch court claiming oil giant has to clean up spills

By Associated Press, Updated: Thursday, October 11, 12:11 PM

THE HAGUE, Netherlands — Nigerian farmers asked a Dutch court Thursday to rule that oil company Shell is liable for poisoning their fish ponds and farmland with leaking pipelines, in a case that could set a legal precedent for holding multinationals responsible for actions overseas.The case at The Hague Civil Court marks the first time a Dutch company has been sued for alleged environmental mismanagement caused by a foreign subsidiary and could pave the way for similar claims if it succeeds.

Royal Dutch Shell PLC long argued that the case, which was launched in 2008, should be heard in Nigeria and still maintains the Dutch court should not have jurisdiction.

Lawyers for the Nigerians argue that key policy decisions by Shell are made at its headquarters in The Hague and that means the Dutch court can rule in the case.

Just how much compensation and clean-up costs Shell faces would be addressed at a separate hearing if the court rules in favor of the farmers.

Four villagers and environmental group Friends of the Earth say Shell pipeline leaks fouled fish ponds, farmland and forests in three villages in the Niger Delta, Goi, Oruma and Ikot Ada Udo.

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Dutch judge rejects Shell attempt to ban Greenpeace from protesting its Arctic drilling

By Associated Press, Updated: Friday, October 5, 4:29 PM

AMSTERDAM — A Dutch court has rejected a lawsuit filed by Royal Dutch Shell PLC against Greenpeace International seeking to ban environmentalists from holding protests against the oil company’s Arctic drilling program on or near Shell property.

The Amsterdam District Court said Friday Greenpeace has the right to protest, and Shell should expect public protest about business practices that are controversial.

However, the court also handed Greenpeace a set of protest guidelines intended to ensure its protests are “proportionate,” including the requirement the group not occupy gas stations for more than an hour at a time.

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Shell president optimistic about Arctic offshore drilling despite setback with safety system

By Associated Press, Tuesday, September 18, 2:56 AM

ANCHORAGE, Alaska — Shell is limiting Arctic drilling off Alaska to just preparation work this year after suffering several setbacks, but the company says it remains optimistic about the project’s prospects.

Netherlands-based Royal Dutch Shell PLC said earlier Monday that a containment dome required to be in place before drills can enter oil-bearing rock in the Chukchi and Beaufort seas was damaged Saturday during testing off Bellingham, Wash.

Environmental groups quickly blasted the company, saying the latest setback and others are evidence the oil industry cannot safely drill in the Arctic.

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Shell set to begin drilling off Alaska

By , Sunday, September 9, 12:51 AM

With the ice-free drilling season nearing an end, Shell Oil was expecting to start its first exploration well in the Chukchi Sea off the northwest coast of Alaska on Saturday afternoon.

On Friday, the Noble Discoverer drilling rig was moored to eight anchors spread in a circular pattern 6,500 feet across on the sea floor to center the rig over the well. Each anchor weighs several tons.

The company said that crews on board would begin drilling a pilot hole to a depth of roughly 1,400 feet, stopping well short of the oil-bearing reservoirs while the company finishes work on a spill control vessel it needs in place before getting final permits.

Last week the Interior Department said that Shell could drill the pilot hole and the 20-by-40-foot hole called the mud line cellar, which will house the blowout preventer and allow it to sit below the sea floor. The company also will install casing and cement in the top portion of the well.

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Arctic sea ice hits record low, scientists say

By , Monday, August 27, 5:28 PM

NASA Goddard Space Flight Center – This visualization shows the extent of Arctic sea ice on Aug. 26, the day the sea ice dipped to its smallest extent ever recorded in more than three decades of satellite measurements. The line on the image shows the average minimum extent from the period covering 1979-2010. Every summer the ice cap melts down to what scientists call its “minimum” before colder weather builds the ice cover back up.

The extent of Arctic sea ice reached a record low Monday, according to the University of Colorado National Snow and Ice Data Center, and is on track to decline further in the next two weeks.The news that the Arctic sea ice cover had shrunk to 1.58 million square miles (4.1 million square kilometers) on Sunday came two days after Royal Dutch Shell’s drill ship, the Noble Discoverer, took advantage of reduced sea ice and started sailing from Alaska’s Dutch Harbor to the Chukchi Sea, in anticipation of final federal approval for oil exploration activities there. The area covered by Arctic summer sea ice usually reaches its low point around Sept. 13, when the region begins to cool. But it has been melting at an unprecedented 38,600 square miles (100,000 square kilometers) per day, and it is likely to decline even further before the ice begins to re-form. The last minimum sea-ice record of 1.61 million square miles (4.17 million square kilometers) was set in September 2007.Walt Meier, a research scientist at the National Snow and Ice Data Center, said long-term warming coupled with recent weather conditions account for the new low. He noted that the long-term warming trend has produced more open water, which in turn absorbs more heat and makes the ice thinner.

“The thinner ice cover is then more easily melted during the summer, and more easily broken up by winds and waves from storms, which leads to more melting as well,” Meier wrote in an e-mail. “This year we had a pretty strong storm go through the Arctic in early August, and that certainly has been a big factor in the rapid loss during August. But before that storm, we were already tracking along the 2007 trajectory, so a record may have happened even without that storm because of the long-term trend.”

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Shell Oil scales back Arctic drilling plan, now looking at 2 wells for 2012

By Associated Press, Updated: Tuesday, July 31, 9:55 PM

ANCHORAGE, Alaska — Shell Oil Co. is downsizing its plan for off-shore drilling in the Arctic this year amid delays completing a spill containment barge required by the federal government, a spokesman said Tuesday.

Shell now hopes to complete two wells in 2012 instead of five. One would be in the Beaufort Sea off the northern Alaska coastline, and the other in the Chukchi Sea off the northwest coast between Alaska and Russia.

The company’s ambitious two-year goal of drilling 10 wells remains in place, company spokesman Curtis Smith said.

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Greenpeace finds deep-sea corals on Shell’s Arctic drill site

By , Published: July 27

Greenpeace scientists have identified a dense patch of deep-sea corals in a lease area of the Arctic’s Chukchi Sea off Alaska’s northwest coast, where Royal Dutch Shell is slated to start drilling.Researchers for the advocacy group, which have been lobbying to block drilling in the Arctic this summer, went down about 150 feet in a submarine this week to take samples. During the dives, they found significant concentrations of the soft coral Gersemia rubiformis , which is commonly known as sea raspberry.

Shell is awaiting final permits to begin drilling in the Chukchi and Beaufort seas and has predicted it could start as early as next week.

In its scientific report on the Chukchi’s benthic, or seafloor, environment, Shell identified corals as occupying less than 4 percent of the habitat.

But Greenpeace marine biologist John Hocevar described the corals as the “third most abundant” species he sampled, after two types of sea stars. He conducted the mission in a leased area about 10 miles from one of the company’s vessels.

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Protest Stalls Energy Giant in Rural Ireland

The Washington Post: Protest Stalls Energy Giant in Rural Ireland

“The government and Shell should be ashamed of themselves,”

Sunday 25 September 2005
Farmers’ Jailing Over Gas Project Fuels Sharp Debate

By Kevin Sullivan
Washington Post Foreign Service
Sunday, September 25, 2005; Page A30

ROSSPORT, Ireland — Five farmers from these wind-swept coastal boglands have been locked up in a Dublin prison for nearly three months for blocking construction of a $1.1 billion natural gas pipeline and refinery by the Shell oil group, a standoff that has forced suspension of the largest energy project in Irish history.

The imprisonment of the group known here as the Rossport Five, which includes a 65-year-old former schoolteacher, has sparked protest marches across Ireland and an emotional debate about the pace and balance of economic development in a once-poor country that has become one of Europe’s greatest success stories.

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Royal Dutch Shell News Saturday 6 November, 2004

Oil Continues Upward March

The Washington Post: Oil Continues Upward March

“Royal Dutch/Shell Group of Cos… withdrew nonessential personnel from the Niger Delta, said Simon Buerk, a London-based spokesman for the company. Citing policy, Buerk would not say whether production in the country was reduced as a result of the personnel withdrawal.”

Justin Blum and Nell Henderson

Sep 29, 2004

Crude oil prices jumped beyond $50 a barrel yesterday, renewing concerns that sustained high energy costs will further weaken the U.S. economy.

The surge came after rebels in Nigeria threatened to interfere with oil production, upsetting a market already on edge over domestic supply disruptions in the Gulf of Mexico caused by Hurricane Ivan. Lost production and a decline in imports because of the storm led to a reduction in U.S. crude oil inventories.

At the close, U.S. benchmark crude oil for November delivery on the New York Mercantile Exchange stood at a record $49.90 per barrel. Adjusted for inflation, the price was still below its peak in 1981.

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Shell Transport And Trading Buys Back 2M Shares

The Wall Street Journal: Shell Transport And Trading Buys Back 2M Shares

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