Extract from an article by Carolyn Davis published 10 April 2014 by NaturalGasIntel.com
The Obama administration, joined by Royal Dutch Shell plc, has asked an Alaska district court to allow the U.S. Department of Interior to revise an environmental impact statement (EIS) used to support the Chukchi Sea lease sale in 2008. The U.S. Court of Appeals for the Ninth Circuit in January ruled that Chukchi Sea Lease Sale 193 held in 2008 may have used inadequate information regarding available reserves and environmental risks (see Daily GPI, Jan. 23; Feb. 8, 2008). The ruling reinstated a 2008 ruling against the government that favored several conservation groups and Alaska stakeholders.
Extract from a Reuters article by Balazs Koranyi published 11 April 2014
(Reuters) – Royal Dutch Shell has postponed an innovative project to provide subsea gas compression on Norway’s Ormen Lange field, one of the biggest gas fields in Europe, it said on Friday. “The oil and gas industry has a cost challenge,” Shell said in a statement. “This, in combination with the maturity and complexity of the concepts and the production volume uncertainty, makes the project no longer economically feasible.”
JUNEAU — A request by a Democratic senator that a Republican committee chairwoman require oil industry officials to be sworn before testifying Wednesday about the effects of last year’s tax cut erupted into a sharp personal battle between the two. The verbal confrontation started in committee and moved to the Senate floor. French cited the Coast Guard investigation into the grounding of Shell’s drilling rig Kulluk as a reason for putting the company officials under oath. Referring to a recent Daily News story on the investigation, French noted that a Shell official once denied to a reporter that there was any connection between Shell’s decision to move the Kulluk in early winter and the property tax the company would have to pay if the rig remained safely in Dutch Harbor. But under oath to the Coast Guard, the Shell official admitted the pending tax payment was one of the considerations for beginning the rig’s tow into a fierce Gulf of Alaska storm.
Extract from an article published April 10, 2014 by The Association for Convenience & Fuel Retailing
LONDON – Shell will unveil its future growth plans at a two-day, invite-only event in central London on June 23-24 during the Shell Global Growth Event 2014, an event that provides a platform for future collaboration with retailers and industry suppliers. The Shell Global Growth Event 2014 will take place on 23-24 June 2014 at the Renaissance St. Pancras Hotel, London.
New Delhi: Dr Mike Watts, the man credited with discovering India’s largest onland oil field in Rajasthan, will step down from the board of Cairn Energy plc in mid-May. He saw oil in the Thar desert when Royal Dutch Shell could not and bought out the supermajor in block RJ-ON-90-1 for USD 7.25 million.
EXTRACT FROM A RELATED FT ARTICLE
Mike Watts to quit Cairn Energy as deputy chief executive
Mike Watts, who was credited as the geological brains behind Cairn Energy’s blockbuster drilling success in India, is to leave the oil and gas explorer – just weeks after founder Sir Bill Gammell said he would step down as chairman.
The giant oil field in India sold for a song by Shell
Prelude stores thousands of tonnes of LNG and LPG with an almost constant and simultaneous operation of loading this product onto carrier vessels moored alongside. So any Safety Case has to look at the combined risks of Prelude and the carrier vessel moored alongside.
Fourth in a series of articles by Bill Campbell (right), retired HSE Group Auditor, Shell International, about safety issues relating to the Shell Prelude FLNG project
Hope you find this interesting, perhaps your contributors can answer the question posed at the end.
When I started to write these articles I was struck by the manner in which Prelude FLNG as a hazardous substances plant turned the conventional wisdom of plant design and layout on its head. Could such an installation be approved in the offshore UK for example? A hypothetical question but one worthy of an answer. I don’t believe it could. After all the Health and Safety Regulator in the UK, the custodian and owner of the many British Standards and codes for the design and layout of onshore hazardous substances plants, is the same Regulator for the offshore oil and gas industry. This is also the same Regulator that followed up on Cullen’s recommendation and put in place a suite of legislation requiring offshore installations to restrict the heat energy in an emergency, so ensuring hydrocarbon events could not escalate to threaten the newly installed temporary refuges. Prelude stores thousands of tonnes of LNG and LPG with an almost constant and simultaneous operation of loading this product onto carrier vessels moored alongside. So any Safety Case has to look at the combined risks of Prelude and the carrier vessel moored alongside.
I covered all this in an earlier article in more detail. There appears to be something absurd about the abandonment of these design conventions (developed as they were post catastrophic incidents) because of expediency. Particularly placing hundreds of workers at risk because they will constantly occupy a building resting on the hull where the LNG and LPG are stored.
In looking for an example to support my concerns, again a factual example, not a figment of imagination, we should refer to the March 2005 Texas City Refinery Explosion. The plant was built in 1934 and by all accounts it was not in good condition. It was at the time the third largest US refinery however and took up a considerable surface area. The loss of life when heavier than air hydrocarbon vapours ignited should have been restricted to the operator who got out of his pick-up truck, leaving the engine running, (thought to be the source of ignition) to go up the tower to see what the problem was. There was a significant distance between the seat of the explosion and permanently installed occupied buildings, very few souls should have been at risk if the plant had been operating in compliance with the applicable laws.
Why then were there 185 casualties, some 15 fatalities and 170 injured, many seriously?
Well it’s all down to expediency, a means to an end, the plant needed major modifications, it needed large numbers of staff with contractors, workshops etc, air conditioned trailers so these were assembled, a sort of gypsy encampment only 350 feet from the seat of the explosion in a hazardous area. The change control process which allowed the siting of the contractors trailers in this location was issued in 2004 and justified on the grounds that the risks were acceptable given the unlikely probability of a loss of containment and an ignition of same.
BP, the owner and operator of the plant at the time, was heavily criticised for many aspects of this disaster, charged with criminal neglect including allowing this unlawful assembly so near to the hydrocarbon process. This is a perfect example of why the rules related to separation distances between hazardous substances modules and equipment, storage tanks, occupied buildings etc were put in place. Looking back at this incident it is almost unbelievable that the decisions to locate 200 or so contractors in ever present danger could have been considered, but when the job needs to get done, and time is money, and setting up within the plant would ensure better progress, then humans react to the pressures they are under, getting on with the job drives behaviour.
So if these isolated gas reserves have to be extracted we turn design conventions on their heads. Prelude FLNG/FLPG will not only be the biggest offshore installation in the world, it will be by an order of magnitude the most complex. Gas treatment and compression prior to the gas going to the refrigeration process, probably a twin process to handle the volumes, LNG, when in the tanks constantly maintaining its cryogenic state by constantly venting the evaporating gas, auto refrigeration meaning this process is constantly live, LPG with its own intrinsic dangers, 6 gas fired boilers, 100 MW of installed capacity and all on an installation that will remain fully manned even under cyclone conditions.
Makes me wonder if Prelude should be a cause for celebration or concern. What do you think?
Shell Prelude FLNG: loss of containment of hydrocarbons almost inevitable: 21 Feb 2014 (first Prelude article by Bill Campbell)
Tales of the Unexpected and Royal Dutch Shell Prelude FLNG: 28 March 2014 (Second Prelude article by Bill Campbell)
Shell Prelude: Tales of the Unexpected – When the party ended with a bang!: 2 April 2014 (Third Prelude article by Bill Campbell)
The development of the field off the north-west coast has been plagued by setbacks, which have delayed it for more than 13 years. Construction of a 4.9km tunnel under Sruwaddacon Bay, a special conversation area, is also progressing, new company documents show. Development of the tunnel was suspended last year after 26-year-old German hydraulics specialist Lars Wagner was tragically killed, following fatal head injuries sustained while working on it. Mayo natural gas find Corrib was first discovered in 1996. It was originally expected that gas would start flowing from it by 2003, meaning the project is now some 13 years behind the original schedule. Reports suggest the cost of developing it has come in around four times as much as original estimates, reaching €3bn.
The above right “Bad News” slide appeared in a 62 page Royal Dutch Shell PowerPoint presentation prepared in June 2000: “Excom Early Look Business Plan 2000″. Turned out to be uncannily accurate in many projects in which Shell had a leading role, including Corrib, Sakhalin II and Kashagan.
Mayo Advertiser: Corrib gas well on track to flow in 2015
ExtractsMeanwhile, Shell has also issued a statement following the broadcast of an award -winning documentary, The Pipe, on TV3 last month. The statement describes the film as “a wonderfully-shot documentary with some fantastic scenery.” “It tells a compelling human story but unfortunately provides little explanation of the events it chronicles,” continues the statement. The statement also claims several well-known supporters of the project from the local area, who were interviewed at length for The Pipe, had their contributions edited out of the film.
Extracts from an article published by Sit News on 9 April 2014 under the headline: ‘Under Oath’ Request Unprecedented
(SitNews – Ketchikan, Alaska) – Yesterday Senator Hollis French (D-Anchorage) sent a letter to Resources Chair Senator Cathy Giessel requesting that she use her statutory authority to swear in the oil industry witnesses who were scheduled to appear before the Resources Committee today (Wednesday, April 9, 2014). The investigation surrounding the grounding of Royal Dutch/Shell’s Arctic drilling rig, the Kulluk, had a role in French’s decision to make the request. Through a series of problems the Kulluk went aground. Questions arose about whether Shell took the risky move of a mid-winter tow to avoid paying millions in state property taxes. A Shell executive told the press that tax considerations had nothing to do with the move. The same executive later admitted under oath that Alaska tax laws influenced the move.
Extracts from an article by Daniel J. Graeber published 9 April 2014 by UPI
HOUSTON, April 9 (UPI) — The arctic waters off the Alaskan coast may be one of the more promising reserve basins in the nation, but exploration will have to wait, Shell said Wednesday. Ann Pickard, executive vice president for Shell’s arctic programs, said arctic nations have decided to open their waters to exploration and her company aims to develop those reserves responsibly. Last week, the U.S. Coast Guard published a 152-page report on Shell’s operations in Alaska. Shell’s drillship Kulluk struck ground off the Alaskan coast in 2012, and the Coast Guard blamed harsh winter conditions and the company’s efforts to escape Alaskan tax laws for the incident.
Extract from a Reuters article published 10 April 2014 under the headline: “Non-banks notch a win in battle of derivatives”
Companies including INTL FCStone Inc, Nomura Holdings Inc, Cargill Inc and Royal Dutch Shell Plc lobbied a congressional committee to change a rule proposed by the U.S. Commodities Futures Trading Commission on how much capital they must hold against derivatives trades as dealers. Cargill and Shell have derivatives trading arms.
Extracts from an article by ROB DAVIES published 9 April 2014 by This is Money.co.uk under the headline: “Shell’s UK corporation tax bill tumbles by nearly 90 per cent as company invests more in North Sea and production declines”
Shell’s UK corporation tax bill tumbled by nearly 90 per cent to just £55.5m last year, as the company invested more in the North Sea and production declined. Shell’s UK bill fell from £487m last year to £55.5m, less than it paid in Nigeria, Norway, Australia, Malaysia, Canada and Italy.
Shell’s public image was tarnished last week by a report from the US Coastguard which criticised readiness for Alaskan Arctic drilling. …the US Coastguard assessment of Shell’s preparedness was rather more cutting. The report criticised the plan for towing the Kulluk, saying Shell showed a ‘lack of respect’ for the conditions. It also said Shell’s decision to tow the Kulluk to Seattle amid rough winter seas was partly motivated by a desire to cut tax, something former boss Peter Voser denied.
Despite all promises to the contrary, Shell is still putting monetary considerations before safety. Just read some of the recent articles about Shell’s reckless conduct in offshore Alaska. It put the lives of offshore workers and the environment at risk to avoid a potential multimillion dollar tax bill. Personally, I do not believe enough attention has been drawn to the ethical issue of Shell deliberately putting peoples lives at risk in a calculated gamble.
Royal Dutch Shell Safety Last, not First
By John Donovan
Despite all promises to the contrary, Shell is still putting monetary considerations before safety.
Just read some of the recent articles about Shell’s reckless conduct in offshore Alaska.
It put the lives of offshore workers and the environment at risk to avoid a potential multimillion dollar tax bill.
This extract from a US News & World Report article published yesterday is typical of the many comments published elsewhere:
Notably, in September 2012, a Royal Dutch Shell drilling rig ran aground in Alaska as workers attempted to tow it beyond the state’s waters. A Coast Guard report released Friday found that the Anglo-Dutch oil company decided to move the rig – and insisted on doing so through dangerous stormy weather – to avoid paying new Alaskan taxes. The report also detailed myriad safety issues.
Personally, I do not believe enough attention has been drawn to the ethical issue of Shell deliberately putting peoples lives at risk in a calculated gamble.
For years, Shell senior management has maintained that safety is the number one priority at Shell.
Let me provide a prime example.
In July 2006 we published a leaked email from the then Royal Dutch Shell CEO, Jeroen van der Veer in which he refers to the “tragic deaths on the Brent Bravo in September 2003.”
The subject of his email was: “Safety is Job No.1.” (The red highlighting is mine.)
The first key topic is safety. Why safety, you may ask. Are we not focusing on Delivery and Growth, Operational Excellence and a First Quartile Mentality? True, but frankly – without a further improved safety performance, little else matters.
There are good reasons for focusing on safety that go beyond the recent week everyone in Downstream devoted to the topic. Safety is a right and an obligation. Safety embodies our values – honesty, integrity and respect for people. And achieving better safety performance is Enterprise First in action. Without a strong safety culture, all other aspects of our culture will erode. To me, safety is one main driver and indicator of higher performance.
Let’s be perfectly clear. Our safety performance has reached a plateau – and remains below best-in-class in our industry. Our statistics show it. We know it. What does this mean? Are we not trying hard enough, focusing hard enough, or haven’t we accepted that we have a problem? I think it is a mixture. All these aspects are probably part and parcel of the safety problem. The solution rests on willpower, behaviour and taking action.
In Shell, safety awareness rightly should be “first” nature, since we have been involved in hazardous, complex and challenging activities for more than a hundred years. Many of our people are technical experts, and know how to control the hazards of operating a platform, a refinery, a chemical plant, or a fuel depot and fuel transport. And yet, despite the experience and expertise, things can go wrong. And when things go wrong people can be hurt, or, even worse, lose their lives, which is very distressing for everyone.
And the world around us sees us as not safe enough.
In the past weeks, there have been media reports focusing on our safety performance in the North Sea, especially the Brent field. Part of the background is a debate around whether we, as a company, acted in sufficient depth and breadth on recommendations made in our own 1999 review of platform safety management. We genuinely believe we did. Nonetheless, there were two tragic deaths on the Brent Bravo in September 2003.
EMAIL EXTRACTS END
Despite all of these comments, Shell was still adding to its atrocious safety track record, as was highlighted in a Guardian article published in March 2007 under the headline: “Van der Veer – a safe pair of hands.”
The one big area where he has fallen down is safety. This month Shell admitted that 37 employees and contractors had died on company business last year. As the Guardian revealed a few weeks ago, Shell has continued to receive warnings from the Health and Safety Executive that it is acting illegally with regard to safety in the North Sea. Mr van der Veer needs to bring a halt to this…
Several months later another article published by the Guardian about Van der Veer contained the following reference to the Brent Bravo scandal and Bill Campbell:
He also makes clear he was hurt by the coverage of another fiasco – when a Shell consultant, Bill Campbell, blew the whistle on safety breaches in the North Sea.
Still nothing changed.
In 2008, Upstreamonline published an article revealing that lifeboats serving Shell Brent field North Sea platforms were unseaworthy. Two had to be removed from service.
In 2013, fuelfix published an article under the headline: Former Shell CEO: Safety must come first. And second. And third.
In his foreword to the just released Sustainability Report, Shell’s current Chief Executive Officer Ben van Beurden said: “Running a safe and efficient business is at the core of good operational performance.” Shell assured shareholders that its safety and management operations are stronger that ever.
However, it is not words, but deeds that count and in relation to safety issues, Shell’s promises had proven hollow.
Bill Campbell, the retired Group HSE Auditor of Shell International, is a regular much valued contributor to this website. He led the team which carried out a safety audit on Brent Bravo in 1999 that discovered what was known as a “Touch F*** All” policy in relation to safety issues. Safety records were routinely falsified to cover up what was going on. Bill presented the audit findings to Shell senior management and was promised the problems would be fixed. This did not happen and the explosion took place four years later. Shell subsequently admitted breaching three health and safety regulations and had to pay a record breaking £900,000 fine ($1.4 million USD approx). Bill Campbell had a face-to-face meeting with Van der Veer and reached the conclusion that the then Shell CEO was engaged, along with his colleagues, in a cover-up of the truth and is untrustworthy.
Bill and I mounted a joint campaign to draw attention to Shell offshore safety issues. Shell responded by secretly setting up a crisis team with hostile intent to go on the offense against us. Shell also commenced a global corporate espionage operation directed at this website, Shell employees and me.
What a shame that it did not instead devote the time and resources to tackle safety issues.
Here we are in 2014 and still nothing has changed. Shell still puts monetary consideration (tax dodging) before the safety of its employees, contractors and others innocently drawn into its accident prone self-insured activities.
Shell fined £900,000 over deaths BBC New 27 April 2005
Corporate killing anomoly remains BBC NEWS 25 July 2006
While the lack of fueling infrastructure remains the largest hurdle, other operational teething pains are now tempering some of the growth in LNG use that was expected to further reduce oil demand in North America, as well as carbon emissions, according to interviews with industry experts and officials from five transport companies. Royal Dutch Shell last month surprised the LNG industry when it scrapped a small-scale liquefaction unit it was building at its Jumping Pound complex near Calgary. “This additional demand has not developed in line with market expectations,” said Shell spokeswoman Destin Singleton. The company also paused work on two other plants, in Ontario and in Louisiana, but Singleton said those projects may resume due to better opportunities for LNG-powered marine vessels.