Posts Tagged ‘Oil Shale’

DENVER (AP) — Shell Oil Co. said Tuesday it is abandoning its quest for water rights from a northwest Colorado river to develop oil shale production, citing delays in the project due to the global economic downturn.

As a result of Shell’s actions, Colorado residents can breathe a little easier and the Yampa River lives to flow another year. ”

FROM A SHELL INSIDER

Shell now growing in biofuels? A few years ago Shell was going to corner the solar cell business. That has been closed down. Then Shell was growing the hot air of the windmill business. They also withdrew from a huge UK project. Shell needed reserves so expanded in the tarsand business. The (negative) environmental impact is beyond belief. So that project is scaling down as well for some obscure reason. Of late oilshale is becoming popular again, Shell even recruited a corrupt US official for it so they must be serious. But I predict this will also soon fizzle out. And now strong growth in the biofuel. This will destroy Brazilian rainforests, pressure from environmentalists will be mounting and before too long this will also be scaled down. Billions of capital destruction and no consequences for the people at the top. They resemble exactly like modern day politicians, only good at surviving and reaping personal benefits while it lasts.

Why doesn’t Shell learn from Exxon: remain focused on producing oil and gas and do it profitable. Every year a bit better than the year before. Steady and relentless. But I fear the internal know-how has been replaced by woolly language, political correctness and dependence on contractors who will steal Shell blind because if you cannot do it yourself anymore, you also cannot manage it. There has been no coherent policy for future business for years.

About time Voser wraps it up and sells off Shell in large parcels and get it over and done with.

SHANGHAI (Dow Jones)–China has started its first joint development project in shale gas, in a bid to find alternative resources for the cleaner-burning fuel to meet the nation’s rising demand.

With coal being too dirty and wind farms and nuclear power plants arriving late, it seems the world is left with a stark choice: keep on polluting or turn out the lights. Unless, that is, someone comes up with an alternative. Energy executive Rune Bjornson thinks he has the answer.

The reason is shale gas — a new and abundant source of natural gas, trapped in rock formations. Oil companies have known about it for decades but always dismissed it because it was too expensive and difficult to extract. In the past few years new technologies that pump water underground to fracture the rock and free the gas have been perfected. The breakthrough has opened a new frontier for the energy industry and turned long-held assumptions about the world’s dwindling supplies on their head. Suddenly, America is awash with gas. Tony Hayward, chief executive of BP, said it had created a “a revolution in the gas fields of North America”.

Justice targets Bush Cabinet official in probe

By JOHN HEILPRIN AND DINA CAPPIELLO

WASHINGTON — The Justice Department has launched an investigation into whether former Interior Secretary Gale A. Norton illegally used her position to steer lucrative oil leases to Royal Dutch Shell PLC, the company she works for now, officials with both departments confirmed to The Associated Press.

The criminal investigation is focused on a 2006 decision by the Interior Department to award three oil shale leases on federal land in Colorado to a Shell subsidiary. Oil from the leases could eventually earn the company hundreds of billions dollars.

Investigators are looking into whether Norton, named by President George W. Bush to run the agency in 2001, violated a law that bars federal employees from discussing employment with a company if they are involved in a decision that could benefit that company. Months after granting the leases to Shell, Norton left the agency. Shell later that year hired her as an in-house counsel for its unconventional fuels division, which includes oil shale.

Justice Department and Interior investigators also are trying to determine if Norton violated a broader federal “denial of honest services” law. Under the statute, government officials can be prosecuted for violating the public trust for directing government business to favored firms.

Officials spoke to the AP on the condition of anonymity because they were not authorized to discuss the case.

Norton could not be reached immediately for comment.

“We are aware of an investigation; however, we are not in a position to comment,” said Kelly op de Weegh, a Shell spokeswoman.

The Interior Department’s Office of Inspector General began the investigation toward the end of Bush’s last term, after receiving complaints about the lease process. The IG’s office made a formal referral to the Justice Department earlier this year after concluding there was probable cause of a criminal violation.

The investigation was first reported by The Los Angeles Times.

Prior to becoming Bush’s first Interior secretary, Norton was Colorado’s attorney general and had worked as a private lawyer for timber, oil and mining companies. At Interior, she supported expanded oil and gas drilling on government-owned land.

The development of oil shale largely in the West was one of the technologies that the Bush administration wanted to explore aggressively. In response to a recommendation by then-Vice President Dick Cheney’s energy task force, the Interior’s Bureau of Land Management issued six demonstration leases in Colorado and Utah.

Shell was the only company to receive more than one lease. Its U.S. operations are based in Houston.

Associated Press writers John Heilprin and Devlin Barrett contributed to this report. Heilprin reported from New York.

FILE – In this March 20, 2006 file photo above, then-Interior Secretary Gale Norton speaks at the Agriculture Department in Washington. (AP Photo/Haraz N. Ghanbari, FILE)

Copyright © 2009 The Associated Press. All rights reserved.

ASSOCIATED PRESS ARTICLE

THE WALL STREET JOURNAL

September 18, 2009, 9:08 AM ET

By Ashby Jones

Gale Norton, a secretary of the interior in the Bush Administration, now works as an in-house lawyer in Denver for Royal Dutch Shell. In 2006, while she was still in office, her department granted three tracts in Colorado to a Shell subsidiary for shale exploration. Also while in office, she reportedly had conversations with the oil company about future employment.

Was her discussing potential job opportunities at the time illegal? The Justice Department is investigating. Click here for the NYT article, here for the WSJ story, here for the LA Times piece that broke the story.

DOJ sources told the WSJ that the investigation is still in its early stages.

A Shell spokeswoman said the company has been notified of an investigation by the government, but declined to comment further. The spokeswoman told the WSJ said Norton wasn’t available for comment.

During Norton’s tenure at Interior, she came under criticism from the agency’s inspector general, Earl Devaney, for tolerating what he characterized as a pattern of ethical lapses involving agency officials, including her deputy, Steven Griles. Griles pleaded guilty in 2007 to lying before a Senate committee about his ties to Jack Abramoff, the disgraced lobbyist who is now in prison.

The department’s dealings with energy companies that lease government-managed land have been frequently faulted. Last fall, an investigation by Devaney’s unit found that employees at an Interior Department office responsible for collecting royalties from oil and gas companies broke government rules by accepting gifts from and having sex with industry representatives.

Earlier this week, the Obama administration announced the termination of a program—administered by the same office—that allows companies to give the government in-kind payments for oil and natural gas taken from federal land and waters, rather than paying cash royalties. Interior Secretary Ken Salazar said the program would be replaced by “a more transparent and accountable” payment system.

WSJ ARTICLE

Former Interior Secretary Gale Norton is focus of corruption probe

The Justice Department investigation centers on a 2006 decision to award oil shale leases in Colorado to a Royal Dutch Shell subsidiary. Months later, the oil giant hired Norton as a legal counsel.

By Jim Tankersley and Josh Meyer

September 17, 2009

Reporting from Washington – The Justice Department is investigating whether former Interior Secretary Gale A. Norton illegally used her position to benefit Royal Dutch Shell PLC, the company that later hired her, according to officials in federal law enforcement and the Interior Department.

The criminal investigation centers on the Interior Department’s 2006 decision to award three lucrative oil shale leases on federal land in Colorado to a Shell subsidiary. Over the years it would take to extract the oil, according to calculations from Shell and a Rand Corp. expert, the deal could net the company hundreds of billions of dollars.

The investigation’s main focus is whether Norton violated a law that prohibits federal employees from discussing employment with a company if they are involved in dealings with the government that could benefit the firm, law enforcement and Interior officials said.

They said investigators also were trying to determine if Norton broke a broader federal “denial of honest services” law, which says a government official can be prosecuted for violating the public trust by, for example, steering government business to favored firms or friends.

The Interior Department’s Office of Inspector General began the investigation during the waning months of the George W. Bush administration and more recently made a formal criminal referral to the Justice Department. Norton is the first Bush official at the Cabinet secretary level to be the subject of a formal political corruption investigation.

Shell spokeswoman Kelly C. op de Weegh declined to comment on behalf of both the company and Norton, who did not respond to numerous calls. “Shell has not received an official notification with regard to a government investigation. Consequently, we are not in a position to comment at this time,” she said.

The Justice and Interior departments also would not comment.

Interior Department investigators referred the case to the Justice Department after concluding that there was sufficient evidence of potential illegal conduct, according to federal law enforcement and Interior officials. The officials spoke on the condition of anonymity because of the sensitive and confidential nature of the case.

Those officials said the referral was based on an already comprehensive Interior Department investigation that included interviews with numerous Interior employees. The Justice Department has assigned prosecutors from its public integrity section and the U.S. attorney’s office in Washington to the case.

Norton, 55, was President Bush’s first Interior secretary. She had worked as an Interior Department attorney before being elected Colorado’s attorney general. Later, as a private lawyer, she represented mining, timber and oil companies.

As Interior secretary, she embraced an industry-friendly approach to environmental regulation that she called “cooperative conservation” and pushed the department to open more public land for energy production.

Norton also backed commercial development of the oil shale reserves buried in the rocks of the Mountain West. Known as “the rock that burns,” oil shale refers to rocks that release liquid petroleum when heated to extreme temperatures. The highly controversial process promises immense fuel production, but environmentalists argue that it contaminates rugged landscapes and drains precious water.

In early 2006 — following the recommendations of a team representing several federal agencies and states — the department announced that it planned to award Shell three oil shale leases. Norton resigned two months later, saying that she had no job lined up. In December of that year, Shell announced it had hired Norton as in-house counsel to its unconventional fuels division, which includes oil shale.

The Justice Department, working with Interior Department investigators, is looking into whether Shell received a competitive advantage or other preferential treatment from the Interior Department in the awarding of the leases.

“If [Norton] had feelers out, or was in discussions with Shell in any way, she is absolutely forbidden from participating in any way from doing anything with Shell,” a law enforcement official said.

The federal government long has sought a cost-effective way to extract the abundant oil resources from Western shale rock.

Then-Vice President Dick Cheney’s energy task force recommended aggressive steps to encourage private industry to develop such technology. In response, the Bureau of Land Management issued six oil shale “research, development and demonstration” leases. The leases, five in Colorado and one in Utah, granted access to up to 160 acres of federal land apiece to develop shale programs — with an option to increase that to 5,000 acres once a technique proved commercially viable.

On average, each of those 5,000-acre lease tracts holds an estimated $700-billion worth of recoverable oil (at today’s $70-per-barrel price), said James T. Bartis, a shale expert at Rand. Shell has estimated the costs of recovering the oil at $30 per barrel, leaving a potential profit of about $1 trillion after royalties if all the oil is extracted.

Shell was the only company to receive more than one tract.

“Shell got some of the best lands” that the government made available, Bartis said.

At the time, critics accused the Interior Department of undermining a central goal of the leases by awarding three of them to Shell. The leases were meant to allow companies to test distinct methods for extracting shale from rock. But each of Shell’s tracts was granted for a variation of the same process.

Critics also raised questions about the fairness of the process, given that Shell filed its first lease application just a day after the department issued its call for proposals in June 2005.

That August, Bush signed the Energy Policy Act of 2005, which included a provision that changed federal law to allow companies to hold multiple oil shale leases. Interior Department officials said they did not notify potential bidders that the law had changed. Shell, which had lobbied Congress to allow companies to hold more than one lease, quickly filed two more applications, BLM records show.

No other company applied for more than one lease.

The lease proposals were evaluated in the fall of 2005 by the interdisciplinary team that included representatives of several Western governors and from the Energy and Defense departments. The team’s recommendations included awarding three leases to Shell.

The Interior Department investigation initially focused on whether agency officials had improperly assisted Shell and other private-sector companies. Three of the interviewed BLM employees — who all spoke on condition of anonymity because an investigation was ongoing — said the questions investigators posed focused on Norton and her role in the lease process.

jtankersley@latimes.com

josh.meyer@latimes.com

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Copyright © 2009, The Los Angeles Times

SOURCE ARTICLE

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