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Gale Norton at centre of corruption inquiry over oil-shale awards to Shell

Times Online

September 18, 2009

Carl Mortished World Business Editor

Gale Norton, a senior member of President Bush’s Cabinet, is the focus of a corruption investigation over her support of oil-shale exploration by Royal Dutch Shell, her current employer.

The US Department of Justice is examining Ms Norton’s role in the award of three leases on federal land in Colorado for oil-shale development to Shell. The lawyer, who provoked the fury of environmentalists for rolling back regulation that prevented oil and gas development on state land, resigned as Interior Secretary in March 2006.

Only weeks after the Bureau of Land Management awarded the leases to Shell in December 2006, the first oil-shale rights granted in America for three decades, the company hired Ms Norton as general counsel for its unconventional-resources unit, the business that develops oil shale.

Shell confirmed yesterday that it was aware of the Department of Justice investigation, but declined to comment further.

The inquiry’s main focus, according to US reports, is whether Ms Norton discussed employment with a private company. Public officials are barred from such discussions if their actions could benefit a company. The investigation will also look into a wider offence of violating public trust by steering government business to friends.

Oil-shale leasing is highly controversial and widely opposed by environmental groups, which argue that it is a dirty fuel and that its extraction, from sedimentary rock, would despoil large areas of pristine wilderness. The oil extracted from shale, known as kerogen, is the original source of crude oil or natural gas when compressed and heated in the earth’s crust.

Colorado has huge deposits of oil shale and its supporters claim that extraction could provide huge energy resources. However, the Obama Administration is reversing the proenergy business tide.

Ken Salazar, the current Interior Secretary, scrapped plans for further oil-shale leasing in Colorado and Wyoming in February and rescinded a lease offer for oil-shale research and development on 1.9 million acres.

During her five years in office, Ms Norton earned the enmity of environmental groups for her pro-business, pro-energy industry stance in her management of federal land. Her tenure was defined by a reversal of volumes of Clinton-era legislation protecting federal land from exploitation as she supported more logging, mining and drilling. Her decision to step down in 2006 was cheered by environmentalists, including Michael Finkelstein of the Centre for Biological Diversity, who said: “The fox wasn’t just guarding the henhouse, she burnt it down.”

Ms Norton was forthright in supporting the opening of the Arctic National Wildlife Refuge, a wilderness on Alaska’s north coast widely believed by oil companies to contain large oilfields. The Bush Administration encouraged Ms Norton’s vigorous campaign to open the ANWR to exploration but despite mounting public concern last year about America’s energy shortage, it failed to get congressional support.

The former Interior Secretary’s support for more onshore drilling in the US led to huge investment and a surge in natural gas production.

Gas output on federal lands rose 17 per cent during her period in office and Ms Norton’s policies played a significant role in the recent worldwide collapse in the price of natural gas.

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