Royal Dutch Shell Plc  .com Rotating Header Image

Shell ignored safety warnings ‘partly to avoid tax’, says US Coast Guard

Screen Shot 2014-04-04 at 17.31.53

Damning allegations are made in the report into how Shell came to allow the Kulluk to run aground in December 2012. Photograph: PA3 Jon Klingenberg/AP

Shell has been accused by the US Coast Guard of ignoring safety warnings and moving one of its drill ships in the US Arctic, partly in a bid to avoid paying extra taxes.

The damning allegation is contained in an official 152-page report by the US Coast Guard into how the Anglo-Dutch oil group came to allow the Kulluk to run aground in December 2012.

Shell has recently been forced to shelve any plans to drill in the Beaufort Sea again this summer after a federal appeal court ruled the US authorities had failed to properly consider the potential risks.

One senior US politician said Shell should be punished for its “reckless” behaviour and the report raised “major red flags” over any future oil and gas exploration in the pristine waters of the far north.

The US Coast Guard report said Shell’s plans “were not adequate for the winter towing operation across the Gulf of Alaska” while arguing that a potential tax penalty influenced the decision to set sail in stormy weather. The Kulluk was in danger of being subjected to new Alaskan taxes if it stayed in local waters beyond the end of December.

The US Coast Guard quoted the master of a ship brought in from an independent towing company, Edison Chouest Offshore, to oversee the move of the Kulluk as saying early on in the operation: “To be blunt, I believe that this length of tow, at this time of year, in this location, with our current routing guarantees an ass kicking.”

A spokesperson for Shell, which spent $5bn on Alaskan exploration without any significant oil or gas find, said the company was still reviewing the report, which it accepted was based on a thorough investigation and would take any findings seriously.

The official added: “Already, we have implemented lessons learned from our internal review of our 2012 operations. Those improvements will be measured against the findings in the USCG report as well as recommendations from the US Department of the Interior.”

There was no comment on the suggestion that Shell partly moved the rig to avoid taxes but this was previously denied in December 2012 by the now-departed chief executive, Peter Voser.

Meanwhile senator Ed Markey, a Democratic member of the Senate commerce and environment committees in Washington, said: “This report shows that Shell ran through every single safety and common sense red light in moving this rig because of financial considerations. This kind of behaviour should raise major red flags for any future Arctic drilling plans … Shell should be held accountable for its reckless behaviour.”

SOURCE and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

0 Comments on “Shell ignored safety warnings ‘partly to avoid tax’, says US Coast Guard”

Leave a Comment

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.

%d bloggers like this: