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September 10, 2013
Shell Fined $1 Million for Clean Air Act Violations in Arctic
    by Robert Kropp

The Environmental Protection Agency finds the company violated its Clean Air Act permits in the Arctic after encountering operational challenges with its two drilling rigs.

In 2011, the US Department of the Interior's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) granted Royal Dutch Shell the initial permits to begin drilling for oil in the Alaskan Arctic. The exploration plan submitted by Shell and approved by BOEMRE estimated that in the event of a massive spill it has the capability of recovering 90% of the oil released. Rebecca Noblin, Alaska Director for the Center for Biological Diversity, called such an estimate "absolutely ridiculous." Only five percent of the oil released during last year's Gulf of Mexico disaster was recovered, and eight percent from the Exxon Valdez spill in 1989.

Greenpeace and the UK-based FairPensions warned investors of the risks associated with deepwater drilling in the Arctic. "Current technology is ill equipped to deal adequately with a large oil spill in Arctic waters," Greenpeace stated.

The FairPensions investor briefing was published later, after a series of dangerous mishaps during the summer of 2012 forced Shell to curtail its activities for the year. Shell did not resume its exploration for oil in the Arctic in 2013. According to an Interior Department review of Shell's activities in the Arctic, the company encountered challenges “in connection with certification of its containment vessel, the Arctic Challenger; the deployment of its containment dome; and operational issues associated with its two drilling rigs, the Noble Discoverer and the Kulluk.”

In its investor briefing, FairPensions identified a number of serious problems in Shell's Arctic activities, including the grounding of the Noble Discoverer drill ship, unpreparedness for weather conditions, and inadequate spill response equipment.

Last week, the Environmental Protection Agency (EPA) announced that it had fined Shell a total of $1.1 million in connection with the company's violations of its Clean Air Act permits for arctic oil and gas exploration drilling off the North Slope of Alaska.

“EPA documented numerous air permit violations for Shell’s Discoverer and Kulluk drill ship fleets, during the approximately two months the vessels operated during the 2012 drilling season,” the Agency said. The Clean Air Act permits set emission limits, pollution control requirements, and monitoring, record keeping, and reporting requirements on the vessels and their support fleets of icebreakers, spill response vessels, and supply ships.

Shell agreed to pay a $710,000 penalty for violations of the Discoverer air permit and a $390,000 penalty for violations of the Kulluk air permit.


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