Tag Archives: Shell oil pollution

Loving Oil in Any Way, Shape or Form — Damn Climate Change!

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Many oil assets are ending up in the hands of private-equity (PE) firms. In the past two years alone these bought $60bn-worth of oil, gas and coal assets, through 500 transactions… Some have been multibillion-dollar deals, with giants such as Blackstone, Carlyle and KKR carving out huge oilfields, coal-fired power plants or gas grids from energy groups, miners and utilities. Many other deals, sealed by smaller rivals, get little publicity. This sits uncomfortably with the credo of many pension funds, universities and other investors in private funds, 1,485 of which, representing $39trn in assets, have pledged to divest fossil fuels. But few seem ready to leave juicy returns on the table.

As demand for oil and gas persists while dwindling investment in production limits supply, prices are rising again, boosting producers’ profits….And discounts imposed on “brown” assets by the stock market, linked to sustainability factors rather than financial… create even more pockets of opportunity…The Economist has looked at 8 PE firms that have closed fossil-fuel deals in 2020-2021 The investors in some of their latest energy-flavored vehicles include 53 pension funds, 23 universities and 32 foundations. Many are from America, such as Teacher Retirement System of Texas, the University of San Francisco and the Pritzker Traubert Foundation, but that is partly because more institutions based there disclose pe commitments. The list also features Britain’s West Yorkshire Pension Fund and China Life. Over time, some investors may decide to opt out of funding their portion of fossil-fuel deals.

But a third, yet more opaque class stands ready to step in: state-owned firms and sovereign funds operating in the shadows. Last month Saudi Aramco, the Kingdom’s national oil company, acquired a 30% stake in a refinery in Poland, and Somoil, an Angolan group, bought offshore oil assets from France’s Total. In 2020 Singapore’s GIC was part of the group that paid $10bn for a stake in an Emirati pipeline.

Excerpts from Who buys the dirty energy assets public companies no longer want?, Economist, Feb. 12, 2022

Assigning Responsibility for Oil Leaks: Shell’s Deep Pockets

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Royal Dutch Shell’s  Nigerian subsidiary has been ordered on January 29, 2021 by a Dutch court to pay compensation for oil spills in two villages in Nigeria…The case was first lodged in 2008 by four Nigerian farmers and Friends of the Earth Netherlands. They had accused Shell and its Nigerian subsidiary of polluting fields and fish ponds through pipe leaks in the villages of Oruma and Goi.

The Court of Appeal in the Hague, where Shell has its headquarters, also ordered the company to install equipment to safeguard against future pipeline leaks. The amount of compensation payable related to the leaks, which occurred between 2004 and 2007, is yet to be determined by the court.  The case establishes a duty of care for the parent company to play a role in the pollution abroad, in this case by having the duty to make sure there is a leak-detection system…

Shell argued that the leaks were caused by sabotage…

In recent years there have been several cases in U.K. courts related to whether claimants can take matters to a parent company’s jurisdiction. In 2019, the U.K. Supreme Court ruled that a case concerning pollution brought by a Zambian community against Vedanta, an Indian copper-mining company previously listed in the U.K., could be heard by English courts. “It established that a parent company can be liable for the actions of the subsidiary depending on the facts,” said Martyn Day, partner at law firm Leigh Day, which represented the Zambians.

The January 2021 case isn’t the first legal action Shell has faced related to pollution in Nigeria. In 2014, the company settled a case with over 15,000 Nigerians involved in the fishing industry who said they were affected by two oil spills, after claims were made to the U.K. High Court. Four months before the case was due to go to trial Shell, which has its primary stock-exchange listing in the U.K., agreed to pay 55 million British pounds, equivalent to $76 million…  

The January 2021  verdict tells oil majors that “when things go wrong they will be held to account and very likely held to account where their parent company is based,” said Mr. Day, adding that the ruling could spark more such actions.

Excerpts from Sarah McFarlane, Shell Ordered to Pay Compensation Over Nigerian Oil Spills, WSJ, Jan. 29, 2021

No Clean-Up, No Justice: Ogoniland, Nigeria

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The UN Environment Programme in 2011 proposed the creation of a $1 billion fund to repair the damage done by decades of crude spills in the Ogoniland area in southeastern Nigeria. However, progress has been poor and the little work that has been done is sub-standard, advocacy groups including Amnesty International reported in June 2020.  “Research reveals that there is still no clean-up, no fulfillment of ‘emergency’ measures, no transparency and no accountability for the failed efforts, neither by the oil companies nor by the Nigerian government,” the groups said.

Shell’s Nigerian unit pumped oil in Ogoniland until 1993, when the company withdrew amid increasing protests against its presence. Even though the Hague-based company no longer produces crude in the area, a joint venture operated by Shell Petroleum Development Company, or SPDC, still owns pipelines that crisscross the region.

A government agency responsible for overseeing the clean-up, the Hydrocarbon Pollution Remediation Project, known as Hyprep, was finally set up in 2017 after several false starts, but it’s failing to deliver. …“Hyprep is not designed, nor structured, to implement a project as complex and sizable as the Ogoniland clean-up,” the report cites UNEP as saying in 2019

Excerpt from Clean Up Oil in Nigerial Lacks Progress, Bloomberg, June 18,, 2020

Left to their Own Bad Devices: the Future of Ogoni Land in Nigeria

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The decades-overdue clean-up of Ogoniland, after years of oil spills from the pipelines that criss-cross the region, is finally under way. But the billion-dollar project — funded by Nigeria’s national oil company and Royal Dutch Shell — is mired in allegations of corruption and mismanagement.  “We are not pleased with what is going on,” said Mike Karikpo, an attorney with Friends of the Earth International and a member of the Ogoniland team that negotiated the creation of the Hydrocarbon Pollution Remediation Project (Hyprep), the government body running the clean-up… 

Nigeria is Africa’s biggest oil producer, pumping out about 1.8m barrels per day. It provides roughly 90 per cent of the country’s foreign exchange and more than half of government revenues.  The clean-up began only the summer 2019, about a year after the first of an expected five tranches of $180m in funding was released to Hyprep. Mr Karikpo complains of a lack of transparency, alleging that planning, budgeting and awarding of contracts took place behind closed doors. Work started at the height of the rainy season, washing away much of the progress as contaminated soil collected for treatment was swept back into the environment…

Ogoniland, like the broader Niger Delta, has become more polluted and development has stalled, with little to show for the billions of dollars in crude that has been extracted. Critics have now accused Hyprep of being, like much of Nigeria’s oil sector, a vehicle for political patronage and graft. This year 16 companies were awarded contracts for the first phase of the clean-up, which — to the consternation of critics — focuses on the least contaminated parts of Ogoniland.

An investigation by the news site Premium Times found that almost all the companies were set up for other purposes, including poultry farming, car sales and construction, and had no experience of tackling oil pollution.  Meanwhile, insiders have questioned Hyprep’s capacity to handle such a massive project…

Shell and Hyprep have rejected the criticism.  Shell, which closed its Ogoniland operations in 1993, said it accepted responsibility “for spills arising from its operations”, but that some of the blame for the pollution must go to thieves who illegally tapped into pipelines and makeshift refining operations in the Delta’s creeks

Excerpts from Craft and Mismanagement Taint Nigeria’s Oil CleanUp, Financial Times, Dec. 29, 2019

Lawsuits Against Shell, Nigeria

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A Dutch appeals court ruled on December 18, 2015 that Royal Dutch Shell can be held liable for oil spills at its subsidiary in Nigeria, potentially opening the way for other compensation claims against the multinational. Judges in The Hague ordered Shell to make available to the court documents that might shed light on the cause of the oil spills and whether leading managers were aware of them.  This ruling overturned a 2013 finding by a lower Dutch court that Shell’s Dutch-based parent company could not be held liable for spills at its Nigerian subsidiary.

The legal dispute dates back to 2008, when four Nigerian farmers and the campaign group Friends of the Earth filed a suit against the oil company in the Netherlands, where its global headquarters is based.  “Shell can be taken to court in the Netherlands for the effects of the oil spills,” the court ruling stated on Friday. “Shell is also ordered to provide access to documents that could shed more light on the cause of the leaks.”  The case will continue to be heard in March 2016.  Judge Hans van der Klooster said the court had found that it “has jurisdiction in the case against Shell and its subsidiary in Nigeria”….

“There are 6,000km of Shell pipelines and thousands of people living along them in the Niger Delta,” he said. “Other people in Nigeria can bring cases and that could be tens of billions of euros in damages.”  In a separate case, Shell agreed in January to pay out £55m ($82 million) in out-of-court compensation for two oil spills in Nigeria in 2008, after agreeing a settlement with the affected community in the Delta.

Excerpt from Dutch appeals court says Shell may be held liable for oil spills in Nigeria, Guardian, Dec. 18, 2015.

 

Shell and the Oil Spills in Nigeria

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At Amnesty International and CEHRD’s request, the independent US oil pipeline specialist Accufacts assessed a number of oil spill investigation reports, as well as responses from oil companies operating in the Niger Delta and Nigeria’s national oil spill agency.  The expert found cases where the stated cause of an oil spill appears to be wrongly attributed to sabotage [by the local population]. In many other cases sabotage was listed as the cause when there was little or no data recorded to back up the claim.

Overall, Accufacts concluded that many official investigation reports were “technically incomplete”, and others “appear to be serving another agenda, more driven by politics…than pipeline forensic science”.  Nigeria’s under-resourced regulatory agencies have little oversight or control of the process and are dependent on the oil companies to carry out investigations.

In one incident, a regulator sent a student on work experience as their sole representative to an oil spill investigation.  “This is a system that is wide open to abuse – and abuse happens. There is no one to challenge the oil companies and almost no way to independently verify what they say. In effect it’s ‘trust us – we’re big oil,” said Gaughran.

Shell has made some improvements to its investigation reports since 2011, including the addition of images of oil spills on its corporate website. But serious flaws remain, including weaknesses in the underlying evidence used to attribute spills to sabotage.  Information listed in oil spill investigation reports determines whether oil companies are liable to pay compensation to affected communities.  Despite serious flaws, the reports are cited as evidence in litigation.

Amnesty International and CEHRD found evidence of Shell having changed the officially recorded cause of a spill after an investigation had taken place. In one incident, secretly filmed video of an investigation shows how officials from Shell and the regulator tried to subvert the evidence by persuading community members on the investigation team not to attribute the cause to equipment failure. Video footage of a leak from an oil spill in Bodo from 2008 reviewed by Accufacts shows that Shell seriously under-recorded the volume spilled.  Shell’s official investigation report claims only 1,640 barrels of oil were spilled in total but other evidence points to the amount being at least 60 times higher…

The report argues that companies should be legally liable for failure to take effective action to protect their systems, including from sabotage.

Amnesty International and CEHRD are calling on the oil companies to publish all investigation reports, associated photos and videos. They must provide verifiable evidence of the cause and damage to the impacted area.

Shell’s false claims on Niger Delta oil spills exposed, Amnesty International Press Release, Nov. 7, 2013

The Arctic Challenger: ready for Arctic oil spills

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Shell Oil has been building and testing equipment designed for the Arctic Ocean in Puget Sound, Seattle, United States.  In September, a key test of underwater oil-spill equipment was a spectacular failure.  It forced the energy giant to postpone drilling into oil-bearing rocks beneath the Arctic Ocean until next summer. Shell and its federal regulators have been tight-lipped about the failed test.  But a freedom-of-information request reveals what happened beneath the surface of Puget Sound.

Before Shell can drill for oil in the Arctic Ocean, it needs to prove to federal officials that it can clean up a massive oil spill there. That proof hinges on a barge being built in Bellingham called the Arctic Challenger.  The barge is only one component of Shell’s plans for handling oil spills off the remote north coast of Alaska. But the Obama Administration won’t let oil drilling get under way until the 36-year-old barge and its brand new oil-spill equipment are in place,  On board the Arctic Challenger is a massive steel “containment dome.” It’s a sort of giant underwater vacuum cleaner. If efforts to cap a blown-out well don’t work, the dome can capture spewing oil and funnel it to a tanker on the surface.

The Arctic Challenger passed several US Coast Guard tests for seaworthiness in September. But it was a different story when its oil-spill containment system was put to the test in 150-foot-deep water near Anacortes, Washington.  The federal Bureau of Safety and Environmental Enforcement required the test of the oil-spill system.

According to BSEE internal emails obtained by KUOW, the containment dome test was supposed to take about a day. That estimate proved to be wildly optimistic.

•Day 1: The Arctic Challenger’s massive steel dome comes unhooked from some of the winches used to maneuver it underwater. The crew has to recover it and repair it.

•Day 2: A remote-controlled submarine gets tangled in some anchor lines. It takes divers about 24 hours to rescue the submarine.

•Day 5: The test has its worst accident. On that dead-calm Friday night, Mark Fesmire, the head of BSEE’s Alaska office, is on board the Challenger. He’s watching the underwater video feed from the remote-control submarine when, a little after midnight, the video screen suddenly fills with bubbles. The 20-foot-tall containment dome then shoots to the surface. The massive white dome “breached like a whale,” Fesmire e-mails a colleague at BSEE headquarters.

Then the dome sinks more than 120 feet. A safety buoy, basically a giant balloon, catches it before it hits bottom. About 12 hours later, the crew of the Challenger manages to get the dome back to the surface. “As bad as I thought,” Fesmire writes his BSEE colleague. “Basically the top half is crushed like a beer can.”

Representatives of Shell Oil and of BSEE declined to answer questions or allow interviews about the mishaps. In an email, Shell spokeswoman Kelly op de Weegh writes:  Our internal investigation determined the Arctic Challenger’s dome was damaged when it descended too quickly due to a faulty electrical connection, which improperly opened a valve. While safety systems ensured it did not hit the bottom, buoyancy chambers were damaged from the sudden pressure change.

Environmental groups say the Arctic Challenger’s multiple problems show that Shell isn’t prepared for an Arctic oil spill.

Excerpt, By John Ryan, Sea Trial Leaves Shell’s Arctic Oil-Spill Gear “Crushed Like A Beer Can”, Kuow.org. Nov. 30, 2012