Shell To Pay $1.1 Million Fine For Polluting Arctic Air


Royal Dutch Shell plc, the world’s largest oil company, will pay $1.1 million to settle air-quality violations made during two oil-exploration activities in the Arctic Ocean last year, according to a Reuters report.

The settlement was announced by the U.S. Environmental Protection Agency last week, after an investigation found that Shell vessels scouting for oil in Alaska’s Beaufort and Chukchi seas in 2012 had not been equipped with mandated pollution-control or monitoring devices.

“Based on EPA’s inspections and Shell’s excess emission reports, EPA documented numerous air permit violations for Shell’s Discoverer and Kulluk drill ship fleets,” the EPA said in a statement, cited by Bloomberg.

The EPA recorded 23 violations connected to the Noble Discoverer, a 571-foot drill ship, and assessed $710,000 in penalties. The agency also noted 11 violations for the Kulluk, a 266-foot diameter circular barge, assessing $390,000 in penalties.

As part of their permit from Clean Air Act, Shell were required to have emissions control and monitoring equipment onboard their vessels in the Arctic. The air permit violations were also separate from costs incurred by the company when their two vessels ran into a series of mishaps – including a failed tow and a damaged containment device – which forced them to abandon their drilling plans in the region.

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The U.S. Department of Interior now plans to issue new rules for Arctic drilling by the end of the year. Shell spokeswoman Kelly op de Weegh told Bloomberg however that the EPA fine did not necessarily mean that the company had caused excessive pollution in the Arctic.

“The EPA did not allege any negative impact from Shell’s emissions to local populations, nor did Shell exceed its overall allowable annual emissions for the operating season,” she said.

“Shell accepted stringent emission limits that were based on assumptions and modelling. Following a season of operations we now better understand how emissions control equipment actually functions in Arctic conditions”, de Weegh added.

Environmental groups on the other criticised the company for not acknowledging the risk of drilling in the remote region.

“Shell downplays the ugly effects of its lack of preparedness for Arctic drilling, but these fines tell a different story,” said Rebecca Noblin of the Center for Biological Diversity in Anchorage to the Associated Press.

“The Arctic environment is significantly harsher and more dynamic than Shell has accounted for. Unless the Obama administration puts a stop to Arctic drilling, companies like Shell will continue to foul the Arctic air and water.”

Shell has spent nearly $5 billion on permits, personnel and equipment in its effort to drill in U.S. Arctic waters. The U.S. federal government estimates that there are at least 26 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas in U.S. Arctic waters alone.

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