A Review of the Nigerian Energy Industry

Shell agrees to pay $1.1m in EPA settlement

Shell-Makes-Gulf-of-Mexico-Oil-Discovery06 September 2013, News Wires – Anglo-Dutch supermajor Shell has agreed to pay a combined $1.1 million in fines for a pair of air-quality violations related to its folly-plagued drilling campaign off Alaska last year.

The US Environmental Protection Agency, EPA, cited Shell for “numerous air permit violations” from the drillship Noble Discoverer and ice-class Kulluk in about two months of operation during the 2012 drilling season.

EPA levied the fines “based on EPA’s inspections and Shell’s excess emission reports”.

The supermajor agreed to pay $710,000 for 23 Clean Air Act violations on the Discoverer permit and $390,000 for 11 violations on the Kulluk permit, EPA said in a statement late on Thursday.

The fines were the latest blows for Shell, still feeling the fallout from an error-prone campaign in the Chukchi and Beaufort Seas, off the North Slope of Alaska.

Equipment problems led to drilling delays, forcing Shell to cease exploration with preliminary holes on just two of five wells planned for the drilling season.

The Discoverer, contracted from Noble Corp, was also detained for safety problems.

The 2012 campaign culminated with the grounding of the Kulluk in late December near Kodiak Island.

Shell said the travails will help the company “better understand” what it is up against off Alaska.

“For 2012 operations offshore Alaska, Shell accepted stringent emission limits that were based on assumptions and modeling,” spokesman Curtis Smith said in a statement.

“Following a season of operations, we now better understand how emissions control equipment actually functions in Arctic conditions.”

EPA slapped Shell with the Clean Air Act citations in January this year.

The violations include excessive hourly nitrogen-oxide emissions on the rigs and support vessels and lapses in use of emissions-cleansing equipment.

Shell has spent about $5 billion on its Alaska offshore programme. It has said it will likely hold off on plans to drill in Chukchi and Beaufort Seas this year.

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