Two looks at how regulators hurried to get Shell its permit for Arctic oil rigs

REUTERS/Jason Redmond
In May 2015 activists protest Shell's drilling rig Polar Pioneer, parked at Terminal 5 at the Port of Seattle.

Ambitious enterprise journalism turns up in interesting, out-of-the-way places these days, and a stirring case in point was published Wednesday at audubon.org, website of the National Audubon Society.

The Inside Story of Shell’s Arctic Assault” documents myriad ways in which federal regulatory overseers bent procedure, budgets and staff professionals’ morale to accommodate the oil giant’s initiative to sink offshore wells in the Chukchi Sea last summer.

As you can tell from the title, this is also a piece of journalism grounded in a point of view about the wisdom of seabed drilling in arguably the most difficult conditions and most fragile environment on earth.

But that doesn’t diminish the article’s value in my view. And it certainly doesn’t hurt the credibility of the piece or its author, Barry Yeoman, that the Department of Interior’s inspector general has just released its own review of the Bureau of Ocean Energy Management’s work on Shell’s Lease 193 – often documenting similar problems with the process.

It’s worth remembering at the outset that the BOEM is the Interior agency created to replace the Minerals and Management Service, disgraced in the wake of the Deepwater Horizon debacle by revelations about its weak oversight of oil companies that it was more or less in bed with (at the staff level, sometimes literally).

Among other things, the reorganization split MMS’s dual responsibilities for collecting royalties with one hand and regulating oil production with the other, assigning the latter to BOEM in October 2011.

By that time, Royal Dutch Shell had held Lease 193 for about 3½ years. But legal challenges to offshore arctic drilling in general, and Shell’s lease in particular, went back much further. Time after time, plaintiffs (including Aububon at some points) challenged the adequacy of environmental review and the courts agreed.

On BOEM’s watch, Yeoman writes, actions documented in the official records “point to a regulatory system that, while tougher than before the 2010 Deepwater Horizon explosion and BP oil spill in the Gulf of Mexico, still cut corners and stretched its own capacity in order to accommodate Shell’s drilling timeline. “

While U.S. Fish and Wildlife Service Scientists fought to protect marine mammals, they did so under crushing time constraints and at the expense of other conservation efforts. Meanwhile, at the Interior agency tasked with approving Shell’s oil leases and exploration plan, the Bureau of Ocean Energy Management (BOEM), decision makers authorized overtime, weekend, and holiday work to deliver Shell a speedy decision, while failing to keep pace with climate and ecosystem science.

A key source for Yeoman was Christopher Putnam, a wildlife biologist with FWS who has worked on protections of marine mammals in arctic Alaska for six years. His responsibilities included reviewing the adequacy of safeguards in Shell’s plans for drilling platforms in the Chukchi, especially in regard to the 129,000 Pacific walruses that breed and calve there.

Earlier this year, as pressure was building to complete review of Shell’s Lease 193 plans in time for the summer drilling season, he heard a shift of emphasis in conference calls convened to discuss the work.

Some people were working on various options—how we could interpret our regulations in such a way that were favorable that would allow Shell to do what they wanted to do. When there’s discussion about changing the meaning of the regulations specifically to accommodate a company like Shell, then that started to become concerning for me.

These discussions that were taking place behind the scenes, with no input or public accountability, were getting to the point that I simply wanted to put on the record that I had concerns.

He sent a memo to his superiors, challenging the accommodations as “disingenuous, mendacious and unethical,” perhaps even illegal: “Shell insists it is not they who must comply with Federal regulations, but we who should change the regulations to accommodate Shell.”

Similar complaints from a variety of staffers who worked on the review are documented in the report of the Interior Department’s Office of Inspector General (OIG), published in redacted form on Monday under the title, “Investigative Report of Management Interference with Lease 193 EIS.”

Among these was a sociocultural specialist at BOEM who became “concerned enough about how her work product was being altered by BOEM management that she requested that her name be removed from the final EIS because it no longer represented her analysis, findings, or conclusions.”

She explained that she and the other analysts were initially instructed by the BOEM managers leading the SEIS effort to cut and paste large amounts of the language that was previously published in the Lease Sale 193 EISs for their new SEIS sections. The sociocultural specialist said that she attempted cutting and pasting from the sections that she was  responsible for but she quickly realized that the previous EIS versions did not contain any scientific research to support the findings. Accordingly, she needed to first identify scientific research and studies that pertained to her sections of responsibility and then entirely rewrite her sections and make conclusions based on the research and studies she identified.

The sociocultural specialist stated that by September 2014 she had already logged over 100 hours of compensatory time beyond her normal work schedule. She said that all of the other analysts similarly worked a considerable amount of overtime on the SEIS due to the ambitious schedule set by BOEM management. She said that she completed her sections and submitted them for management review on Friday, October 3, 2014.

When the sociocultural specialist’s supervisor returned her sections to her following his review, the sociocultural specialist noted that her public health section had been “gutted.” She said that her supervisor had removed all of the material she had included that explained what the section encompassed and how she analyzed the applicable research to reach the section’s conclusions. Her supervisor had also removed all of the diagrams she had created to help explain her findings.

According to the sociocultural specialist, her supervisor told her that “no one in management understood [the] public health section” and it was “too long.”

At that point the specialist resigned from the agency, reasoning that if managers didn’t understand what she had written, they weren’t in a good position to rewrite it. That made her one of six, by Yeoman’s count, to quit over the handling of Lease 139 (Putnam not among them).

According to the OIG, employees were troubled not only by the work pressure but by a conviction that science was being distorted to give Shell its green light – that, in fact, the decision had been made before the review was finished. Of course, no clear evidence of either could be found.

As for Shell, it has temporarily suspended its operations in the Lease 193 area after a series of mishaps in its arctic operations and a disappointing dry hole drilled this past July.

But as Yeoman notes, that’s not the end of the story by any means. Shell’s leases are good for four more years; BOEM has a draft plan for offering new offshore oil leases in 2020; Congress may act to mandate a rollout of new leases starting in 2023 regardless of environmental risks and the results of environmental review.

For that last item we can thank Alaska’s Sen. Lisa Murkowski, who against all evidence to the contrary considers the Obama administration’s handling of Alaskan oil development to be characterized by “a destructive pattern of hostility.”

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Comments (2)

  1. Submitted by Neal Rovick on 12/10/2015 - 12:35 pm.

    Too little, too late ?

    Royal Dutch Shell acknowledges 4 to 6 degree celsius temperature rise is probable:

    (quote)

    Royal Dutch Shell has been accused of pursuing a strategy that would lead to potentially catastrophic climate change after an internal document acknowledged a global temperature rise of 4C, twice the level considered safe for the planet.

    A paper used for guiding future business planning at the Anglo-Dutch multinational assumes that carbon dioxide emissions will fail to limit temperature increases to 2C, the internationally agreed threshold to prevent widespread flooding, famine and desertification.

    Instead, the New Lens Scenarios document refers to a forecast by the independent International Energy Agency (IEA) that points to a temperature rise of up to 4C in the short term, rising later to 6C.

    http://www.theguardian.com/environment/2015/may/17/shell-accused-of-strategy-risking-catastrophic-climate-change

    (end quote)

    and from Exxon:

    (quote)

    ExxonMobil, the world’s biggest oil company, knew as early as 1981 of climate change – seven years before it became a public issue, according to a newly discovered email from one of the firm’s own scientists. Despite this the firm spent millions over the next 27 years to promote climate denial.

    The email from Exxon’s in-house climate expert provides evidence the company was aware of the connection between fossil fuels and climate change, and the potential for carbon-cutting regulations that could hurt its bottom line, over a generation ago – factoring that knowledge into its decision about an enormous gas field in south-east Asia. The field, off the coast of Indonesia, would have been the single largest source of global warming pollution at the time.

    “Exxon first got interested in climate change in 1981 because it was seeking to develop the Natuna gas field off Indonesia,” Lenny Bernstein, a 30-year industry veteran and Exxon’s former in-house climate expert, wrote in the email. “This is an immense reserve of natural gas, but it is 70% CO2,” or carbon dioxide, the main driver of climate change.

    However, Exxon’s public position was marked by continued refusal to acknowledge the dangers of climate change, even in response to appeals from the Rockefellers, its founding family, and its continued financial support for climate denial. Over the years, Exxon spent more than $30m on thinktanks and researchers that promoted climate denial, according to Greenpeace.

    Exxon said on Wednesday that it now acknowledges the risk of climate change and does not fund climate change denial groups.

    http://www.theguardian.com/environment/2015/jul/08/exxon-climate-change-1981-climate-denier-funding

    (end quote)

  2. Submitted by Tom Karas on 12/15/2015 - 06:55 am.

    thanks for the story Ron

    and for the well articulated comment Mr Rovick. Most everything we suspected of the fossil fuel folks is indeed coming true.

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