SHELL OIL A record of environmental and corporate malfeasance June 2012 TABLE OF CONTENTS EXECUTIVE SUMMARY ................................................................................................................................................3 BRAZEN DISREGARD FOR WORKER SAFETY................................................................................................................6 US Workforce Deaths and Labor Violations ...........................................................................................................6 International Workforce Deaths and Safety Concerns ...........................................................................................6 UK’s North Sea ....................................................................................................................................................7 Norway ............................................................................................................................................................ 12 BLATANT DISREGARD FOR THE RIGHTS OF LOCAL COMMUNITIES ......................................................................... 17 Ogoniland, Nigeria ............................................................................................................................................... 17 United States ....................................................................................................................................................... 20 Pre-Arranged Crude Oil Trades on NYS Exchange ........................................................................................... 20 Overstatement of Oil Reserves Caused International Scandal ........................................................................ 20 Underpaying US Royalties on Federal Lands ................................................................................................... 21 Price Gouging in Poor Neighborhoods in the United States ........................................................................... 21 WORLDWIDE RECORD OF ENVIRONMENTAL VIOLATIONS ..................................................................................... 23 International Environmental Violations .............................................................................................................. 23 Ogoniland, Nigeria ........................................................................................................................................... 23 Canada ............................................................................................................................................................. 26 North Sea ......................................................................................................................................................... 28 Harris County, Texas ........................................................................................................................................ 29 Deep South ...................................................................................................................................................... 30 Puerto Rico ...................................................................................................................................................... 30 Western Washington State ............................................................................................................................. 30 Ridgewood, New Jersey ................................................................................................................................... 31 Riverside County, California ............................................................................................................................ 31 FINES, LAWSUITS AND PENALTIES ........................................................................................................................... 32 OSHA Violations – Washington State .................................................................................................................. 32 Exposing Employees to Fire, Explosion and Toxic Release Hazards ................................................................ 33 Failure to Appropriately Provide Safety Tools and Unsafe Working Conditions............................................. 33 Failure to Appropriately Train Employees ....................................................................................................... 34 Failure to Appropriately Test, Document and Implement Safety Measures .................................................. 35 OSHA Violations – California ............................................................................................................................... 37 1990s: Settling lawsuits, denying responsibility .................................................................................................. 40 SHELL UNPREPARED FOR POTENTIAL SPILLS IN AMERICA’S ARCTIC OCEAN .......................................................... 42 Limited Resources and No Proven Method to Clean Up Arctic Oil Spills ............................................................ 42 Shell Repeatedly Makes Unrealistic and Dubious Claims about Potential Arctic Drilling ................................... 44 2 EXECUTIVE SUMMARY Shell Oil Company cannot be trusted to safely drill in the Arctic Ocean, an extreme yet delicate and irreplaceable American treasure. Behind the company’s slick public relations campaign is a disturbing history that cannot be ignored as they rush to drill in one of the country’s last wild frontiers. An examination of Shell’s operations around the world makes it clear that the company operates with a brazen disregard for the safety of its own workers, the needs of local communities both here in the United States and internationally, and the long-term impact of drilling on the environment. Instead of taking responsibility for its actions, Shell simply pays fines and settles lawsuits. It seems that Shell considers lawsuits and clean-up costs just part of doing business, consequences to be paid while avoiding substantive changes to its operations that might interfere with the company’s efforts to maximize its already immense profits. Brazen Disregard for Worker Safety BY THE NUMBERS Shell Oil has one of the worst safety records of any company operating in either the United States or the United #1 mortality rate of any large western company Kingdom, with high fatality rates and inadequate safety in the US in 2007 preparation and planning. i £1 Million ($1.5 million) paid in fines and legal United States. A review of 2007 data found that Shell had costs in the UK from 2005 to 2011 the highest mortality rate of any large western oil company in the United States. In Washington state, after a blast at 25 violations of safety rules over six years in UK Puget Sound refinery killed six workers in 1998, Shell Investigated 207 times from 2006 to 2008 -- claimed to clean up their act. However, a review of Shell’s more than any other oil company in the UK workforce safety and health record in Washington shows repeated problems with employees exposed to fire, Fined at least $141,450 by OSHA since 2002. explosions and toxic release hazards, and a lack of proper safety equipment and training. In California, a series of personal injuries to Shell and contract workers that included serious burns from hot slurry oil - show a brazen disregard for safety. International. Shell’s international operations have come under scrutiny as well. The company’s North Sea operations have one of the worst safety records of any oil company operating in the UK, violating safety rules 25 times from 2005 to 2011 and spending at least £1 million ($1.5 million)i in fines and legal costs. Shell’s irresponsibility led to at least two preventable deaths, and forced a safety consultant hired by the company to publicly state that unless improvements were made “another major accident is inevitable.” The consultant noted that the company’s operations in the North Sea encouraged “a behavior of non-compliance” with safety rules and regulations. The company’s UK operations were investigated 207 times from 2006 to 2008. The company’s inadequate international safety efforts were highlighted more recently in December 2010, when an accident at Shell’s Draugen well in Norway damaged the well’s valve tree and left it with only one barrier remaining to prevent an oil spill. Though Shell claimed that the incident was not “serious” or in need of further scrutiny, an investigation by the Norwegian Petroleum Safety Authority found a series of safety concerns, including inadequate management, risk assessment, well barriers, well 3 barrier sketches, well control and daily reporting of drilling and well activities, all of which led to what the agency termed a “major accident situation.” Shell followed a “quick-fix philosophy,” Ole-Johan Faret, spokesperson for Norway’s Petroleum Safety Authority, said in an interview. “It is very clear that this is not an appropriate way to plan.” ii Blatant Disregard for the Rights of Local Communities Shell has a long track record of human rights violations and corporate malfeasance, both internationally and domestically. Ogoniland, Nigeria. The best example of Shell’s blatant disregard for the rights of local communities and human dignity is in Ogoniland, Nigeria, where the company’s close and complicated relationship with the Nigerian police and military led to a wide range of human rights violations. In