Groups Seek US SEC Probe of Shell Arctic Drilling Risk Disclosures

An environmental group and a law clinic petitioned the U.S. Securities and Exchange Commission to investigate whether Royal Dutch Shell has adequately disclosed to investors the risks of oil exploration in the harsh Arctic waters, the groups said on Tuesday.

 

The U.S. Interior Department is mulling whether Shell can drill test wells for crude and gas off Alaska this summer. The company abandoned exploratory drilling efforts in 2012, an accident-plagued season in a region with little infrastructure for emergency response.

 

Oceana, an international environmental group, and the Abrams Environmental Law Clinic at the University of Chicago, said the action they filed on Monday is part of a longer effort to get Shell to disclose risks to investors of the costs of any catastrophic oil spill and other potential accidents.

 

"There is no proven way to clean up a spill in the icy Arctic conditions and Shell has an obligation to make investors aware of that," said Andrew Sharpless, CEO of Oceana.

 

While catastrophic oil spills are rare, one in the Arctic could cost $10 billion or more to clean up due to the low temperatures, ice and lack of infrastructure, the law clinic said.

 

Shell did not have an immediate response to questions about the action.

 

Despite a steep drop in global crude prices, several energy companies covet the long-term potential of the Arctic's oil and gas riches. The U.S. government estimates the Arctic contains about 20 percent of the world's undiscovered oil and gas, with some 34 million barrels of oil in U.S. waters alone.