Royal Dutch Shell

Although Shell has made efforts in recent years to adopt some more environmentally conscious policies, many of its facilities around the world have been major sources of pollution and the sites of serious accidents.

For example, during the 1980s Shell Oil’s refinery in Martinez, California near San Francisco experienced numerous fires and major spills. In 1986 some 48,000 gallons of toxic waste water spilled into a local waterway. Local authorities fined the company $75,000, saying Shell had been negligent in not repairing a stuck valve. Two years later, some 440,000 gallons of crude oil were spilled at Martinez, contaminating wetlands and 11 miles of shoreline. Shell, which did not report the accident for four weeks, entered into a consent decree with the U.S. Environmental Protection Agency and California officials in 1989. The settlement included a payment of $19.8 million by the company.

Shell Oil and the U.S. Army were found liable in 1985 for large-scale environmental contamination at the Rocky Mountain Arsenal near Denver. The army built the plant during the Second World War to make nerve gas, and Shell leased part of the site in the early 1950s to produce pesticides, ceasing operations in 1982. Local residents reported a variety of symptoms such as miscarriages and chronic nausea they said were linked to the dumping of toxics and carcinogens by Shell and the Army. A Colorado official called it "one of the most contaminated sites on the planet." Shell spent years fighting with the Army, its insurance companies, and environmental authorities about financial responsibility for the clean-up.

Shell's Norco Manufacturing Complex in Louisiana ranked 2nd among all industrial facilities in the United States in terms of toxic releases in 1988. The following year there was a huge reduction in such releases because of the adoption of a new process to convert toxics to a marketable product. In May 1988 an explosion at the refinery in Norco had killed seven workers. The U.S. Occupational Safety and Health Administration fined the company $3,000 for safety violations in connection with the accident. Shell paid out more than $40 million in damages to settle suits brought by injured workers and the families of those killed.

In 1989 there was a major explosion at a North Sea offshore oil platform partly owned by Royal Dutch Shell. This was only one of a series of explosions at North Sea facilities, which the company blamed on worker carelessness and union officials said were the result of cost-cutting efforts by management.

In the United Kingdom Royal Dutch Shell came under fire because of reports that its Permithrin product, used as a mothproofing agent in the carpet and wool processing industry, had caused significant water pollution in several rivers. Also in Britain, a problem at a company pipeline led to the 1989 spill of some 10,000 gallons of crude oil in the River Mersey. The company was fined a record £1 million.

In 1991 Shell was one of ten major oil companies in the United States cited by the Environmental Protection Agency for discharging contaminated fluids from service stations into or directly above underground sources of water. The company paid a fine of $56,000 and agreed to clean up the sites by the end of 1993.

In 1995 Shell agreed to pay $3 million to settle a lawsuit brought by the California Public Interest Research Group charging that the company had dumped illegal amounts of selenium into San Francisco Bay and the Sacramento-San Joaquin River Delta.

In 1995 Royal Dutch Shell was also the target of a boycott and other protests in Europe over a plan by the company and its joint venture partner Exxon to sink an obsolete offshore oil storage facility known as Brent Spar in the North Sea rather than dismantling it. Environmental groups, led by Greenpeace, warned that the structure, which contained oil sludge, heavy metals and some low-grade radioactive waste, could damage the food chain for fish in the area. The company gave in the pressure and brought the Brent Spar to shore.

In 1998 Shell Oil agreed to pay $1.5 million to settle federal charges that its refinery in Roxanna, Illinois was responsible for illegal discharges of pollutants into the Mississippi River. That same year Royal Dutch Shell was fined £20,000 for an oil spill in the Manchester Ship Canal in Britain.

In 2001 Shell Oil and three other major petroleum companies settled a lawsuit filed in California by agreeing to clean up some 700 sites in the state that had been contaminated by the gasoline additive MTBE.

In 2002 a judge in Nicaragua ordered Royal Dutch Shell, Dow Chemical and Dole Food to pay US$489 million to a group of about 500 workers who had charged that the pesticide DBCP— produced by Shell and Dow and used by Dole—had rendered them sterile and caused other adverse health effects. After the companies refused to pay, the workers filed suit in the United States (where the pesticide had been largely banned in the late 1970s). But a federal judge declined to enforce the verdict against Shell.

In 2005 Shell was fined £900,000 in connection with the 2003 deaths of two workers on a North Sea oil platform as the result of a major gas leak.

In the late 2000s, Royal Dutch Shell found itself facing increasing criticism for its huge liquefied natural gas project on the island of Sakhalin in the Russian Far East. Pacific Environment, a San Francisco-based advocacy group collaborated with Russian activists to form Sakhalin Environment Watch, which challenged the offshore Sakhalin project because it threatened the survival of the world’s most endangered species of whales—Western Pacific Grays.

The situation became more complicated in late 2006, when Shell was forced by Russia to sell half of its holdings in the project at a bargain-basement price to Gazprom, which is publicly traded but controlled by the Russian government. This gave Gazprom a majority stake of 55 percent, with Shell’s interest reduced to 27.5 percent. The holdings of the other partners, Mitsui and Mitsubishi, were also slashed. In 2008 the British newspaper The Observer reported that it had obtained dozens of internal e-mails showing that Shell officials in London sought to influence the conclusions of a purportedly independent environmental review of the Sakhalin project.

In 2007 the Argentina government ordered the closure of a refinery operated by a Shell subsidiary in Buenos Aires because of leaks, soil contamination and other environmental problems. The facility was allowed to reopen after the company prepared a clean-up plan.

In 2007 a U.S. federal appeals court temporarily blocked a plan by Shell Oil to initiate offshore oil drilling in the Beaufort and Chukchi seas off the coast of Alaska. The order came in response to petition from environmental and community groups concerned about the impact of the drilling on Native subsistence fishing. Although the order was later vacated, Shell postponed the launch of the operation.

In 2008 Shell UK Oil Products was fined £300,000 and ordered to spend millions more on improvements at its Liverpool refinery in connection with a 2003 gas leak.

In 2005 Motiva Enterprises, a joint venture of Royal Dutch Shell and Saudi Aramco, announced plans for a vast expansion of its refinery in Port Arthur, Texas. The existing facility had been the target of protests by local groups such as Community In-power Development Association (CIDA) over the high level of toxic releases. CIDA’s campaign in opposition to the expansion was suspended after Motiva agreed to spend $3.5 million on health and air quality projects. In 2009 the $7 billion expansion was postponed for at least a year because of weak market conditions.

Over the past decade, Royal Dutch Shell has been repeatedly targeted by advocacy groups such as Friends of the Earth because of what the groups called a pattern of environmental and human rights abuses around the world. In 2003 FoE issued an alternative annual report on the company and staged a protest at its annual meeting in London.

In 2007 the Shell Accountability Coalition issued an updated counter-report that looked at the Sakhalin controversy noted above, the Nigeria controversy described in the Human Rights section below and other environmental issues involving its SAPREF refinery joint venture in South Africa, its planned Corrib gas pipeline and refinery project in Ireland, its Pandacan joint venture oil depot in a heavily populated section of Manila in the Philippines, and lingering contamination from formerly owned facilities in places such as Sao Paulo, Brazil; Curaçao, Netherland Antilles; and Barbados. The campaigners called on the company to use some of its record profits to “clean up its mess.”

A 2009 report called Shell’s Big Dirty Secret published by Friends of the Earth Europe concluded that it is “the most carbon intensive oil company in the world.”

Among other things, that report based its conclusion on Shell’s large role in the highly controversial Canadian tar sands projects. Shell owns 60 percent of the huge Athabasca Oil Sands project in Alberta (Chevron and Marathon have the rest). It also controls two smaller projects called Peace River and Cold Lake.

Numerous analyses have found that using tar sands as a fuel source requires massive quantities of natural gas, making the entire process highly inefficient. It also results in large emissions of greenhouse gases. A report by WWF and the Pembina Institute called tar sands “among the most environmentally costly sources of transport fuel in the world.”

In 2009 opponents tried to get Canadian regulators and then the courts to block Shell’s plan to expand its tar sands operations but were unsuccessful. In September and October 2009 Greenpeace protesters staged a series of occupations and other actions at Shell’s tar sand facilities.

See also the discussion of Nigeria in Human Rights section.