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Shell to Pay U.S. $1.1 Million for Arctic Air Pollution

Royal Dutch Shell Plc (RDSA) agreed to pay $1.1 million for violating permits regulating air pollution from its oil-exploration fleet in the Arctic Ocean last year.

The settlement announced by the Environmental Protection Agency said that vessels scouting for oil in Alaska’s Beaufort and Chukchi seas for two months in 2012 didn’t use all mandated pollution-control or monitoring equipment. The EPA had set the requirements as a condition for issuing a permit for Shell’s Arctic exploration.

“Based on EPA’s inspections and Shell’s excess emission reports, EPA documented numerous air permit violations for Shell’s Discoverer and Kulluk drill ship fleets,” the agency’s Seattle office said in a statement late yesterday.

Shell suspended its Arctic operations after a series of mishaps in 2012 as it sought oil off Alaska’s North Coast. In December, the drill ship Kulluk broke free of a tow boat in a storm and was stranded on an uninhabited Alaska island. In September, a containment dome designed to cap spills had difficulty getting certified and was damaged during tests.

The air permit violations are a separate from the failed tow and containment device. The fines are $710,000 related to the Discoverer and $390,000 for the Kulluk, the EPA said.

“Shell accepted stringent emission limits that were based on assumptions and modeling,” Kelly op de Weegh, a Shell spokeswoman, said in an e-mail. “Following a season of operations we now better understand how emissions control equipment actually functions in Arctic conditions.”

“The EPA did not allege any negative impact from Shell’s emissions to local populations, nor did Shell exceed its overall allowable annual emissions for the operating season,” she said.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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