Shell tries to skirt potential court challenges

John Dimsdale Mar 1, 2012

Kai Ryssdal: Crude oil closed at almost $109 a barrel today. Worries over problems with Iran and what turned out to be unfounded rumors of a Saudi pipeline explosion tipped the scales higher. Elsewhere in the never-ending story of how to get those price lower, Shell Oil has gone to court in Alaska. It’s trying to preempt what it calls time consuming lawsuits from environmental groups. The company’s asking a federal court to review its already tenatively-approved plans to drill in the Alaskan Arctic this summer.

Marketplace’s John Dimsdale reports.

John Dimsdale: Summer is the only time when oil exploration is possible in Alaska’s Arctic Ocean. Shell spokeswoman Kelly op de Weegh says the company is worried that a springtime court challenge will mean a year’s delay.

Kelly op de Weegh: It just makes good business sense to do this now. After investing $4 billion we want to responsibly develop that significant energy resource and create thousands of jobs.

Shell’s unprecedented attempt to expedite court action is merely paving the way for its environmental opponents, says Kyle Cooper with IAF Advisers in Houston.

Kyle Cooper: Certainly as that gets filed and it gets circulated, then those who would oppose it now are on watch to go round up their troops and file counter-suits against it.

Attracting public attention just might be the method behind Shell’s legal madness. With gasoline prices heading north of $4 a gallon, Shell is trying to strike while public sentiment is behind more domestic production, says Carl Larry with the New York research firm Oil Outlooks and Opinions.

Carl Larry: People are gonna say, “Let’s try to find a way to get prices lower.” And if Shell has a good argument here, they’re going to get public sentiment on their side. We might say, “Look we’re willing to not bring it from Canada on a pipeline, but we do need to bring it from Alaska where we already have pipelines.”

Plus, Larry says, by filing first, Shell gets to choose the court venue in relatively oil-friendly Alaska.

In Washington, I’m John Dimsdale for Marketplace.

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