WASHINGTON, July 31 (UPI) -- U.S. congressional leaders said they had questions about the disclosure of risks facing companies like Royal Dutch Shell targeting arctic oil and gas reserves.
Ranking members of the House of Representatives Committees on Natural Resources and Financial Services issued a letter to the Securities and Exchange Commission seeking a review of corporate financial disclosures by oil and gas companies with offshore operations, particular in arctic waters.
When the federal government gave limited consent to Shell to start drilling operations off the coast of Alaska earlier this month, Rep. Raul Grijalva, D-Ariz., ranking member of the House natural resources committee, said Shell's campaign was "fruitless."
When issuing the letter to the SEC, Rep. Alan Lowethal, R-Calif., a member of the natural resources committee, said there were concerns about how transparent companies like Shell were about what's at stake with arctic campaigns.
"Full disclosure of risk is essential to good decision-making by the public and without it our markets cannot function properly," he said in a statement. "I am concerned that oil and gas companies may not be disclosing their full risk exposure to the public."
Shell's early efforts off the coast of Alaska were plagued by equipment issues. Recent federal permits for the company excluded drilling into oil-bearing zones because the company lacked a critical piece of safety equipment called a capping stack.
Despite a high-profile campaign from Greenpeace, the ship chartered to carry the capping stack, MV Fennica, is on its way to the drilling site after repairs in Oregon.
The Dutch supermajor said it was moving forward with offshore Alaska efforts that would address "the high bar that stakeholders and regulators expect of an arctic operator."
Few Republican voices have emerged in opposition to Shell's arctic campaign. In June testimony before the House, Erik Milito, director of exploration and production for the American Petroleum Institute, said exploiting arctic reserves should be a national priority.
Michael LeVine, a senior counsel on the Pacific region for advocacy group Oceana who testified alongside Milito in June, said in an emailed statement Shell's arctic ambitions should be a concern to investors and regulators alike.
"Full disclosure of the risks of oil and gas operations in the Arctic is essential to good decisions for companies, the government, and the public," he said. "The SEC has an important role to play in ensuring that all of the risks of oil and gas operations in the Arctic are adequately disclosed and evaluated."
