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File:  ltr to Congress, 76 scientists 2012.pdfResource Type: Letters

File:  ltr to Congress, 76 scientists 2012.pdfResource Type: Letters

A new daily investigation into the documents behind the battle over Shell, oil pollution and accountability in the Niger Delta

Tomorrow we begin something substantial.

Over the coming days and weeks, we will be examining a remarkable collection of documents concerning Shell’s operations in Nigeria, oil pollution in the Niger Delta, pipeline integrity, oil theft, environmental damage and what senior personnel inside the company knew about the problems confronting its operations.

And we intend to examine them one story at a time.

Not with slogans.

Not by pretending allegations are proven facts.

And not by accepting corporate explanations without examining the documentary record behind them.

Our starting point is material made publicly available by Nigeria’s Human and Environmental Development Agenda — HEDA Resource Centre.

Who is HEDA?

HEDA — the Human and Environmental Development Agenda — is a Nigerian non-governmental and non-partisan civil-society organisation whose work encompasses good governance, environmental sustainability, human rights and social justice.

It has been operating for more than two decades and has been active on environmental accountability in the Niger Delta, including questions surrounding pollution, extractive industries and the responsibilities of multinational oil companies.

In June 2026, HEDA publicised newly released Shell documents which it said raised serious questions about the management of environmental risks and pollution associated with Shell’s historic Nigerian operations.

Those papers are now publicly accessible through HEDA’s website.

And they deserve to be read.

Carefully.

What are these Shell documents?

The collection contains internal Shell material disclosed in connection with litigation concerning pollution in the Niger Delta.

That distinction is important.

These are not simply newspaper allegations about what somebody believes Shell may have done.

They include corporate documents, internal communications, technical material and management discussionswhich can be compared with Shell’s public statements, its operating standards and the allegations being advanced by Nigerian communities and campaign organisations.

Their existence does not mean every accusation against Shell is automatically proved.

Nor does an internal email necessarily provide the complete context surrounding a complicated operational decision.

But corporate records can tell us something extraordinarily valuable:

what people inside the organisation were saying when they were not writing press releases for the public.

That is why we are interested.

What we are going to do

Beginning tomorrow, we intend to publish one investigation every day based upon this documentary record.

Each article will concentrate on a particular issue.

Among the questions raised by the material are:

• What did Shell know about the condition of important Niger Delta pipelines?
• Why were large numbers of clamps apparently being used on sections of infrastructure?
• What did internal assessments say about ageing pipelines and replacement schedules?
• What happened when illegal oil connections were discovered?
• Were pipelines allowed to continue operating despite known environmental risks?
• How effective was Shell’s leak-detection capability?
• How reliable were investigations used to decide whether spills resulted from equipment failure or sabotage?
• What concerns existed internally about contractors, employees and oil theft?
• What were senior managers being told about pollution visible across creeks and mangrove areas?
• What did Shell estimate eventual decommissioning and remediation might cost?
• And how much responsibility remained when Shell ultimately moved to divest its Nigerian onshore interests?

Some of those questions may produce uncomfortable answers.

Others may turn out to be more complicated than the headlines suggest.

We intend to publish both.

We are not going to pretend sabotage did not exist

Any credible examination of Shell’s Nigerian history must acknowledge the enormous problem of crude-oil theft, illegal pipeline connections, sabotage and makeshift refining in the Niger Delta.

Shell has repeatedly argued that third-party interference has been responsible for a substantial proportion of oil spilled from its facilities.

That evidence must be considered.

But invoking sabotage does not end the inquiry.

It begins another one.

Once an operator knows that pipelines have been compromised, what does it do?

Does it shut them down?

Repair them?

Replace them?

Continue pumping?

What risks are considered acceptable?

Who makes those decisions?

And what happens to communities living beside the infrastructure while those decisions are being taken?

Those are questions corporate press releases cannot answer on their own.

Internal records sometimes can.

Shell will have its say

This series will not operate on the assumption that an accusation is a verdict.

Shell disputes important interpretations being placed upon the disclosed material.

The company has argued that extracts from internal documents can produce a misleading picture when divorced from the exceptionally difficult operating environment in the Niger Delta, including sabotage, organised oil theft and illegal refining.

Those responses matter.

Where Shell has offered a material explanation, rebuttal or alternative interpretation, we will report it.

Where something remains an allegation, we will call it an allegation.

Where litigation remains unresolved, we will say so.

Where we draw an inference from documentary evidence, we will identify it as an inference.

That is not deference to Shell.

It is how serious documentary investigation should be conducted.

But we will also call things what they are

Objectivity does not require timidity.

If an internal document reveals something extraordinary, we will say that it is extraordinary.

If corporate conduct appears difficult to reconcile with public assurances, we will examine the contradiction.

If people inside Shell were warning colleagues about environmental consequences, pipeline conditions or reputational risks, readers deserve to know exactly what those warnings said and when they were made.

And if the documents ultimately support Shell’s explanation on a particular issue, we will say that too.

The objective is not to manufacture a predetermined conclusion.

The objective is to expose the record.

One document trail. One investigation every day.

There is too much material here to compress into a single article.

Doing so would probably reproduce the very problem that makes large documentary releases difficult for the public to understand: sensational quotations appear, the story moves on, and the underlying evidence disappears into hundreds or thousands of pages.

We intend to do the opposite.

One issue.

One documentary trail.

One article.

Every day.

By the time this series is finished, readers should be able to see not merely isolated extracts but the much larger picture emerging from Shell’s own historical records and the evidence surrounding them.

Tomorrow we begin with perhaps the most fundamental question of all:

What happens when an oil company knows continued production could mean further environmental damage — and keeps the oil flowing?

The documents have something to say about that.

So will we.

The Shell Nigeria Files begins tomorrow.

Source note

The underlying Shell-document collection has been published online by HEDA Resource Centre, alongside reporting and analysis concerning the disclosed material. HEDA describes itself as a Nigerian civil-society organisation working on good governance, environmental sustainability and social justice.

This series is independently written from the source material. Publication of or reliance upon a document does not mean that every interpretation advanced by HEDA, campaign organisations, litigants or Shell is adopted by this site.

Site wide disclaimer also applies.

COMING TOMORROW: Inside the Shell Nigeria Files was first posted on August 12, 2026 at 9:33 am.
©2018 "Royal Dutch Shell Plc .com". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at john@shellnews.net

THE SHELL LEAKS FILES SLF-2007-024 The Sakhalin Papers XIV: The Whales, the Scientists and the Financing Test

Archive reference: SLF-2007-024
Collection: The Sakhalin Papers
Principal record: IUCN Independent Scientific Review Panel records; Sakhalin Energy responses; Shell Sustainability Report 2005; European Bank for Reconstruction and Development records
Supporting record: UK Parliamentary material, High Court proceedings and contemporaneous press reporting
Evidence standard: Scientific findings, company statements, lender decisions, court records and campaign commentary are distinguished throughout. A lender’s decision that project documentation was suitable for consultation is not treated as a decision to finance the project.

Introduction

By 2005, the fate of approximately one hundred whales had become entangled with the financing of one of the world’s largest oil and gas developments.

The Western North Pacific gray whale population feeding off north-eastern Sakhalin Island was then classified by IUCN as critically endangered. The independent scientific review convened by IUCN recorded a population of roughly 100 animals and perhaps only 20–25 reproductively active females. At the same time, Sakhalin Energy was constructing platforms, pipelines and associated infrastructure in and around their feeding habitat.

This was not simply an argument between Shell and environmental campaigners.

Independent scientists were involved. Potential lenders were involved. The US Export-Import Bank hosted discussions. The European Bank for Reconstruction and Development was carrying out due diligence. British ministers were being questioned in Parliament. Years later, the environmental controversy surrounding Sakhalin-2 would also appear in High Court proceedings concerning the disclosure of UK government records.

And the surviving documents establish something particularly important.

The scientists were not merely producing reports for public consumption.

Potential financiers were reading them.

1. The Whale Problem Was Already a Financing Problem

The preceding archive file examined Britain’s Export Credits Guarantee Department and its consideration of support for Sakhalin-2.

The whale issue sat directly inside that financing process.

On 5 March 2004, UK Trade Minister Mike O’Brien told Parliament that Sakhalin Energy’s proposed offshore pipeline would cross the southern part of the whales’ northern feeding ground. He said ECGD wanted reassurance that the potential impact would be minimised and repeated that support would be approved only if the issues had been satisfactorily addressed.

That statement matters because it fixes the chronology.

Before IUCN’s major independent review appeared in 2005, the whale habitat was already being treated by a prospective government lender as an issue capable of affecting a financing decision.

The environmental question and the money question had become inseparable.

2. Sakhalin Energy Asked IUCN to Convene Independent Scientists

The scientific process itself should be described fairly.

Sakhalin Energy did not simply ignore the existence of the whales. It initiated an independent review process, with IUCN convening a panel of specialists to assess the risks posed by Sakhalin II Phase 2 and possible measures for reducing them. IUCN’s archive says the panel examined conservation risks in the context of a population numbering only about 100 animals.

The scientists also acknowledged substantial expenditure and research by Sakhalin Energy. The 2005 review recorded that SEIC had invested significant sums studying the whales, assessing risk and developing mitigation measures.

That acknowledgement is important.

This was not a report written on the premise that the operator had done nothing.

The question was whether what had been done was sufficient for an exceptionally vulnerable population living beside a massive industrial development.

3. February 2005: The Independent Scientific Review

IUCN released the Independent Scientific Review Panel report on 16 February 2005.

Its underlying question was formidable: could the risks associated with Sakhalin II Phase 2 be managed so that oil and gas development did not further jeopardise the survival and recovery of this critically endangered whale population?

The report considered several categories of risk.

Industrial noise could disrupt feeding or displace animals.

Construction and support vessels created collision risk.

Pipeline construction could damage benthic habitat upon which the whales’ prey depended.

Oil or gas releases could affect whales, prey and sensitive locations such as Piltun Lagoon.

The report also examined cumulative effects rather than pretending Sakhalin II existed in isolation from other industrial activity in the region.

The scientific difficulty was amplified by the population’s size.

With so few reproductively active females, risks that might be tolerable for a large population could have very different consequences here.

4. The Existing Pipeline Route Was a Specific Scientific Concern

One conclusion was particularly concrete.

The panel examined three offshore pipeline alternatives linking the PA-A and PA-B platforms to shore.

The existing “base case” route crossed the southern portion of the primary gray-whale foraging area and ran close to the mouth of Piltun Lagoon. The two alternative routes passed farther south. The panel considered Alternative 1 safer in relation to construction noise, vessel collision and physical disturbance of benthic habitat, while also offering advantages in relation to possible spills reaching the principal feeding area.

This was no longer a generic demand that Shell should “do more for the environment.”

It was an engineering choice.

There was a route on the drawing board.

There were alternatives.

And the scientists considered one of those alternatives less risky for the whales.

5. The Precautionary Question

The later September 2005 record is unusually revealing because it reproduced the issues under discussion together with Sakhalin Energy’s responses.

In the Vancouver workshop table, the earlier scientific position was summarised in stark terms: the “most precautionary approach would be to halt operations” while the risk assessment was refined. If operations continued, risk management needed to be conservative.

That sentence should not be inflated into a claim that IUCN ordered Shell to stop Sakhalin-2.

It did not.

IUCN was not the Russian regulator, the project lender or a court.

Nor had the original panel been asked to issue a simple regulatory verdict of “approve” or “reject.”

But the documentary meaning remains substantial.

Independent scientists had concluded that the uncertainties were serious enough for temporary cessation to represent the most precautionary option.

6. Shell Changed the Pipeline Route

At the end of March 2005, Sakhalin Energy announced a major change.

The offshore pipelines would be rerouted away from the principal whale feeding ground.

Contemporaneous reporting described approximately 12 additional miles of pipeline, while Shell’s own Sustainability Report later described the move as placing the offshore pipelines about 20 kilometres farther from the feeding ground.

Shell’s report expressly credited the scientific process.

Its 2005 Sustainability Report stated that Sakhalin Energy had accepted the panel’s advice to move the offshore pipelines farther away and had also used acoustic modelling, vessel restrictions and scientific monitoring to reduce risks.

Contemporaneous reporting treated the rerouting as a major concession, although environmental organisations continued to raise concerns about the offshore platform and other project activities.

Documentary finding

The record supports a straightforward conclusion:

Independent scientific scrutiny produced a material design change.

Whether one characterises that as responsible adaptive management, successful environmental pressure, lender leverage, or some combination of all three is commentary.

The route moved.

7. Then the Potential Lenders Entered the Scientific Process Directly

The surviving Sakhalin Energy response document provides unusually clear evidence that the scientists’ report was influencing financiers.

On 24 February 2005 — only days after publication of the IUCN report — several panel scientists met representatives of potential Sakhalin II lenders at the US Export-Import Bank in Washington.

According to the SEIC document, following that meeting the prospective lenders told Sakhalin Energy that the remaining gray-whale issues identified by the scientific review needed to be resolved.

Sakhalin Energy then produced a structured response.

A further IUCN meeting took place at Gland, Switzerland, on 11–12 May 2005. Its stated purpose included informing decision-making by both Sakhalin Energy and potential lenders and helping the lenders understand whether SEIC’s revised plans adequately addressed the scientists’ concerns.

This is one of the strongest records in this instalment.

The financing institutions were not standing outside the scientific dispute waiting for somebody else to settle it.

They were asking the scientists questions.

They were seeking clarification.

And they were requiring the project operator to respond.

8. May Was Not the End of It

The Gland meeting did not resolve everything.

The SEIC record says the discussions failed to provide sufficient clarity for the decision-makers, particularly the potential lenders.

Those lenders consequently asked for another meeting with the independent scientists to assess Sakhalin Energy’s responses more closely.

That meeting took place in Vancouver from 17 to 19 September 2005.

The participants worked through the scientific issues, SEIC’s responses and the scientists’ assessments in detail.

The result was not a simple declaration that the project was safe.

Nor was it a declaration that the project could never proceed.

It was something much more characteristic of real scientific review:

progress in some areas, unresolved uncertainty in others, and continuing demands for monitoring, mitigation and independent scrutiny.

9. Noise Became One of the Hardest Questions

Industrial noise was particularly difficult.

The independent scientists recognised that modelling could help predict the acoustic footprint of construction, but the September record identified important limitations, especially at lower frequencies potentially relevant to gray whales.

Their assessment said model projections needed verification through measurements and could not by themselves establish an absence of biological effect.

The dispute was not merely about how loud a particular operation might be.

It concerned what received noise meant biologically.

Would feeding whales alter behaviour?

Would they move offshore?

Could repeated exposure matter cumulatively?

What threshold should trigger mitigation or shutdown?

The scientists wanted real-time monitoring of whale distribution, behaviour and acoustic conditions and recommended precautionary shutdown arrangements where agreed criteria were exceeded.

10. The “No Disturbance” Problem

Here the Shell and independent-scientist records deserve to be placed side by side.

Shell’s Sustainability Report stated that external scientific observers monitored noise during installation of the production-platform bases and that the work was completed without signs of disturbance to the whales.

The Vancouver scientific review was more guarded.

For some construction activity, it recorded that weather had prevented behavioural observations during portions of the work. The scientists concluded that, where observations had not been possible, an absence of effect could not safely be inferred. They also said opportunities to learn about whale responses had been lost to some extent.

These statements should not be lazily converted into an accusation that Shell’s account was false.

They operate at different evidential levels.

Shell reported that observers had not identified signs of disturbance during monitored activity.

The scientists warned that incomplete observation prevented the stronger conclusion that no disturbance had occurred across all relevant periods.

Documentary assessment

“Nothing was observed” and “nothing happened” are not scientifically identical propositions.

That distinction became important because financing decisions depended not simply upon corporate assurances, but upon whether risks had been assessed to standards acceptable to external institutions.

11. The Scientists Still Had Reservations in September 2005

The September issues table records progress, but it also preserves criticism.

The independent scientists stated that Sakhalin Energy’s approach had not always been suitably or consistently precautionary and that its use of the ALARP risk-management concept had not always produced the least practicable risk to the whales.

They also identified continuing issues involving contractor compliance, independent monitoring, noise criteria and implementation of mitigation measures.

Sakhalin Energy did not simply reject the process.

Its responses defended aspects of the modelling and risk-management approach, explained operational constraints and accepted that a number of issues should be carried forward to a permanent advisory panel.

That balance matters.

The documentary record is not:

scientists warned; Shell ignored.

Nor is it:

scientists approved; controversy ended.

It is a record of continuing technical disagreement inside a process that the operator itself had entered and prospective lenders were actively following.

12. The Western Gray Whale Advisory Panel

One of the most consequential outcomes was institutional rather than engineering.

The September process produced agreement to establish a long-term Western Gray Whale Advisory Panel.

Sakhalin Energy supported its formation and funding, while the scientists envisaged a continuing mechanism through which independent expertise could review threats and mitigation measures over the life of industrial activity.

IUCN formally announced the new panel in October 2006.

It described a population containing only about 20–25 reproductively active females and said the panel would provide independent scientific advice concerning Sakhalin Energy and other relevant offshore activity.

In hindsight, the structure proved unusually durable.

IUCN’s specialist archive now records a 17-year scientific oversight programme running from the original 2004 process through the final advisory-panel work in 2021–22, involving hundreds of recommendations and specialist work on noise, oil spills, cumulative effects and monitoring.

13. December 2005: What the EBRD Actually Decided

This part of the archive requires particular precision.

On 14 December 2005, the European Bank for Reconstruction and Development decided that the Sakhalin II project documentation was:

“fit for the purpose of consultation.”

That wording appears in EBRD’s own record.

Shell’s Sustainability Report described the same development: the EBRD had decided that Sakhalin Energy’s environmental, social, health and safety approach was fit for public consultation.

What that meant

It permitted the financing process to advance into public consultation.

What it did not mean

It was not final EBRD approval of a loan.

It was not a finding that every whale-related concern had disappeared.

It was not a legal ruling that Sakhalin II complied with every applicable environmental requirement.

The distinction is essential because contemporary reporting sometimes compressed the financing process into the simpler question: “Will the EBRD fund Shell?”

The official record was more incremental.

14. Contemporary Journalism Saw the Same Pressure

The financing stakes were obvious to journalists at the time.

In March 2005, The Guardian reported that the proposed route was under pressure because of the whale issue and that public lenders were being urged not to finance the project. After the rerouting, the newspaper reported that environmental campaigners still believed significant risks remained.

In June, The Observer described EBRD financing as being held back while environmental problems remained unresolved. Later reports continued to depict lender approval as commercially important to Shell and linked the whale controversy to the wider environmental scrutiny surrounding the project.

Those reports are evidence of contemporary perception.

They should not substitute for the formal EBRD record.

But they demonstrate that at the time — not merely in retrospective campaigning — the connection between environmental performance and financing was widely understood.

15. The EBRD Ultimately Did Not Finance Sakhalin II

The final outcome is another point where causation must not be invented.

EBRD’s own Independent Recourse Mechanism record states that on 11 January 2007 the Bank decided not to finance Sakhalin II because of the change in ownership of Sakhalin Energy.

That fact places a firm limit on the historical claim.

It would be inaccurate to say:

“The whales caused EBRD to reject Sakhalin II financing.”

The documentary record does not establish that.

Environmental issues, including the gray-whale question, plainly formed part of the financing scrutiny for years.

But the recorded reason EBRD ultimately ceased pursuing the financing was the changed ownership structure following Gazprom’s acquisition of control.

That distinction is exactly the kind of boundary this archive is intended to preserve.

16. The High Court Record Confirms the Whale Issue Was Material

The whale controversy subsequently entered the British judicial record through the dispute over disclosure of government documents.

In Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin), the High Court dealt with ECGD’s attempt to overturn an Information Tribunal decision requiring disclosure of interdepartmental material concerning Sakhalin-2.

The court record describes proposed project finance of approximately US$650 million and identifies the endangered Western Grey whale among the environmental concerns surrounding the project. The High Court dismissed ECGD’s appeal against disclosure.

Again, the limits are important.

Mr Justice Mitting did not decide that Sakhalin Energy had harmed the whales.

He did not decide that Shell had committed an environmental offence.

He did not decide that financing Sakhalin-2 would have been unlawful.

The case concerned access to government environmental information.

What it confirms is that the whale and financing questions were sufficiently substantial to form part of a public-law dispute about what the British Government should disclose.

17. What Shell’s Own Record Shows

Shell’s Sustainability Report is striking because it does not pretend that the project passed through 2005 unchanged.

It records substantial adaptation.

The company said Sakhalin Energy listened to stakeholders, moved the offshore pipelines farther from the whale feeding ground, used acoustic modelling, introduced ship-speed and routing measures, supported independent scientific observation and worked toward establishing a permanent advisory panel.

Those are Shell’s own published claims.

They should remain in the archive alongside the independent scientists’ reservations.

Together they demonstrate that the whale controversy produced consequences beyond publicity.

Engineering changed.

Monitoring changed.

Institutional oversight changed.

And the financing process absorbed environmental conditions that the operator had to address.

18. Documentary Findings Established by the scientific and company record

The Western North Pacific gray-whale population feeding near Sakhalin was considered critically endangered and numbered roughly 100 animals, with only about 20–25 reproductively active females.

Sakhalin Energy initiated an independent scientific review through IUCN.

The scientists identified substantial risks involving noise, vessel collisions, habitat disturbance and oil spills.

They regarded the original offshore pipeline route as presenting additional risks because it crossed part of the primary feeding area.

Sakhalin Energy subsequently rerouted the offshore pipelines approximately 20 kilometres farther from that feeding ground.

Potential lenders met the scientists and required outstanding whale-related issues to be addressed.

Further scientific meetings were held specifically to help inform financing decisions.

Unresolved issues remained after the pipeline rerouting, particularly around noise, monitoring, risk thresholds and the precautionary approach.

A long-term independent advisory panel was established.

Established by the financing record

EBRD considered Sakhalin II for financing.

In December 2005 it determined that the project documentation was suitable to enter public consultation.

That was not final loan approval.

In January 2007 EBRD decided not to finance the project following the change in Sakhalin Energy’s ownership.

Established by the court record

The endangered whale issue and approximately US$650 million of potential project finance formed part of the factual background to the later High Court disclosure litigation.

The High Court upheld disclosure of government departmental responses.

The judgment did not determine whether Sakhalin II harmed whales or whether the project itself was environmentally lawful.

Not established

The record does not establish that Sakhalin II caused the extinction of the Western North Pacific gray-whale population.

It does not establish that EBRD rejected the project because of whales.

It does not establish that the IUCN panel ordered Shell to stop the project.

It does not establish that Shell ignored all scientific advice; the pipeline rerouting proves otherwise.

Nor does Shell’s adoption of mitigation measures establish that every scientific concern was resolved.

Commentary

The most revealing document in this file may not be a warning about whales at all.

It may be the record of the lenders meeting the scientists.

That changes the character of the story.

Environmental assessment was not simply an exercise taking place alongside the real commercial negotiations.

It had entered the commercial negotiations.

A pipeline route became a financing issue.

Noise modelling became a financing issue.

Monitoring protocols became a financing issue.

The credibility of mitigation plans became a financing issue.

And a population of roughly one hundred whales became one of the tests through which prospective lenders assessed a multibillion-dollar energy project.

There is also a useful lesson in the competing documents.

Shell’s own sustainability account emphasised adaptation and successful mitigation.

The independent scientists recorded both progress and continuing uncertainty.

The lenders wanted enough clarity to make financing decisions.

Campaigners wanted the precautionary principle applied more aggressively.

None of those records needs to be discarded for the others to make sense.

Put together, they show the actual mechanism of environmental scrutiny at work: contested evidence, design changes, unresolved questions, further monitoring and financial institutions deciding how much uncertainty they were prepared to carry.

That is more interesting — and historically more defensible — than either of the simplistic alternatives.

Shell neither sailed through the whale issue untouched nor had the project conclusively condemned by scientists.

It changed the project while continuing to build it.

And the lenders kept asking questions.

Source Record

The principal evidence for this instalment is the 2005 IUCN Independent Scientific Review Panel report, Impacts of Sakhalin II Phase 2 on Western North Pacific Gray Whales and Related Biodiversity; the September 2005 Western Gray Whale workshop record containing Sakhalin Energy’s formal comments and responses; The Shell Sustainability Report 2005; the European Bank for Reconstruction and Development Independent Recourse Mechanism record for Sakhalin II; UK Parliamentary answers concerning the Western Grey Whale and ECGD financing; Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin); IUCN’s subsequent Western Gray Whale Advisory Panel archive; and contemporaneous reporting by The Guardian/Observerconcerning pipeline rerouting, environmental controversy and prospective project finance.

Archive disclaimer: Scientific concern is not equivalent to proof of environmental damage. A company response is not an independent finding. A prospective lender’s environmental review is not a judicial determination. EBRD’s December 2005 finding that documentation was fit for public consultation was not approval of financing, and its January 2007 decision not to finance Sakhalin II is recorded by EBRD as resulting from the project’s ownership change. No allegation of illegality or environmental harm should be inferred beyond the findings of an identified court, regulator or competent scientific body.

Site wide disclaimer also applies.

Next Archive File SLF-2007-025 — The Sakhalin Papers XV: A Thousand Rivers — Salmon, Pipeline Crossings and the Contractor Problem

The whales were offshore.

The next environmental battle ran almost the entire length of Sakhalin Island.

Shell’s own 2005 Sustainability Report acknowledged that the onshore pipelines would cross more than 1,000 rivers and streams, including approximately 180 regarded as environmentally sensitive. It also acknowledged that contractors did not always comply with the river-crossing strategy during the winter of 2004–05 and that Sakhalin Energy stopped the winter work programme when it became aware of the problem.

Contemporaneous journalists, environmental organisations and Russian authorities were meanwhile reporting allegations involving sediment, salmon-spawning habitat, contractor performance and regulatory breaches.

The next archive file will separate those allegations from what Shell itself admitted, what regulators actually established and what the documentary record says about a management problem that appears repeatedly throughout the Sakhalin Papers:

When most of the physical work is being performed by contractors, who carries responsibility when environmental commitments on paper collide with construction on the ground?

THE SHELL LEAKS FILES: 11 AUGUST 2026 was first posted on August 11, 2026 at 10:40 pm.
©2018 "Royal Dutch Shell Plc .com". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at john@shellnews.net

Federal agencies are investigating four ongoing cyclospora outbreaks in the United States. This year has seen a record number of cases, prompting concern among consumers and experts.

In its latest update, the U.S. Centers for Disease Control and Prevention (CDC) reports 13,895 laboratory-confirmed domestic cases of the parasitic infection across 45 states since May. They are also tracking an additional 10,455 cases that have yet to be confirmed. There have been two deaths in individuals with underlying health issues.

The biggest outbreak now spans 15 states and has a confirmed case count of over 6,000 people, according to CDC. The agency is still investigating Taylor Farms iceberg lettuce as the likely source after previously declaring their testing a false positive. Taylor Farms has voluntarily recalled their products in 27 states across the U.S.

Agencies are also investigating three additional outbreaks that have already ended.

Cyclospora is a parasite that often contaminates fresh produce, infecting those who eat it. May through August is considered cyclosporiasis season in the U.S. Symptoms usually appear one week after exposure, and most commonly include watery diarrhea, nausea, and fatigue. While treatable, many cases clear up on their own, and aren’t diagnosed, says Glenn Morris, Professor of Infectious Diseases at the University of Florida College of Medicine and Founding Director of the Emerging Pathogen Institute.

“Because fresh produce items typically have short shelf lives, outbreaks of Cyclospora tend to appear suddenly, and gradually fade as the product is consumed out of the marketplace,” Craig Hedberg, a Professor at the University of Minnesota who focuses on foodborne illness and infectious disease outbreaks, tells Food Tank.

Better and more widely available diagnostic testing methods in clinical laboratories may lead to higher case counts, according to Hedberg. And when awareness of an outbreak grows, more people are likely to seek medical care.

Morris points to an additional explanation: a breakdown in the country’s food safety programs.

Last July, CDC made it optional for The Foodborne Diseases Active Surveillance Network (FoodNet) to track most pathogens, including Cyclospora. Salmonella and STEC (E. coli) are still mandatory. Although FoodNet is not intended to detect outbreaks of foodborne illness, it better prepares federal agencies to deal with them. Morris thinks that while the outbreak would likely still have occurred, funding cuts, loss of experienced staff, and reduced laboratory capacity within FoodNet, CDC, and the U.S. Food and Drug Administration (FDA) have hampered the investigative process.

“All of the tools that would normally be applied, both in terms of preventing the outbreak… [and] investigating the outbreak, have seen major cuts from the current administration,” Morris tells Food Tank.

FoodNet is a CDC program that tracks common foodborne infections to collect baseline data. It uses active surveillance, meaning it contacts clinical laboratories in ten states to identify cases and provide a basis for prevention efforts. “Public health surveillance for foodborne illnesses is a foundation for effective food control,” says Hedberg. But because cyclosporiasis is difficult to diagnose, it can take longer to trace to a source.

Morris notes that oversight of food safety is further complicated by the involvement of multiple federal departments. “We’re the only major Western country that does not have a [single] food safety agency,” he says.

The CDC handles cases of foodborne illness within people but lacks regulatory authority at the state level. Regulation of food is controlled by FDA and the U.S. Department of Agriculture (USDA), depending on the product. While these agencies communicate with each other, the U.S. does not have a single federal food safety agency. Morris believes that the country should create one and conduct strong active surveillance on a federal scale.

“We need to invest in public health agencies to better prepare them to respond to outbreaks when they are small, to help prevent them from growing large,” Hedberg tells Food Tank—a point Morris echoes.

Morris advises that consumers can protect themselves from cyclospora by avoiding foods identified as likely to be contaminated, shopping local, and following the latest CDC updates.

Articles like the one you just read are made possible through the generosity of Food Tank members. Can we please count on you to be part of our growing movement? Become a member today by clicking here.

Photo courtesy of Zolfeqar Fatihzadeh, Wikimedia Commons

The post Cyclospora Outbreak Highlights Food Safety Gaps appeared first on Food Tank.

Skeptical Science is partnering with Gigafact to produce fact briefs — bite-sized fact checks of trending claims. You can submit claims you think need checking via the tipline.

Are there enough minerals for solar power expansion to help mitigate climate change?

Global mineral supplies are large enough to support solar development for climate change mitigation.

A 2023 analysis of 75 emissions-reduction scenarios found that projected median mineral demand largely remains within known geological resources. Projected median demand for silver was about 68,000 metric tons, compared to 530,000 tons of estimated reserves; cadmium demand was 38,000 tons against 500,000 tons of reserves.

Tellurium may constrain cadmium-telluride panels, a minority of the global solar market, but research suggests improved refining and material efficiency could substantially reduce this strain.

Recycling can further reduce demand for newly mined minerals by recovering silver, copper, silicon, and other components for reuse in future panels. Recent innovations are improving recycling cost-effectiveness, while federal programs continue to support domestic mineral supply chains and recycling research. 

The main challenge lies in expanding production and supply chains, not mineral shortages.

Go to full rebuttal on Skeptical Science or to the fact brief on Gigafact

This fact brief is responsive to quotes such as this one.

Sources

AP News Study: Enough rare earth minerals to fuel green energy shift

Joule Future demand for electricity generation materials under different climate mitigation scenarios

USGS Byproduct Mineral Commodities Used for the Production of Photovoltaic Cells

Yale School of the Environment As Millions of Solar Panels Age Out, Recyclers Hope to Cash In

Resources, Conservation and Recycling Innovating the recycling of silicon-based solar panels with an eco-friendly alkaline leaching process

MIT Climate Can solar panels be recycled?

U.S. Department of Energy End-of-Life Management for Solar Photovoltaics

The White House Fact Sheet: President Donald J. Trump Delegates Defense Production Act Authority with Respect to Recoverable Critical Minerals and Materials That Are Essential to Our National Defense

Columbia Law School Sabin Center for Climate Change Law Rebutting 33 False Claims About Solar, Wind, and Electric Vehicles

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I went for a run this morning, on a paved trail that runs along a little creek surrounded by a few loblolly pine trees and some red maples, a little bit of urban nature surrounded by houses, streets, and suburbia. It was humid in the early summer morning, with mist steaming up off the concrete […]

Restoration of the Broadford Bridge oil site in West Sussex is due to begin this summer, officials have confirmed.

The Broadford Bridge oil site during operation. Photo: Weald Action Group

The site, near Billingshurst, is subject to two council planning enforcement notices after the operator, a subsidiary of UK Oil & Gas plc (UKOG), failed to return the well pad to farmland.

Broadford Bridge has had no planning permission since March 2024 when West Sussex County Council refused an application for a fifth extension of consent. Before that, the site had been mothballed since 2018.

An operation to plug and abandon two Broadford Bridge wells ended in February 2026.

But the well pad, fencing, gates and soil bunds remain, despite a planning condition requiring the operator to return the site to farmland. West Sussex County Council took enforcement action in January 2025 and February 2026.

A council spokesperson said today:

“Two Breach of Condition Notices (BCNs) were served on 13 February 2026. These remain live and require the operator to remove all associated infrastructure (including buildings, plant, machinery, fencing, gates and other structures) and restore the site in accordance with the approved restoration scheme by 31 December 2026.

“The operator has advised that the intention is for restoration works to commence this summer with a view to achieving restoration by the required date.”

Restoration includes work to clean and remove surface stone layers, take-up impermeable membranes, in-fill drainage ditches and regrade the soil from surrounding earth bunds to return the site to its original appearance and use.

Access application Access track application plan. Source: WSCC/036/26

The restoration timeframe emerged in a new planning application for Broadford Bridge (WSCC/036/26).

The application, to keep the site access track, was submitted on behalf of Sheila Francis by the Zetland planning consultancy which has previously worked for UKOG companies.

It revealed: “the well site is to be restored (Summer-Autumn 2026)”.

The application seeks to retain the 450m track to the well site for “agricultural purposes” and the junction of the track with the B2133 Adversane Lane. The application does not seek to retain the former well pad area and fencing around it.

Comments on the access track application can be made online. The deadline for comments is 20 August 2026. A decision is expected by 21 September 2026.

This blog was a collaboration between the Environmental Paper Network, Fórum Carajás, and the Global Forest Coalition.

The promise of “green steel” has become an attractive narrative in global efforts to decarbonize heavy industry. After all, the steel industry is responsible for around 7% of global energy-related carbon dioxide emissions. Companies highlight claims of reduced carbon emissions, renewable charcoal, and sustainable forestry as evidence that steel production can become environmentally friendly.

In Brazil, some steel producers market eucalyptus-derived charcoal as a renewable, low-carbon or even carbon-neutral substitute for fossil coal. However, behind these claims lies a reality that many rural communities in Brazil know all too well: land conflicts, environmental degradation, and threats to traditional livelihoods.

Illustrating this contradiction is Aço Verde do Brasil (AVB), a Brazilian steel producer that has 50,000 hectares of industrial eucalyptus plantations for charcoal production, and has declared its factory in the state of Maranhão the “world’s first carbon neutral steel plant”. However, long-standing conflicts over land with communities in the area show why industrial decarbonization cannot be assessed through carbon accounting trickery alone. It must also be judged by its consequences for impacted territories and communities.

Formiga Community Faces Intimidation

The community of Formiga in the Baixo Parnaíba region of Maranhão has been in a dispute with AVB over approximately 600 hectares of land for several years. Formiga residents claim the land as theirs under community ownership laws, and argue they hold documents asserting their rights over the disputed area. However, AVB also claims the land as its own, and plans to clear it, in order to expand its eucalyptus plantations.

Earlier this month, Formiga residents were unexpectedly visited by a large group of armed military police officers after AVB filed a complaint alleging that community members had occupied company land. The community rejects this characterization and says that the police contingent arrived without a search warrant.

Mayron Régis, from Fórum Carajás, an NGO that supports local residents and a member of the Biomass Action Network (BAN), explains that “the allegation has no basis. The Formiga community is in a dispute with AVB over 600 hectares and, for some time, residents refrained from planting on this land because of threats made by the company,” he says. “But they decided to begin planting again because they are farmers, and farming is what they know and how they sustain themselves. In response to that decision, the company fabricated this complaint as a way of preventing residents from continuing to cultivate the land.”

The accusation is unfounded. The dispute concerns approximately 600 hectares of land, officially registered in the rural property registry of the national land agency INCRA as owned by the local community.

However, the company claims the land too. For a considerable period, Formiga residents avoided cultivating the area because of threats allegedly made by the company. As farming is the primary source of livelihood for Formiga residents, their collective way of life depends on cultivating their traditional lands. For the community, choosing to cultivate the land was not an “invasion”, but them exercising their right to work the land and sustain themselves, on land they understand to be their own. Rather than seeking dialogue, AVB chose to continue its campaign of harassment and intimidation by filing a complaint that resulted in police intervention. For the community, this represents another attempt to prevent families from exercising their rights.

Communities under pressure across Brazil

 

Events in Formiga are not an isolated example, but rather part of a wider escalation of territorial pressure in the region. Across Brazil, rural communities frequently report that legal action, police operations, and land disputes are used to pressure residents who challenge large-scale agribusiness and industrial projects. As Mayron explains:

“Over the past few weeks, what we have seen in the Baixo Parnaíba region of Maranhão is a considerable increase in attempts to intimidate traditional communities, alongside incursions into traditional territories, particularly by eucalyptus companies and soy growers. It gives the impression that this is all being coordinated. In response, communities in the region are coming together in order to resist the expansion of soy and eucalyptus monocultures, and the landgrabbing and intimidation they bring.”

In 2025, the Pastoral Land Commission (Comissão Pastoral da Terra –  CPT) recorded 1,593 rural conflicts in Brazil, 75% of which involved land. The region of Maranhão led the country in recorded cases of violence related to land, with 190 occurrences. The Commission warns that, even when the total number of recorded conflicts falls, violence against communities remains persistently high.

Photo shared in WhatsApp groups by Mayron Regis from Fórum Carajás

Green rebranding and historical impacts

The current conflict in Formiga reflects the historical harm caused by steel production in Maranhão, which the company is trying to cover up through its environmental branding efforts. A 2023 investigation by Veja, updated in 2024, examined the rebranding of Gusa Nordeste into AVB and contrasted the company’s carbon-neutral claims with the environmental and social legacy of the steel and pig iron industries in Açailândia, where AVB’s steel plant is located. The report described how pollution has affected more than 1,000 residents of Pequiá, a community living next to AVB’s steel plant and a number of pig-iron plants. It also looked at numerous previous legal actions taken against steel companies in the municipality, and historical environmental complaints involving the company.

Veja also reported that the carbon-neutral certification publicized by AVB helped open the way for two green-bond issuances in 2021 and 2022, which together raised R$650 million for eucalyptus planting associated with the production of its branded “green steel.” This indicates that environmental labels are not merely a matter of public image or branding: they also facilitate access to substantial financial resources and support the territorial expansion of plantation-based supply chains.

In its response to Veja, AVB rejected the suggestion that its transformation amounted to greenwashing. It described the charcoal it uses as “biocarbon”, and presented it as a renewable and carbon-neutral alternative to fossil coal. The company stated that it had stopped producing pig iron (which steel is produced from) in Açailândia in 2020, that its newer steel production processes were cleaner, and that it continuously monitored environmental conditions and complied with agreements reached with Maranhão’s environmental authorities.

What is “Green” Coal?

The charcoal used by companies such as AVB is often described as “green coal”—a term referring to charcoal produced from eucalyptus plantations under “sustainable forest management” rather than from native forests.

Unlike mineral coal (coal extracted from mines), eucalyptus charcoal is made by harvesting fast-growing eucalyptus trees, carbonizing the wood in kilns, and using the resulting charcoal as a reducing agent in steel production.

Because eucalyptus can be replanted, companies argue that this charcoal is renewable and significantly reduces greenhouse gas emissions compared to fossil coal. This is one of the reasons Brazil has become internationally recognized for producing steel with a “lower carbon footprint” than many other countries.

However, calling this product “green” is misleading, even if only carbon emissions are considered. Purely on the basis of emissions, burning charcoal actually results in more atmospheric carbon emissions than burning coal per unit of energy. However, international carbon accounting loopholes allow companies to ignore the emissions from burning biomass, including producing and burning charcoal.

Whether using biomass from plantations rather than native forests produces genuine emissions reductions depends on what is counted: the previous use of the land, changes in vegetation and soil carbon, plantation establishment, harvesting, fertilizers and pesticides, transport, emissions from charcoal kilns, repeated rotations and the time required for newly planted trees to absorb the carbon released, among many other factors and impacts. Biomass is therefore not automatically renewable, sustainable or carbon-neutral simply because trees can be replanted.

The Hidden Costs Behind “Green” Charcoal

Investigations by Deutsche Welle and Mongabay have documented the social and environmental impacts associated with the rapid expansion of eucalyptus plantations in Brazil. Several indigenous-focused organisations have also denounced the practice throughout the country.

A November 2025 briefing by the Latin America Working Group of the Biomass Action Network estimates that Latin America produces around 10 million tonnes of charcoal annually, mainly for the steel industry. Brazil alone produces approximately 7 million tonnes a year (almost all of it from wood grown in industrial eucalyptus monocultures) and around 90% of the country’s charcoal is consumed by the iron and steel sector. It documents how industrial biomass supply chains are linked to land concentration, territorial conflicts, water stress, biodiversity loss, precarious labour and corporate control over extensive areas of land. Some of the most significant impacts include:

Water depletion

Eucalyptus grows extremely quickly and has a high demand for water. Communities living near extensive plantations have reported declining stream flows, disappearing springs, and increasing water scarcity. Although water availability depends on several environmental factors, researchers have raised concerns that large monoculture plantations can significantly affect local hydrology, especially in already vulnerable regions.

Biodiversity loss

Replacing diverse native ecosystems with vast eucalyptus monocultures reduces habitat for wildlife and simplifies landscapes that previously supported rich biodiversity. While plantations contain trees, they do not provide the same ecological functions as native forests. Eucalyptus monocultures are uniform production systems designed for repeated harvesting.

Land concentration

The expansion of industrial eucalyptus plantations often concentrates land ownership in the hands of large companies. This limits access to land for small-scale farmers, traditional communities, and Indigenous peoples, increasing social inequality and intensifying land conflicts.

Community livelihoods

For rural communities, land is not simply an economic asset—it is the basis for food production, culture, memory and collective identity. When access to farmland is restricted or communities face legal intimidation, food security and rural livelihoods are directly threatened.

A green image cannot ignore biodiversity and human rights

Reducing emissions in steel production is an important goal. However, producing “green steel” using charcoal is clearly green in name only, no matter which perspective it is looked at. Climate solutions cannot come at the expense of communities living on and from the land.

A truly sustainable transition must consider not only carbon accounting but also respect for human rights, land tenure, biodiversity, and water resources. If “green steel” depends on practices that displace communities, restrict access to farmland, or generate environmental degradation, then its sustainability claims deserve careful scrutiny.

The situation faced by the Formiga community reminds us that the transition to a low-carbon economy must also be a just transition—one that protects both the climate and the people whose lives are most directly affected by industrial expansion. As global demand for “green steel” continues to grow, governments, investors, and consumers should look beyond corporate sustainability labels and ask a broader question: green for whom?

Photo from Fórum Carajás’ Instagram.

Emotional meat eaters Channel Comment brendan 11th August 2026 Teaser Media

EWG applauds California’s phase-out of toxic herbicide linked to Parkinson’s and other diseases Anthony Lacey August 10, 2026

SACRAMENTO – The Environmental Working Group today applauded the California Department of Pesticide Regulation’s announcement that all manufacturers of pesticide products containing paraquat-dichloride have voluntarily cancelled their registrations that allow them to sell paraquat in the state.

The decision starts the phase-out of one of the most toxic weedkillers in use in California agriculture. It’s a major step toward protecting farmworkers, agricultural communities and the environment from a highly toxic herbicide linked to Parkinson’s disease, thyroid disease, childhood leukemia, non-Hodgkin lymphoma and birth defects.

“California is sending a powerful message that there is no place for paraquat in modern agriculture,” said Bernadette Del Chiaro, EWG’s senior vice president for California. “The fact is, farmworkers and nearby communities have been unprotected from the health threats of paraquat making this decision long overdue. 

“That, along with the tragic spill in Dorris put the writing on the wall that paraquat’s days were numbered,” said Del Chiaro. 

In March, a large container of paraquat fell from a truck in the northern California town Dorris, spilling roughly 60 gallons of the chemical onto a major roadway and into the surrounding community. Citing the risk of exposure to airborne paraquat releases, officials ordered a lockdown affecting about 600 residents, including those at a local elementary school. 

Del Chiaro praised the California Legislature, in particular former Assemblymember and now Rep. Laura Friedman (D-Calif.) and leading voices like Dolores Huerta that ultimately led to today’s announcement through the enactment of AB 1963 in 2004. EWG sponsored the legislation, which required DPR to prioritize the scientific reevaluation of paraquat.

Using paraquat is banned in more than 70 countries, and earlier this year Vermont became the first U.S. state to prohibit its use. 

“Paraquat is bad news for farmers, farmworkers and public health,” said Del Chiaro. “We applaud today’s announcement and urge other states to follow the lead of California and Vermont and ban this toxic crop chemical once and for all.” 

###

The Environmental Working Group is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action. Visit www.ewg.org for more information.

Areas of Focus Farming & Agriculture Family Health Toxic Chemicals Paraquat California Press Contact Alex Formuzis alex@ewg.org (202) 667-6982 August 10, 2026

Thirty-seven senators recently signed a letter to President Trump vehemently opposing his recent monument reductions and standing up for Bears Ears and Grand Staircase-Escalante. That letter sent a clear message: our national monuments must not be attacked, diminished, or treated as bargaining chips.

But Trump’s attacks don’t stop at monument boundaries. The wild public lands surrounding and connecting many national monuments in Utah are part of the same remarkable redrock landscape and deserve lasting protection.

Please thank your senator(s) for signing the letter while also urging them to cosponsor America’s Red Rock Wilderness Act, landmark legislation that would protect more than 8 million acres of wild public land in Utah as wilderness, including lands within the national monuments.

Thank your senator(s) for defending the monuments and ask them to cosponsor America’s Red Rock Wilderness Act

Trump’s attack on the monuments is part of a broader effort to weaken protections for public lands across Utah and the West. The Red Rock bill offers a powerful response: permanent congressional protection for the canyons, mesas, badlands, and other desert wild lands that make this region so extraordinary.

The lands proposed for wilderness designation under the Red Rock bill provide critical wildlife habitat and migration corridors, protect cultural resources, and preserve intact desert ecosystems. Cosponsoring this visionary legislation is one of the clearest ways lawmakers can show they are serious about defending America’s public lands from attacks now and in the future.

Please contact your senator(s) now and ask them to cosponsor the Red Rock Bill. If one or both of your senators have already cosponsored, they’ll just receive a thank-you message.

The Senate sign-on letter is an important public rebuke of Trump’s actions on Grand Staircase-Escalante and Bears Ears. Now let’s build on that and make sure Congress protects the surrounding redrock wilderness lands that are essential to the future of these landscapes.

Thank you for taking action!

The post Thank Your Senator(s) for Defending National Monuments in Utah, Ask Them to Cosponsor ARRWA appeared first on Southern Utah Wilderness Alliance.

This is a re-post from Yale Climate Connections by Jeff Masters

When a weak 45-mph tropical storm named Harvey moved through the Lesser Antilles Islands in August 2017 and then petered out in the central Caribbean Sea, no one could have suspected that the meager clump of clouds that remained would go on to become the second-costliest weather disaster in world history. But after crossing Mexico's Yucatan Peninsula into the Gulf of Mexico, Harvey was rejuvenated, rapidly intensifying into a ferocious Category 4 hurricane that hit Texas just north of Corpus Christi.

Harvey's true mischief came after it stalled inland as a tropical storm for two days, dumping at least 40 inches of rain across a gigantic area from Houston to Port Arthur — larger than the entire state of Delaware. The storm total of 60.58 inches (1,534 mm) at Nederland, Texas, was the heaviest single amount ever recorded from a tropical cyclone or its remnants in the U.S. With damages of $164 billion (2026 USD) — mostly from flooding, Harvey became a historical catastrophe exceeded only by Hurricane Katrina of 2005.

When all of Harvey’s rainfall runoff rushed toward the ocean, it encountered the blocking influence of seawater being pushed inland by the persistent onshore winds of the tropical storm, creating a significant compound flood event — coastal flooding that resulted from a combination of storm surge and river runoff unable to drain into the ocean because of the storm surge waters piled up against the coast.

A similar setup could cause an even worse catastrophe in the future. Climate change is causing more intense, slower-moving hurricanes, increased rainfall, and higher sea levels. But traditional risk assessment methods typically consider one hazard at a time — ignoring compound flood events — leading to an underestimation of the danger. If we include all the ways climate change will likely increase flooding, the future flood risk along significant portions of the U.S. Gulf and Atlantic coasts is nearly certain to make them unlivable by late this century, even under a moderate global warming scenario.

How climate change worsens the danger

A 2023 study looking at the flooding from Harvey near Port Arthur, Texas, found that 19% of the flood area occurred because of compound flooding. Under a global warming scenario where a repeat of Harvey hits with an additional sea level rise of 0.57 meters (1.9 feet), accompanied by 18% more total rainfall — plausible in 2050 — this area would increase to 33%. A potential sea level rise of 1.6 meters (5.2 feet) and an additional 50% in total rainfall, plausible by 2100, would cause the compound flooding area to rise to 46%, increasing the number of structures impacted by about a factor of 23 compared to 2017, causing tens of billions in additional damage.

Figure 1. Storm-total rainfall from Hurricane Harvey, August 24-31, 2017. Harvey dumped over 40 inches (yellow colors) in Houston, with isolated amounts over 50 inches (pink colors) south of Houston and northwest of Port Arthur. Image credit: NOAA.

There are three main ways climate change can increase flood risk along the U.S. Atlantic and Gulf coasts:

1. An increase in the frequency of more intense hurricanes and ones moving more slowly at landfall, which will dump more rain
2. Increased heavy rainfall because a warmer atmosphere holds more water vapor
3. Sea level rise

The relative importance of these three factors in a future warmer climate will vary depending upon the location, according to a 2022 study. This study found that across the Gulf of Mexico and Florida coastlines, the increase in rainfall was expected to be the largest driver. For parts of the Southeast and mid-Atlantic, the increase in the number of intense or slow-moving hurricanes would predominate. And along the upper mid-Atlantic and New England coastlines, sea level rise will dominate the future compound flood risk.

Figure 2. The main driver of compound flooding on the U.S. coast. Across the Gulf of Mexico and Florida coastlines, the increase in rainfall is the largest driver (yellow colors), while the increase in storm frequency (of more intense, slow-moving storms) has the largest impact for parts of the Southeast and mid-Atlantic (blue). Along the upper mid-Atlantic and New England coastlines, sea level rise causes the most impact (green). Locations with no clear main driver are labeled NA (gray). (Image credit: Gori et al., Tropical cyclone climatology change greatly exacerbates US extreme rainfall–surge hazard, Nat. Clim. Chang. 12, 171–178 (2022), https://doi.org/10.1038/s41558-021-01272-7, open access)

Sea level rise has already led to a massive increase in flood risk

Sea level rise from all causes – for example, human-caused climate change, natural tectonic processes, and subsidence from groundwater pumping — has already led to a massive increase in the risk of damaging coastal flooding from storm surges alone, according to a 2026 study, Human-driven sea-level rise has quadrupled the frequency of coastal sea-level extremes since 1900. Relative sea level rise from all causes made a 100-year coastal flood in 1900 into a one-in-five-year flood or less by 2005 in Key West, Jacksonville, Atlantic City, and Maine. Because sea level rise is accelerating, the odds of coastal flooding will increase even faster than the increases already observed since 1900.

Flood risks are growing

Charleston, South Carolina: What was a one-in-10-year coastal flood in 1901 occurred 17 times in 2025.
Galveston, Texas: What was a one-in-10-year flood in 1904 occurred nine times in 2024.
Atlantic City, New Jersey: What was a one-in-10-year coastal flood in 1911 occurred 10 times in 2024.
Miami, Florida: What was a one-in-10-year coastal flood in 1931 occurred 14 consecutive days during the "king tides" of October 2025.
Key West, Florida: What was a one-in-10-year coastal flood in 1913 occurred an astonishing 26 out of 27 days during the "king tides" of October 2025; what was a one-in-100-year flood in 1913 has occurred three times in the past 10 years.

Data: NOAA

Dramatic rises in compound flood risk are coming

A return period refers to how often we can expect a weather event of a given severity to occur. For example, we use rainfall statistics from NOAA to compute how often a flood with a 1% chance of occurring in a given year will recur — which is defined as a one-in-100-year storm, with a return period of 100 years.

A 2022 paper, Tropical cyclone climatology change greatly exacerbates US extreme rainfall-surge hazard, studied the odds of a truly extreme compound flood event — a one-in-100-year storm surge occurring at the same time as a one-in-100-year rainfall event. Historically, the return period of such an event was about once every 200-500 years along the coastlines of the Gulf of Mexico and southeast Atlantic (up to the Chesapeake Bay), shifting to once every 1,000 years or even less frequently along the New England coastline.

But under an extreme global warming scenario for the year 2100, these odds would generally (with some exceptions, see Fig. 4) increase by seven- to 36-fold in the South and 30- to 195-fold to the north — a massive rise in extreme flood risk. Although this result was for an extreme global warming scenario, the strong signal found implies that a significant increase in extreme flood risk would occur even in a moderate global warming scenario.

Figure 3. The return period in years in 2005 for what was a one-in-100-year flood in 1900 because of relative sea level rise. Data is plotted from the 2026 paper, Human-driven sea-level rise has quadrupled the frequency of coastal sea-level extremes since 1900. For example, a 100-year coastal flood in 1900 in Jacksonville, Florida, and Atlantic City, New Jersey, was a one-in-two-year flood by 2005 (red circles with the number "2" in them). This change in flood risk is for sea level rise alone — additional increases in flood risk because of changes in precipitation are not included.

The greatest rises in risk were to the north, because climate change is expected to bring greater increases in extreme precipitation closer to the poles. This was also the finding of a 2020 study, More meteorological events that drive compound coastal flooding are projected under climate change, which predicted that the greatest increases in compound flood threat should occur north of 40°N latitude.

Figure 4. The change in return period for an extreme compound flood, defined as a one-in-100-year storm surge occurring at the same time as a one-in-100-year rainfall event, under an extreme global warming scenario. Left side of table: the return period in the historical climate (1980-2005). Right side: return period in the 2070-2100 period under an extreme global warming scenario, using the median value from eight different climate models. The return period increases by a factor of 14 to 265 for these nine cities. Data taken from the supplemental materials in: Gori et al., Tropical cyclone climatology change greatly exacerbates US extreme rainfall–surge hazard, Nat. Clim. Chang. 12, 171–178 (2022). https://doi.org/10.1038/s41558-021-01272-7.

Main cause of future increased compound coastal flood risk: more intense and slower-moving hurricanes

The model used in the 2022 study projected that the top 10% of most intense hurricanes would, along the majority of the U.S. coast, increase in intensity by 15-30% and move 20-30% slower in the future compared to the historical period. “The increase in storm intensity coupled with the decrease in translation speed drives an increased likelihood to observe both extreme rainfall and extreme storm tide in the future,” the authors wrote. 

A substantial inland compound flood risk along the Gulf of Mexico coast

Rivers draining into the Gulf of Mexico have seen large increases in their maximum streamflow in recent decades (commonly 20-40% increases), making them susceptible to increased compound flooding. A 2021 paper found long-term increases in the frequency of compound storm surge and heavy rainfall flooding along the rivers of the northeastern Gulf of Mexico. Surprisingly, these compound flood events were largest a good distance inland, near the limit of where tidal influences stopped — not at the coast where compound events are usually expected. A 2026 study focused on North and South Carolina also found a considerable expansion of the threat of compound flooding inland in a future warmer climate.

A Hurricane Sandy-like compound flood event: five times more likely by 2100?

Hurricane Sandy in October 2012 caused devastating surge-driven flooding across heavily populated coastal areas in New York City, resulting in more than $91 billion (2026 USD) in damages. A 2024 paper, Climate Change Contributions to Increasing Compound Flooding Risk in New York City, found that a Sandy-like event can be expected about once every 150 years in the present climate. But climate change — through sea level rise and an increase in hurricane strength and rainfall — can be expected to make a similar storm about a one-in-65-year event by 2050, and a one-in-30-year event by 2100, under an emissions scenario slightly higher than the trajectory humanity is currently on.

Increased compound flood threat from hurricanes earlier in the season

A 2022 paper, Earlier onset of North Atlantic hurricane season with warming oceans, found that initial threshold dates of continental U.S. named storm landfalls have trended earlier by two days per decade since 1900. Modeling work suggests that the length of hurricane season will continue to increase because of climate change. A 2017 study found that a hurricane season that was two months longer (May-December) would increase the number of flood-risk days by 28-180% along rivers in four Southeast U.S river basins.

Figure 5. Predicted water levels at the Carrollton gage on the Mississippi River in New Orleans as of July 10, 2019. The river was running high, at 16 feet above sea level, and the city’s levees protect the city to a height of 20 feet. The storm surge from Hurricane Barry was predicted to reach that level on July 13. The last time water levels that high were observed at this point on the Mississippi was in the Great Flood of 1927. Image credit: NOAA.

As I wrote in a 2019 post, New Orleans’ Achilles Heel: A Hurricane Storm Surge During a Mississippi River Flood?, a trend toward earlier hurricanes increases the risk of storm surge moving up the Mississippi River that could overwhelm the levees in New Orleans, since the river tends to run high in late spring and early summer. This situation was feared in July 2019, when Hurricane Barry sent a storm surge up the river when the river was already running high from early-summer runoff (Fig. 5). Fortunately, Barry ended up delaying its intensification into a hurricane until after it passed the mouth of the Mississippi, resulting in a storm surge that was not as high as initially forecast.

Other compound hurricane threats

Climate change is likely to make two other types of compound hurricane threats more severe. One of these was covered in my previous post, The emerging danger of post-hurricane heat waves (2026). In addition, more intense hurricanes with higher winds and heavier rains have the potential to create a double-whammy of high-end wind damage and extreme inland flooding simultaneously, overwhelming infrastructure and emergency preparedness and response efforts that could have handled one of these hazards alone, but not both together.

A preprint of a 2026 paper that has not yet undergone peer review, Global Warming Amplifies Inland Compound Risks From Tropical Cyclones, found that when comparing the recent climate (1981-2020) with an extreme climate-change projection for later this century (2061-2100), the annual probability of compound wind and precipitation extreme hazards ranking in the 99th percentile globally increases by 61-115% within 100 kilometers of the coast, and further escalates by 92-204% in areas 100-500 kilometers inland. This inland amplification is driven by more intense landfalling hurricanes and the increased moisture available caused by the 7% increase in water vapor holding capacity of the air per degree Celsius of warming. Hurricane Helene’s impact in 2024 in western North Carolina can be regarded as a harbinger storm in this regard.

Coastal areas becoming unlivable

A 2020 paper, Sea-level rise exponentially increases coastal flood frequency, found that for the most susceptible sites around the U.S., the odds of a one-in-50-year coastal flood “are likely to double approximately every five years into the foreseeable future.” This finding took into account not just storm surges from hurricanes but also from more common coastal storms such as Nor'easters. According to the U.S. Army Corps of Engineers, most coastal engineering works in the U.S. are designed for return periods of 50 to 100 years, so the increase in flood risk at so many sites represents a drastic increase in vulnerability. And if high-end sea-level rise projections of one meter (3.28 feet) by 2100 come true, sea-level rise will likely cause "once-in-a-lifetime" coastal flooding events to occur nearly every day before 2100. (NOAA's 2022 sea level rise forecast gives 50% odds that sea level rise along the contiguous U.S. coast by 2100 will exceed 0.7 meters.)

Figure 6. The return period in years in 2050 for what was a one-in-100-year flood in 2005 because of relative sea level rise. Data is plotted using data from the 2020 paper, Sea-level rise exponentially increases coastal flood frequency, in combination with observed and predicted sea level rise from The Virginia Institute of Marine Science annual Sea Level Rise Report Cards. For example, a one-in-100-year coastal flood in 2005 in Key West, Florida, is predicted to recur every 0.04 years (two weeks) by 2050 (red circle with the number "0.04" in it). This change in flood risk is for sea level rise alone — additional increases in flood risk because of changes in precipitation are not included. The forecasts out to 2050 are generated using the observed acceleration trend fitted with a quadratic curve (since sea level rise is increasing exponentially, and a straight-line linear fit is not appropriate). Note that these forecasts are not based on a climate model and may be underestimated.

If we now add in the massive additional increase in flood risk resulting from compound flooding, good luck trying to insure your home. The huge increase in climate change-induced flood risk from sea level rise, heavier rainfall, and stronger/slower-moving hurricanes is nearly certain to force abandonment of portions of the U.S. Gulf and Atlantic coasts by late this century, even under a moderate global warming scenario. A 2026 study, The Growth Effects of Natural Disasters: Evidence From A Novel Global Dataset Over 1970-2023, found that a one-in-100-year flood reduces GDP by about 0.5%, so it is easy to see how the coast could quickly become unlivable if once-in-a-lifetime floods are occurring nearly yearly in low-lying regions. Indeed, hurricane flooding has already led to the unofficial abandonment of several U.S. communities, and a number of others are already at significant risk, which I will detail in a series of future posts (spoiler alert: Barrier islands are high on the list).

https://bsky.app/profile/drjeffmasters.bsky.social/post/3mnhxhqjjtc2g

The only recourse we will have is to spend vast amounts of money to defend the most important places and retreat from or abandon the rest. A society-shaking mass migration of millions of Americans away from the coast is inevitable in future decades because of increased climate change-induced flood risk. The trigger for the beginning of this exodus may be only a few years away. To understand what’s coming, I recommend reading my 2024 post, When will climate change turn life in the U.S. upside down?

Related posts on sea level rise

• Book review: “On the Move” is a must-read account of U.S. climate migration (2024)
• Book review: “The Great Displacement” is a must-read (2023)
• Part one of my three-part sea level rise series: How fast are the seas rising? (2023)
• Part two of my three-part sea level rise series: Eight excellent books on sea level rise risk for U.S. cities (2023)
• Part three of my three-part sea level rise series: 30 great tools to determine your flood risk in the U.S. (2023)
• Bubble trouble: Climate change is creating a huge and growing U.S. real estate bubble (2023)
• How sea level rise contributes to billions in extra damage during hurricanes (2022)

Bob Henson contributed to this post.

This article first appeared on Yale Climate Connections and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

//

THE SHELL LEAKS FILES SLF-2007-025 The Sakhalin Papers XV: The $20 Billion Shock — When Shell’s Flagship Project Blew Its Budget

Archive reference: SLF-2007-025
Collection: The Sakhalin Papers
Principal records: Shell Stock Exchange Release of 15 May 2003; Shell Sakhalin II Project Schedule and Cost Update of 14 July 2005; Royal Dutch Shell Annual Report and Form 20-F for 2005; Shell SEC filings of 21 December 2006
Supporting record: Contemporaneous financial and energy-industry reporting; Russian government statements; later English High Court proceedings concerning proposed UK export-credit support
Evidence standard: Shell’s own filings are treated as the primary record for Shell’s estimates and corporate position. Russian government claims, press interpretations and allegations concerning political motivation are identified as such. No court is represented as having adjudicated responsibility for the Sakhalin II cost overrun.

Introduction

On 15 May 2003, Shell publicly presented Sakhalin II Phase 2 as an approximately $10 billion investment.

The scale was extraordinary. Shell described it as the largest single foreign direct investment project in Russia and what was then thought to be the world’s largest integrated oil and gas development. First LNG cargoes were planned for the second half of 2007. Shell held 55% of Sakhalin Energy Investment Company, with Mitsui holding 25% and Mitsubishi 20%.

Just over two years later, on 14 July 2005, Shell issued another formal Stock Exchange release.

The estimated cost was no longer approximately $10 billion.

Sakhalin Energy now provisionally anticipated Phase 2 investment costs “of the order of $20 billion”, including planned development and drilling activity through 2014. LNG deliveries were pushed into the summer of 2008. Shell emphasised that the estimate remained under review, but the scale of the change was unmistakable.

The number had effectively doubled.

And under Sakhalin II’s unusual Production Sharing Agreement, this was not merely Shell’s problem.

It was about to become Russia’s problem too.

The $10 Billion Project

The documentary starting point is unusually clear.

Shell’s May 2003 Stock Exchange release, subsequently lodged with the United States Securities and Exchange Commission, stated that Sakhalin Energy had received shareholder support to launch Phase 2. The project’s Supervisory Board, which included representatives of both the company and the Russian Federation, had unanimously approved the development proposal.

Shell put the required investment at approximately $10 billion.

That development involved two new offshore platforms, a gas-processing facility, roughly 850-kilometre oil and gas pipeline systems, an oil export terminal and Russia’s first LNG plant, designed to produce 9.6 million tonnes of LNG annually. First LNG was planned for the second half of 2007.

Mitsui’s own SEC-filed announcement on the same date independently recorded a total Phase 2 development budget of approximately $10 billion and LNG shipments beginning in 2007.

There is therefore little ambiguity about the publicly announced baseline.

Approximately $10 billion was the figure attached to the investment decision.

14 July 2005

Shell’s formal announcement two years later was carefully worded.

Sakhalin Energy “provisionally” anticipated investment costs around $20 billion. The estimate was described as work still in progress and subject to shareholder review and confirmation. The figure covered planned development activity, including drilling through 2014.

But the announcement was nevertheless extraordinary.

A project publicly associated with a $10 billion investment decision in 2003 was now carrying a provisional estimate approximately twice that size.

Shell also moved expected LNG deliveries to summer 2008.

The company said Sakhalin Energy and its shareholders were pursuing mitigation measures and would work with Russian authorities and state experts on revised plans and budgets.

This last point would prove important.

The revised budget could not simply remain an internal Shell accounting exercise.

Russia was one of the parties whose approval mattered.

Shell’s Own Diagnosis

Contemporaneous reporting provides additional detail about what Shell executives believed had gone wrong.

The Guardian reported on 15 July 2005 that Malcolm Brinded, then head of Shell’s Exploration and Production business, attributed the escalation to a combination of currency movements, rising steel costs, difficulties associated with pipeline river crossings and environmental permitting. He acknowledged that the project’s budget and timetable had been materially underestimated.

Industry reporting similarly recorded that the $20 billion estimate was being treated by Shell as a provisional revision requiring further review rather than a finally approved project budget.

This distinction matters.

The July announcement did not mean that the Russian government had already approved $20 billion of recoverable expenditure under the Production Sharing Agreement.

It meant Shell and Sakhalin Energy had concluded that the project they were building was likely to cost dramatically more than previously expected.

Approval of the revised plans and budget remained another matter.

The Annual Report Removes Any Doubt

By the time Royal Dutch Shell published its 2005 Annual Report and Form 20-F, the language had become more direct.

Shell recorded that Sakhalin Energy had announced Phase 2 investment costs estimated at $20 billion and described the change as representing “very substantial cost overruns” compared with previous estimates. The same report stated that construction was approximately 60% complete by the end of 2005 and that LNG deliveries were expected to begin in 2008.

Chief Executive Jeroen van der Veer went further in his introductory message.

He acknowledged “large cost overruns” on Sakhalin II and said Shell intended to learn lessons from them.

This is therefore not a cost-overrun allegation derived from environmental campaigners, hostile journalists or Russian officials.

Shell itself recorded the overruns in its audited corporate reporting.

The argument begins only when one asks why they happened, who should bear them and what consequences followed.

Not Every Extra Dollar Was an Environmental Cost

It would be misleading to imply that the doubling arose principally from the Western gray whale controversy discussed in SLF-2007-024.

Shell and contemporary reports identified a much wider set of pressures: steel and other materials inflation, contractor costs, foreign-exchange movements, Russian inflation, difficult frontier construction conditions, river crossings, engineering challenges and regulatory requirements.

The project itself was immense.

Two offshore platforms had to operate in a region of severe weather, seismic risk and sea ice. Twin pipeline systems crossed most of Sakhalin Island. Processing, liquefaction and export facilities were being created on a scale Russia had not previously attempted for LNG.

Environmental changes, including pipeline-routing and permitting issues, formed part of that history.

They were not the entire explanation.

That evidential boundary is important.

The Most Awkward Week in the Timeline

The timing of the cost announcement created an additional problem for Shell.

In early July 2005 — only days before the $20 billion disclosure — Shell and Gazprom had agreed the broad principles of an asset swap.

Under the proposed arrangement, Gazprom could acquire 25% plus one share of Sakhalin II while Shell would receive a 50% interest in Gazprom’s Zapolyarnoye-Neocomian development. Any difference in valuation would be balanced with cash or other assets. Shell’s 2005 Annual Report subsequently recorded those terms.

Then came the cost announcement.

Contemporaneous reporting recorded an immediate reassessment by Gazprom of the proposed transaction’s valuation. UPI reported that Gazprom demanded reconsideration of the swap terms after Shell disclosed the scale of the cost increase.

This sequence has sometimes invited suspicions about what Gazprom knew and when.

The available record requires caution.

Shell told journalists that Gazprom had been informed before the public announcement that costs were rising. The evidence examined here does not establish that Shell deliberately concealed the scale of the overrun from Gazprom while negotiating the swap.

What is established is the sequence:

the proposed asset swap was announced;

the $20 billion estimate became public shortly afterwards;

and the valuation of the proposed transaction immediately became contentious.

The original swap was never completed in the form envisaged that July.

Why Russia Cared About Shell’s Costs

Sakhalin II was being developed under a Production Sharing Agreement signed in 1994.

Sakhalin Energy’s own description of that agreement states that the Russian Federation retained sovereign ownership of the oil and gas resources while Sakhalin Energy supplied the investment needed to explore and develop them. The PSA replaced much of the conventional tax-and-licence framework with contractual arrangements governing the project over its lifetime.

By 2006, the size and recoverability of Sakhalin II expenditure had become a direct point of confrontation with Moscow.

Russian Natural Resources Minister Yuri Trutnev publicly said that plans to increase reimbursable costs were unacceptable to the Russian side and warned that Russia could lose billions if project expenditures continued to rise. Those statements were Russian government claims about the financial consequences; they were not independent audited findings establishing a precise loss to the Russian state.

But Shell’s later filings confirm that cost recovery itself became a subject requiring agreement with the Russian authorities.

That is the crucial documentary fact.

From Project Overrun to State Dispute

This is where Sakhalin II ceased being an ordinary megaproject cost story.

If Shell had merely been constructing an entirely private project at its own financial risk, the principal questions would have concerned shareholder returns and project economics.

But Sakhalin II operated under a contract with the Russian Federation.

Accordingly, arguments over which expenditures belonged in the project budget and how those costs should be treated under the PSA had consequences for both investors and the state.

By September 2006, Russian officials were publicly connecting the cost escalation with their wider dissatisfaction over Sakhalin II. Oil & Gas Journal recorded Trutnev’s objection to increased reimbursable costs and his assertion that Russia was obliged to protect its interests.

Contemporaneous press reporting increasingly described the dispute as involving both environmental compliance and economics. The Wall Street Journal reported that Russian authorities were explicitly linking their scrutiny of Sakhalin II with the project’s cost overrun.

The motives behind the later regulatory campaign remain contested.

The existence of the budget dispute does not.

The Financing Context

There was another audience watching Sakhalin II’s mounting problems: international lenders and export-credit agencies.

Shell had been seeking major external financing for the development. The subsequent English High Court judgment in Export Credits Guarantee Department v Friends of the Earth recorded that approximately $650 million in UK-backed project finance support had been sought and that the scheme was regarded by ECGD as sufficiently complex and sensitive to require consultation across government departments.

That litigation concerned access to environmental information.

It did not adjudicate the Sakhalin II cost overrun or determine whether Shell had mismanaged the project.

But the judicial record demonstrates how extensively the project was being scrutinised outside Shell and Russia while its cost estimate was escalating.

Commercial lenders, state export-credit agencies, environmental experts, Shell’s shareholders and the Russian authorities were all examining different aspects of the same development.

A $10 billion revision was impossible to isolate from that wider scrutiny.

Shell Was Still Committed

Despite the scale of the problem, Shell did not publicly retreat from Sakhalin II.

Its July 2005 filing stressed the substantial resource base — 17.3 trillion cubic feet of gas and one billion barrels of oil — and noted that more than 75% of LNG capacity had already been sold under long-term contracts. Construction was already well advanced.

Malcolm Brinded said Shell remained committed to completing the development and delivering value both to shareholders and Russia.

The economics had deteriorated on the cost side, but rising oil and gas prices provided a countervailing benefit. Contemporary reporting records Brinded making precisely that point.

Sakhalin II was therefore not regarded by Shell as an abandoned or economically worthless development.

The problem was how to finish it — and under what ownership, budget and political conditions.

December 2006: The Budget and the Ownership Change Converge

The documentary climax came on 21 December 2006.

Royal Dutch Shell filed two highly significant announcements.

In one, Shell, Mitsui and Mitsubishi said they had reached agreement with the Russian Ministry of Industry and Energy concerning the amended Sakhalin II budget and cost recovery. Shell stated that the Production Sharing Agreement would continue and that the amended Phase 2 budget was expected to receive Supervisory Board approval.

In the other, Shell announced a protocol under which Gazprom would acquire 50% plus one share of Sakhalin Energy for $7.45 billion in cash.

Shell’s stake would fall from 55% to 27.5%. Mitsui’s would fall from 25% to 12.5%, and Mitsubishi’s from 20% to 10%. Gazprom would become the controlling shareholder.

The two developments occurred on the same day.

One settled the immediate argument over budget and cost recovery.

The other ended Shell’s majority control.

That juxtaposition is central to the Sakhalin II story.

This Does Not Prove a Forced Expropriation

The political circumstances surrounding Gazprom’s entry have generated strong language ever since.

Contemporaneous Western reporting frequently portrayed Moscow’s environmental and regulatory campaign as pressure designed to force Shell to surrender control. Russian officials, by contrast, publicly presented their actions as enforcement of environmental obligations and protection of the state’s economic interests.

The documentary evidence examined in this instalment demonstrates intense pressure, a serious budget dispute and a fundamental ownership change.

It does not, by itself, prove that every regulatory action taken by Russia was fabricated solely to obtain Sakhalin II.

Nor does it establish that Shell freely chose the final ownership structure in circumstances equivalent to an ordinary arm’s-length transaction.

Those are questions requiring the regulatory and political record examined in the next files.

The correct documentary position is narrower:

Shell began Phase 2 as the 55% controlling shareholder of a project publicly estimated at approximately $10 billion.

The project’s estimated cost rose to approximately $20 billion.

The Russian government challenged the treatment of project expenditure and cost recovery.

By the time agreement was reached on the amended budget, Gazprom was simultaneously entering the project as majority shareholder.

Those facts require no embellishment.

What Is Established

Shell’s own SEC-filed documents establish that Sakhalin II Phase 2 was publicly associated with an approximately $10 billion investment when the development decision was announced in May 2003. First LNG was then planned for the second half of 2007.

Shell’s 14 July 2005 filing establishes that Sakhalin Energy subsequently anticipated costs around $20 billion, including development and drilling through 2014, and expected LNG deliveries in summer 2008. The estimate was still provisional and subject to review.

Shell’s 2005 Annual Report later characterised Sakhalin II as suffering substantial cost overruns and recorded management’s intention to learn from them.

It is also established that the increased costs became a point of dispute with Russian authorities, particularly over reimbursable expenditure and the project budget.

Finally, Shell’s December 2006 SEC filings establish that agreement over the amended budget and cost recovery coincided with a protocol transferring majority ownership of Sakhalin Energy to Gazprom for $7.45 billion.

What Is Alleged or Contested

Russian officials alleged that the increasing recoverable costs could deprive the Russian Federation of very large sums of anticipated revenue.

Those statements were part of the dispute and should not automatically be treated as independently established calculations.

Western journalists, environmental organisations and other critics subsequently argued — sometimes explicitly — that Russia’s environmental enforcement campaign was being used as leverage to force Shell and its Japanese partners to surrender control to Gazprom. Russian authorities disputed that characterisation and maintained that legitimate environmental and financial interests were at stake.

This instalment does not resolve that dispute.

It establishes the economic circumstances in which it arose.

What Remains Unresolved

The public documentary record does not permit a precise allocation of the extra approximately $10 billion between inflation, currency movements, contractor escalation, engineering complexity, environmental mitigation, regulatory delay, inadequate original estimating and other causes.

Nor does the material examined here establish that any particular Shell executive knowingly approved an estimate he or she believed to be false.

Shell’s own public record supports the conclusion that the original budget and schedule proved seriously inadequate.

That is different from proving intentional deception.

Similarly, the close timing between the Gazprom asset-swap discussions and Shell’s July 2005 cost disclosure raises legitimate historical questions, but the evidence examined here does not establish deliberate concealment of the revised cost from Gazprom.

Those distinctions should remain intact.

Commentary

There is a temptation, looking backwards, to treat the $20 billion announcement merely as another milestone on the road to Gazprom’s takeover.

That understates it.

The cost escalation fundamentally altered the political economics of Sakhalin II.

When Shell committed to Phase 2 in 2003, it was presenting Russia, investors, customers and potential lenders with a development costing approximately $10 billion.

Two years later that number had become approximately $20 billion.

For any megaproject, that would be serious.

Under a Production Sharing Agreement involving a sovereign state, it was explosive.

The consequences reached beyond Shell’s shareholders because Russia disputed how much of the enlarged expenditure should be recognised for project-budget and cost-recovery purposes.

At the same time, Shell was attempting to bring Gazprom into the project through an asset swap.

Then environmental enforcement intensified.

Then negotiations changed.

Then Gazprom entered not as the anticipated 25%-plus-one-share partner but as the owner of 50% plus one share.

It would be simplistic to say that the cost overrun alone caused Shell to lose control.

The record does not support such a single-cause explanation.

But it would be equally difficult to understand the 2006 confrontation without it.

The $20 billion shock changed Sakhalin II from an extraordinarily difficult engineering project into an increasingly difficult political bargain.

And by the end of 2006, Shell was no longer the party holding the controlling hand.

Source Record

The principal documentary records are Shell’s own corporate filings with the United States Securities and Exchange Commission.

The 15 May 2003 Stock Exchange release records the Phase 2 investment decision, Shell’s 55% interest, the approximately $10 billion investment estimate and the planned second-half-2007 first LNG cargo.

The 14 July 2005 Shell Sakhalin II Project Schedule and Cost Update, also filed with the SEC, records the provisional approximately $20 billion estimate, drilling through 2014, the revised summer-2008 LNG timetable, continuing budget review and consultation with Russian authorities.

Royal Dutch Shell’s 2005 Annual Report and Form 20-F subsequently described the Sakhalin II increase as a substantial cost overrun and recorded both the Gazprom asset-swap proposal and Shell management’s acknowledgement that lessons needed to be learned.

The 21 December 2006 Shell Form 6-K filings record agreement with the Russian Ministry of Industry and Energy concerning the amended budget and cost recovery and, separately, the protocol under which Gazprom would acquire 50% plus one share of Sakhalin Energy for $7.45 billion.

Contemporaneous reporting from The Guardian, The Wall Street Journal, UPI and Oil & Gas Journal provides additional evidence concerning Shell’s publicly stated explanations for the escalation, Gazprom’s reaction and the Russian government’s objections to increased reimbursable expenditure. These reports are used as contemporaneous reporting rather than as substitutes for Shell’s primary filings.

The later High Court judgment in Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin) provides the judicial record concerning proposed UK project-finance support and government consideration of Sakhalin II. That litigation concerned environmental information disclosure and made no finding on responsibility for the cost overruns.

Archive disclaimer: Cost estimates changed over time and were expressed on differing stages of project definition. The comparison between approximately $10 billion in 2003 and approximately $20 billion in 2005 reflects Shell’s own published figures, but the later estimate expressly included planned development and drilling activity through 2014. Russian government estimates of potential losses are identified as government claims rather than independent findings. Nothing in this instalment alleges fraud, deliberate concealment or unlawful conduct unless expressly attributed to an identified source or competent authority. Site wide disclaimer also applies.

Next Archive File SLF-2007-026 — The Sakhalin Papers XVI: The Environmental Offensive — When Moscow Turned the Screws on Shell

By 2006, the argument was no longer confined to spreadsheets.

Russian environmental authorities began attacking the physical execution of Sakhalin II: pipeline construction, river crossings, water permits, forestry damage and alleged breaches of environmental approvals.

Shell and its partners faced the possibility that key permissions could be suspended or revoked.

Western governments and journalists increasingly suspected that environmental enforcement was being used to force Gazprom into control of the project.

Russia insisted it was enforcing its laws.

Then something remarkable happened.

Once the ownership dispute was resolved and Gazprom obtained the controlling stake, the political temperature surrounding Sakhalin II changed dramatically.

The next file will examine the actual regulatory documents, the allegations made against Sakhalin Energy, what was genuinely wrong on the ground, what remains disputed — and whether the famous “environmental offensive” was conservation enforcement, Kremlin leverage, or an uncomfortable mixture of both.

THE SHELL LEAKS FILES: 10 AUGUST 2026 was first posted on August 10, 2026 at 8:51 pm.
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Mines approved with less public input and more environmental risk under Trump

The Trump administration is rushing to permit mines on federal public lands across the west without safeguards to protect our land, air, and water. Mine projects are being fast-tracked without public comment periods or proper environmental studies. Tribal consultation and endangered species protections are under attack. 

State laws and regulations are more important than ever to hold the line in the face of federal deregulation and corruption. But one county in California is considering giving up its control over any project that the Trump administration approves. 

California counties provide local oversight for proposed mines

California law requires that mining projects, including those on federal public lands, go through county permitting to minimize environmental impacts. Mining projects must comply with the Surface Mining and Reclamation Act and the California Environmental Quality Act, as well as other state laws and regulations that require tribal consultation, protections for endangered species, and for the Western Joshua tree. 

Taken together, these laws and regulations ensure tribes and the public are informed of potential impacts, and that decision-makers have the best information to protect California’s public lands.

San Bernardino County is considering revising its mining regulation. The County calls this a standard update, but sloppy drafting risks giving up local oversight for projects that have approval from Washington D.C. 

Because federal requirements are weaker than California’s, this means new mining projects will be approved without the public’s knowledge, and with serious impacts to treasured public lands, air, and water. These changes could make it easier for companies like Dateline Resources to mine in Music Valley, on the border of Joshua Tree National Park.

Opportunities to act

The San Bernardino County Board of Supervisors is holding a public hearing on the revised mining regulations at 9 a.m. on Tuesday August 18th. This is the first of two readings of the mining regulations ordinance.

If you live in San Bernardino County, please take action here and tell the board to deny the ordinance until it is revised.

For even more impact, you can give your oral comment in person or virtually at 385 N. Arrowhead Ave., 1st Floor, Covington Chambers, San Bernardino, CA 92415 or remotely by telephone. Online registration is available by clicking “Register to Speak.”

People who are not San Bernardino residents can help by spreading the word. Please reach out to friends in San Bernardino County to let them know what’s happening.

A mining claim in Music Valley in San Bernardino County

The post Don’t let San Bernardino County permit mines without public input appeared first on Earthworks.

The post How to Report to City of Merced Code Enforcement / Cómo Reportar al Departamento de Cumplimiento de la Ciudad de Merced appeared first on Leadership Counsel for Justice & Accountability.

More than 6,500 people have signed a petition demanding that FERC reject the Mountain Valley Pipeline expansion as state concerns remain unresolved.

RICHMOND, VA — On Friday, August 7, the Federal Energy Regulatory Commission (FERC) issued its Environmental Assessment (EA) for Mountain Valley Pipeline’s (MVP) proposed “MVP Boost” expansion. While the assessment concludes that the project does not “significantly [affect] the quality of the human environment,” critics say the EA leaves a variety of critical questions unanswered. Additionally, the Virginia Department of Environmental Quality has suspended its review of MVP’s proposed compressor station permit due to inconsistent filings. The DEQ also raised concerns about environmental justice and community outreach to MVP, which the company has not resolved. Now, more than 6,500 people have signed a petition urging FERC to reject the MVP expansion. 

“As a resident in Elliston, we already have the trains, which are a situation in themselves that block us in where we can’t get out,” said Penny Nunes, an Elliston, Virginia resident. “Now we’ve got gas in the pipe. I find it interesting that our firehouse is in the blast zone. You can see from the blast zone: a trailer park, housing development, and ROWE Furniture, a business with about 500 employees. As soon as they put gas in the pipe, I thought about moving. But I am not gonna move. I’m gonna stay here, and I am gonna fight as hard as I can to stop this. And for FERC to do something that Virginia DEQ said is incomplete, that’s one agency stepping on the other. DEQ is right: you got a problem, you gotta fix it. But FERC may just ignore our problem and go on with it.” 

The MVP Boost proposal would drastically increase gas capacity on the 303-mile Mountain Valley Pipeline system and add a new 136,900-horsepower compressor station in Montgomery County, Virginia, near homes, farms, a busy railroad crossing, and an environmental justice community in Elliston. FERC is reviewing the industrial water use associated with this major fossil-fuel project, even as Virginia faces mounting concerns about industrial water use prompting state lawmakers to call a special session on stronger water protections. 

“The people of Elliston, Virginia deserve clean air and a safe, healthy community,” said Russel Chisholm, Managing Director at Protect Our Water, Heritage, Rights. “EQT and MVP’s massive Boost expansion and data center fever dreams directly threaten that safety while recklessly pushing the planet toward a future of more fire, flood, and displacement. People everywhere are fighting back – and prevailing – against these greedy projects by saying, ‘Enough is enough.’”

The Montgomery County Board of Supervisors previously found the proposed site unsuitable, citing safety concerns that the evacuation route from the site would be blocked by train traffic. For community members, that one concern does not resolve the bigger question: whether it is appropriate to place a massive fossil fuel compressor station in a community already burdened by pollution and safety risks.

“Time and time again, FERC commits itself to an unreality where massively polluting and unsafe fossil fuel projects somehow pose no significant threat to the environment or the neighboring communities who must shoulder the burden,” said Joshua Vana, Director of ARTivism Virginia. “A rational review of the dangers posed by MVP Boost and its Swann Compressor Station should alarm any conscious person. Whether it be harmful air pollution dumped on an environmental justice community in Eastern Montgomery County, the cumulative impacts of drastically increasing MVP’s methane emissions in a world that’s on fire, or gambling on the safety of an already compromised pipeline – this project is nothing more than another bad idea from MVP, meant to cash in during a time of gross environmental deregulation, nauseating corruption, and an intensifying stench of skyrocketing corporate profits. This project must never be built.”

MVP Boost also comes after years of concerns surrounding the existing Mountain Valley Pipeline, including state violations, safety orders, and construction impacts that residents say underscore why further expansion should not be approved. Community and environmental advocates say the federal government should not advance the project while Virginia’s permit process remains paused and local opposition remains overwhelming.

“FERC is trying to build on a foundation that DEQ has already found to be flawed,” said Zander Pellegrino, Senior Field Manager at Chesapeake Climate Action Network. “MVP wants to lock us into outdated fossil fuel infrastructure and decades of climate pollution when we urgently need to transition to clean energy. It is unacceptable that the company is trying to do so on the back of environmental justice communities that have clearly said they do not want this project in their neighborhoods. FERC should stop MVP Boost and reject this dangerous expansion before it puts more communities at risk.” 

The EA was issued by FERC Friday, August 7, 2026, followed by a comment period ending on September 6, 2026, and a Federal Authorization Decision deadline on November 5, 2026.

###

Chesapeake Climate Action Network is the first grassroots organization dedicated exclusively to raising awareness about the impacts and solutions associated with global warming in the Chesapeake Bay region. Founded in 2002, CCAN has been at the center of the fight for clean energy and wise climate policy in Maryland, Virginia, and Washington, DC.

The post Thousands Urge Feds to Reject “MVP Boost” While Virginia DEQ Suspends Impact Review appeared first on Chesapeake Climate Action Network.

As the RPM team embraces socialist traditions with a summer break, we flag choice recent and archive reads and preview an exciting autumn to come

The post August pause and autumn updates appeared first on Red Pepper.

Set beneath the living canopy of Corkscrew Swamp Sanctuary’s ancient cypress forest, this outdoor exhibit brings large-format photography into the landscape that inspired it. On view from November...

Oceans globally recorded their hottest July ever last month, according to a new analysis. The severe ocean heat was evident around Europe, which is coping with a scorching summer.

Read more on E360 →