Leahy and Sanders Call On Financial Regulators To Hold Oil Companies Accountable, Disclose Risks And Increase Transparency

WASHINGTON, Aug. 19 – In continued efforts to halt offshore oil drilling in the Arctic Ocean, Senator Patrick Leahy (D-Vt.) and Senator Bernie Sanders (I-Vt.) and other senators this week called on the U.S. Securities and Exchange Commission to require increased transparency from companies engaged in offshore drilling in American waters.

The senators’ call follows the Obama Administration issuing drilling rights to royal Dutch Shell plc. (Shell) to explore in the deep water off Alaska’s northwest coast for the first time in more than two decades.  The decision came only weeks after it was made public that shell had not disclosed risks inherent to drilling at unprecedented depths in one of the world’s most fragile ecosystems.

“Despite these realities, Shell has provided investors with boilerplate generalities about the potential for an accident and insisted that the company has a sufficient plan for response and clean-up.  Shell, however, has not disclosed that its techniques have not been fully tested in Arctic conditions or that they are highly unlikely to be as effective as the company has claimed.  Shell also has obscured disclosure of serious equipment problems (such as in 2012) and has not provided investors with an estimate of the likely costs of a spill and funding a subsequent response.  Furthermore, Shell’s annual reports reveal a pattern of failing to disclose litigation that concerns the aforementioned issues,” the senators said in the letter.

Leahy and Sanders were joined by 10 other senators – all of whom oppose offshore drilling -- in a letter initiated by Senator Ben Cardin (D-Md.).  The full text of the letter can be found here.

Leahy and Sanders in May voiced their deep disappointment in the administration’s decision to allow oil drilling in up to six off shore wells in the Arctic Ocean, an area they have long sought to protect.  They have often applauded President Obama’s actions to mitigate climate change and to minimize the use of the dirtiest fossil fuels, including the President’s decision earlier this year to veto legislation that would have approved the Keystone XL pipeline, and last year’s issuance of clean power plant rules limiting carbon emissions, but they see Artic drilling as being ecologically dangerous and irresponsible.