By Timothy Gardner
WASHINGTON (Reuters) - An environmental group and a law clinic have petitioned the U.S. Securities and Exchange Commission to investigate whether Royal Dutch Shell (L:RDSa) has adequately disclosed to investors the risks of oil exploration in Arctic waters, the groups said on Tuesday.
The U.S. Interior Department is mulling whether Shell can drill test wells for crude and natural gas off Alaska this summer. The company abandoned exploratory drilling efforts in 2012 after an accident-plagued season in a region with little infrastructure for emergency response.
Oceana, an international environmental group, and the Abrams Environmental Law Clinic at the University of Chicago, said the action they filed on Monday is part of a longer effort to get Shell to disclose risks to investors of the costs of any catastrophic oil spill and other potential accidents.
"There is no proven way to clean up a spill in the icy Arctic conditions and Shell has an obligation to make investors aware of that," said Andrew Sharpless, chief executive officer of Oceana.
While catastrophic oil spills are rare, one in the Arctic could cost $10 billion (£6.53 billion) or more to clean up due to the low temperatures, ice and lack of infrastructure, the law clinic said.
Shell is satisfied its disclosures comply with SEC's legal requirements, said spokesman Curtis Smith. A "very unlikely spill in the Arctic would not be financially material" to Shell given the precautions it has taken to prevent and respond to any massive spill, he said.
The groups see the SEC petition as a first step toward enforcement, which could result in requirements to add analysis of risks to filings, injunctions against future violations, and other penalties.
Despite a steep drop in global crude prices, several energy companies covet the long-term potential of the Arctic's oil and gas riches. The U.S. government estimates the Arctic contains about 20 percent of the world's undiscovered oil and gas, with some 34 million barrels of oil in U.S. waters alone.
Shell, which has spent about $6 billion on exploration in the Arctic, lost control of its massive Kulluk drilling rig in 2012 after the Coast Guard evacuated the 18-man crew. The Kulluk ran aground, causing damage to the rig, and Shell later scrapped it.