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More trouble in the pipeline?
Richard Delevan



"HAVE you been here before?" asks the security guard. It's the lobby of Shell Ireland's Dublin headquarters, though you wouldn't know it. The dominant feature in the foyer is a piece of abstract art . . . a wall installation of three glass panels with circles sporting soft, modish colours.

The Shell logo is nowhere to be seen, save very discreetly on the corner of some brochures on the table, sitting comfortably next to flyers for current Dublin theatre.

"Then you'll need to watch this, " says the guard, indicating a video screen sitting near eye level on the desk. We're treated to a two-and-a-half minute presentation on safety, including such directives as 'no running' and 'do not read while walking' and 'place lids on coffee or tea being carried'.

Depending on how you view the situation, the video is either ironic or surreal, given that safety has been the main bone of contention between the oil giant and its foes, the so-called Rossport Five and the Shell to Sea campaign. The discretion is easier to understand, given how the dispute over the pipeline to bring gas ashore from the Corrib field 80 kilometres off the coast of Mayo escalated last summer.

Andy Pyle, Shell's top executive in Ireland and the man in charge of the Corrib Gas project, is a soft-spoken, bespectacled engineer with a runner's build. It's the day after the Minister for Communications and Natural Resources, Noel Dempsey, released the independent safety report from consultants Advantica. Shell announced that it accepted and would abide by all of the report's recommendations, including reducing the planned pressure in the pipeline to 144 bars.

Pyle looks only slightly harried, an impressive feat considering he's in the middle of a full day's worth of media interviews before heading down to Mayo on Friday morning.

Given that the events of last summer, with five men jailed for 94 days for refusing to comply with a court order to desist from interfering with the Shell pipeline, will doubtless be included in public relations textbooks as a case study on how not to win over a local community, the natural first question is whether the company recognises that it didn't have to be this way.

"Yes, mistakes were made last year.

We've publicly apologised and I'm personally extremely sorry for the part that we played in events that ended up with five people in prison, " he nods. "That was never our intention. We never planned or expected people to end up in prison. Totally unnecessary."

The project is now severely behind schedule as a result, with no work completed since the middle of last year. Pyle declines to put a figure on the amount of money Shell has lost as a result of the delay.

"Let's say expensive, " he chuckles. "But even more important than the cost is the time factor. It delays the delivery of the gas, delays the point at which Ireland can start benefiting from Corrib."

He lists those potential benefits to include security of gas supply for Ireland, 700 construction jobs in Mayo and a boost to Ireland's balance of payments.

But it might have all been scrapped.

Pyle didn't deny that, if the price of gas hadn't soared along with oil prices over the past year, Shell might have decided to exit the project altogether.

"Yes, increasing gas prices have made the project viable, and it might have been less viable. But the important issue is that it's still vitally important for Ireland. Obviously gas prices are a factor, but security of supply is even more important than that."

It's a key benefit for Ireland to which Pyle is anxious to return. Tapping the growing alarm about the country's energy vulnerability expressed by commentators and politicians, he makes his case.

"Currently we import 85% of gas and that's increasing. We're at the end of a long supply chain of gas coming from Russia and North Africa. Lots of concern about the security of that supply. To me, that's the most important. We'll be supplying 50% to 60% of Ireland's gas needs in the initial few years."

Given that public servants have long recognised Ireland's vulnerability to energy supply shocks, Pyle cautiously expresses some cool displeasure at the lack of support, in what he sees as the inability of Ireland's political system to put the national interest over the claims of what the company has always maintained was a small number of objectors in Mayo.

"There are a lot of factors here. In hindsight, we could have done things differently. Lots of people, including the government, could have done things differently. But I don't think anyone foresaw the situation we got into. Since it occurred obviously we all . . . ourselves, government, people in Mayo . . . have all struggled to think, how can we get through this and resolve it?

"I personally think it would be nice to have a clearer position from the political parties, but I equally recognise they've all been in a difficult situation. I think there has been some opportunism by some individuals jumping on the bandwagon.

I think that's certainly not helped to resolve it. It's probably fanned the flames of the issue more than it needed to. I'm actually more concerned about that."

In retrospect, the point of departure, the moment at which the company might have avoided what happened last summer, came about a year ago.

"Clearly last year, when landowners were objecting to the pipeline route, there was a clear opportunity to start a dialogue. We followed what I guess was the normal practice of seeking court support for our consents and permits. We started the courts injunction case not to put people in prison, but to get the courts to confirm that what we were doing was legal and correct and we had the rights to do that.

"Obviously the expectations were that people will obey the courts." He laughs without mirth. "Clearly in this situation that didn't work. Was there a moment?

Yes. The early part of last year, if we'd fully appreciated the concerns . . . and the determination . . . of the Rossport land owners, then we might have been able to start a dialogue which avoided that situation."

If bad PR, defined by a failure to take seriously the threat from local landowners and campaigners in swaying local opinion, was a major source of the company's woes, Pyle recognises that there is a tough road ahead.

Already, the media coverage resulting from his announcement seemed to suggest that Shell was shifting its position regarding the routing of the pipeline and even putting the processing terminal offshore, as demanded by another group of campaigners.

A Shell spokesperson clarified that the company had merely agreed to the ground rules for mediation set out by Peter Cassells, which require that all sides be willing to re-examine their position on each issue. It remains firm that it is virtually impossible, from a safety and environmental point of view, to process the gas at sea, a view backed up by other industry sources.

But the expectations game is already being played out, with both sides trying to reframe the outstanding questions of the dispute in the media. Both Thursday evening's RTE Six One News and Friday's lead story in the Irish Times gave the impression that Shell is far more flexible on the issues of the pipeline route and the site of the terminal than it may actually be. Pyle was fairly definitive when he spoke with the Sunday Tribune.

"Anywhere in the world you would rather develop a field like this with an onshore terminal, " Pyle said "And that's happening more and more as technology allows that to happen. We're actually very fortunate with Corrib gas. It's very dry gas, very clean, we can actually pipe it ashore. It's by far the preferred option.

But one of the drivers behind that is safety. To put a platform in the Atlantic, with people housed on it, with helicopter flights, it's a less safe option. And that's one of the reasons we would say going to sea is not an option."

Pyle cannot say for certain when work will recommence on the pipeline or terminal segments of the project, which will require at least two years of construction. But 80 kilometres off the Mayo coast, work may actually begin this week, with the arrival of a drilling rig.

"We've got a Sedco 711 [a semi-submersible rig that can drill in harsh weather conditions and rough seas in a sea depth of 1,800 feet], coming to Corrib hopefully next week, and there's a drilling programme that will run through the summer. I think we're at pains, though, to make clear that work is independent of the issues onshore, not pre-empting any discussions."

Ultimately, Pyle acknowledges, the project can't move forward without something like the consent of locals, and he seems genuinely eager for talks mediated by Peter Cassells to begin, though he is careful to say the "vast majority" of local people, rather than the five individuals or other campaigners, who may be impossible to satisfy. Unless both sides show some flexibility, it is not impossible that the matter may return to court.

"We're certainly not seeking another injunction to put people in prison. I think we still do need to have courts' confirmation of all our permits being valid where they've been challenged, but it's not pursued with the intent of people going to prison. That patently doesn't work."

CURRICULUM VITAE ANDY PYLE Age: 58
Family: Married with two sons
Background: An engineer who started with Shell in 1976, working in the North Sea, Shetland Islands and Texas before becoming chairman of Shell Ireland and chief executive of Shell Exploration and Production Ireland in 2002.

Supports: Newcastle United
Newsworthiness: Man on the spot trying to bring Corrib gas ashore.

SHELL EXPLORATION AND PRODUCTION IRELAND
Parent: Royal Dutch Shell plc, Europe's second-largest oil and gas producer.

Background: Shell has operated in Ireland since 1908. Shell acquired Enterprise Oil in 2002 and with it the rights to the Corrib field.

Employees: 80 staff, mostly in Dublin.

Financials: Shell last week reported $6.89b in first-quarter profits on sales of $76bn, up 5.3%. Profits for the exploration and production unit rose 27% to $3.74bn.

Figures for Ireland are not published.




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