29 Jan 2015

Shell resumes Arctic drilling plans

It was only last month that oil giant Royal Dutch Shell agreed to pay £55 million to compensate residents of the Bodo community in the Niger Delta for not one, but two oil spills.

The oil choked miles of mangrove swamps there and caused headaches and eyesight problems.

Amnesty said the price of fish rose tenfold and many fishermen had to find alternative ways to make a living. Local drinking water was contaminated.

So you can perhaps understand the collective gasps today as Shell said it planned to press ahead with another risky project – this time in the Arctic.

People had hoped Shell would walk away from plans to drill in Alaska’s Chukchi Sea but the group’s Chief Executive Ben van Beurden said he hoped to crack through the ice as soon as this summer.

A bit premature perhaps; he hasn’t got the operating permits yet, and previous attempts have left Shell with numerous legal challenges. But so great is the world’s demand for oil – and so large the potential reserves in the Arctic – that Mr van Beurden plans to press on regardless.

Oil prices

It’s a funny time to be talking about demand for oil when all the headlines are going in the opposite direction. There’s a global glut of oil, prices are tumbling. It’s because of those problems that Shell also said today it would have to cut about £10 billion worth of projects and investment this year. But it’s sticking with plans for the Arctic.

Shell is of course thinking about profits in the long-term. Oil prices rise and fall. And he’s right, the world will always need more oil. But the images of pristine ice and polar bears desperately swimming from clump to clump make Shell’s plans for the Arctic particularly controversial.

The Artic is already in deep trouble from global warming. The risk is that Shell’s corporate ambitions will only make things worse. An oil spill there, with thick sheets of ice trapping the oil underneath, would make any clean up virtually impossible.

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One reader comment

  1. Dr Henry Adams says:

    Shell ignores climate change and so does this article:

    Even Mark Carney – but not Cameron and Osborne – acknowledges that we can only burn a fifth to around a quarter or so (depending on level of risk chosen) of existing global fossil fuel reserves to have a reasonable chance of keeping global average temperature rise below the 2 degrees agreed by nations at the Copenhagen climate accord in 2009. Also – 2 degrees is now considered by the Tyndall Centre to be the threshold between dangerous and very dangerous climate change. 1.5 degrees would be bad enough.

    Shell’s decision is not just financially risky – gambling on an increase in oil price per barrel to at least around $100 from now $50, and highly risky pollution-wise, but also highly risky as regards our climate.

    It’s the corruption of governments including those of the US and UK by fossil fuel interests that allows Shell’s decision to happen. The UK government is riddled by embedded conflicts of interest with the fossil fuel industry and its financiers, which operates to prevent government action on climate change.

    Have you read Shell’s letter to “Shell’s contact Minister for Shell” in the UK government, urging Vince Cable to render climate legislation ineffective?

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