Investors should be worried by Shell’s revived Arctic oil ambitions, says ShareAction
Responsible investment charity ShareAction has warned that investors should be concerned by Shell’s revived plans to drill in the Arctic, after the oil giant admitted it has failed to meet environmental targets elsewhere.
The company had suspended its plans for Arctic exploration earlier this year, but on Thursday submitted a proposal to the US government that would see it construct two rigs in the Chukchi Sea, northwest of Alaska.
However, on Wednesday Lorraine Mitchelmore, president of Shell Canada, told the Wall Street Journal that the firm is likely to miss promised targets for reducing toxic waste from its oil sands mines in Alberta.
It would not be the first time that Shell has missed environmental targets, and ShareAction say the company’s record raises serious doubts over whether it can responsibly operate in the Arctic.
“It’s worrying to see Shell apparently failing, yet again, to comply with regulatory requirements on high-risk projects,” said Louise Rouse, ShareAction’s director of engagement.
“Given the company’s highly controversial plans for US offshore Arctic drilling, investors should be troubled that the company’s focus appears to be on encouraging regulators to reduce requirements rather than ensuring full compliance with vital regulations.”
Shell has long-held ambitions for oil exploration in the Arctic, though its experiences so far demonstrate the difficulties of exploiting the region.
Since 2005, Shell has spent around $4.5 billion (£2.7 billion) exploring for oil off the Alaskan coast, but is yet to drill a single well. In that time it has seen a drilling rig run aground and lost a federal court battle over the validity of its leases in the Chukchi Sea.
Having now renewed its plans after temporarily admitting defeat, Shell is troubling environmentalists, who fear that the impact of an oil spill in the pristine Arctic environment could be devastating.
When BP’s Deepwater Horizon rig exploded in 2010, 5 million barrels’ worth of oil spilled into the Gulf of Mexico before rescue workers controlled the damage. In Arctic waters, it would be far more difficult for response teams to get to the scene.
Protestors are also concerned that the exploitation of Arctic fossil fuel reserves, made accessible for the first time as ice cover recedes, will undermine international efforts to curb climate change.
“The Gulf of Mexico oil spill demonstrates the catastrophic human, environmental and financial impacts of inadequate regulation,” Rouse added.
“Investors acting on behalf of millions of British savers should push Shell to demonstrate a commitment to full compliance with regulatory requirements prior to making any decision to undertake high risk Arctic drilling.”
Photo: Ryan McFarland via Flickr
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