This week, the global oil and gas industry is celebrating International Petroleum Week (IPW) – an “annual thought-leadership event for influencers and decision-makers from the oil and gas industry”. Pollutocrats*, here is some free thought leadership for you: stop wrecking our planet, harming its people and destroying our future prosperity.
Adam Smith perfectly described the natural outcome of such gatherings and our inability to prevent them in a democracy: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice.” Quite.
IPW will explore such progressive ideas as: oil and gas developments in the Arctic; future investment in Asia-Pacific, Iraq, Kurdistan and the eastern Mediterranean; and whether we are heading for a golden age of gas. Despite the ubiquity of climate change at the World Economic Forum in Davos and other international events recently, there’s no room on the agenda for our fragile environment or sustainability at IPW.
Present will be big oil: BP plc, Chevron Corporation, ExxonMobil Corporation, Royal Dutch Shell plc, Total SA and ConocoPhillips Company. These are not the biggest oil and gas companies in the world, which are the state-owned national oil companies (NOC) of Saudi Arabia, China and Russia.
However, they are the largest publicly-owned corporations, so the ones we can potentially influence through share ownership. They are also the ones you would hope have some ounce of humanity left, living in free and democratic societies as their boards do, alongside some common purpose with their fellow countrymen. Naive and idealistic, we know.
Just as a reminder, here’s a little rundown of the industry’s contribution to global environmental, social and governance affairs, courtesy of Wikipedia**.
BP has been involved in several major environmental and safety incidents. Among them were the 2005 Texas City Refinery explosion, which caused the death of 15 workers and resulted in a record-setting OSHA fine; Britain’s largest oil spill, the wreck of Torrey Canyon; and the 2006 Prudhoe Bay oil spill, the largest oil spill on Alaska’s North Slope, which resulted in a $25m civil penalty, the largest per-barrel penalty at that time for an oil spill. Source.
Chevron has been involved in several controversies and environmental and safety incidents. In 1950, then Standard Oil was convicted of criminal conspiracy for their part in the great American streetcar scandal. From 1970 to 2000 they evaded $3.25 billion in federal and state taxes through a complex petroleum pricing scheme. In 2012, a large fire due to aging equipment and lack of oversight erupted at a Chevron refinery in Richmond, California. In Ecuador, Chevron has been involved in an ongoing class action lawsuit filed by indigenous residents. Source.
ExxonMobil has been subject to numerous criticisms, including the lack of speed during its cleanup efforts after the 1989 Exxon Valdez oil spill in Alaska, widely considered the number one spill worldwide in terms of damage to the environment. ExxonMobil has drawn criticism for funding organisations that are sceptical of the scientific opinion that global warming is caused by the burning of fossil fuels. Questions have been raised about the legality of the company’s foreign business practices. Critics note that ExxonMobil increasingly drills in terrains leased by dictatorships. The company has also has been the target of accusations of improperly dealing with human rights issues, influence on American foreign policy, and its impact on the future of nations. Source.
Shell has been criticised for its businesses in Africa, notably in relation to protests of the Ogoni in 1995. In 2004 Shell overstated its oil reserves, resulting in loss of confidence in the group. The presence of companies like Shell in the Niger Delta has led to extreme environmental issues in the Niger Delta. In Magdelena, Argentina, Shell was responsible for the largest oil spill that has ever occurred in freshwater in the world. A number of incidents over the years led to criticism of Shell’s health and safety record, including repeated warnings by the UK Health and Safety Executive about the poor state of the company’s North Sea platforms. In the beginning of 1996, several human rights groups brought cases to hold Shell accountable for alleged human rights violations in Nigeria. Shell announced its $4.5 billion Arctic drilling program in 2006 by using drilling rigs Kulluk and Noble Discoverer. Source.
In 1998 the Total SA Company was fined €375,000 for an oil spill that stretched 400 kilometres from La Rochelle to the western tip of Brittany. The AZF chemical plant which exploded in 2001 in Toulouse, France. On 16 January 2008, Total was required to compensate all of the victims of the pollution caused by the sinking of the ship Erika. Total is being implicated in a bribe commission scandal which is currently emerging in Malta. Despite the European Union’s sanctions against the military dictatorship Myanmar, Total is able to operate the Yadana natural gas pipeline from Burma to Thailand. On 16 December 2008, the managing director of the Italian division of Total, Lionel Levha, and ten other executives were arrested… for a corruption charge of €15m to undertake the oilfield in Basilicata on contract. In April 2010, Total was accused of bribing Iraqi officials during former dictator Saddam Hussein’s regime to secure oil supplies. Total has been a significant investor in the Iranian energy sector since 1990. Total is suspected of concealing the source of its oil imports from Iran, [where] in 2013 a case was settled that concerned charges that Total bribed an Iranian official with $60m. Source.
According to the Political Economy Research Institute, ConocoPhillips ranked 13th among US corporate producers of air pollutions. In 2003, ConocoPhillips was named as a defendant in a lawsuit brought by Green Alternative, an environmental group based in the former Soviet republic of Georgia. The suit claimed that a number of foreign oil companies colluded with the Georgian government to induce authorities to approve a $3 billion pipeline without properly evaluating the environmental impact. In June 2011, ConocoPhillips China Inc, a wholly owned subsidiary of ConocoPhillips, was responsible for a series of oil spills in Bohai Bay. Source.
The charge sheet is long and goes on and on. And on. All the above ignores the industry’s not inconsiderable contribution to climate change and air pollution, with the concomitant health problems of cancer, respiratory, heart and skin disease.
It ignores the industry’s less than subtle efforts to undermine public understanding of, and confidence in, climate science. Or its considerable skill at bullying governments, bribing politicians, demanding vast tax subsidies (far, far in excess of renewable subsidies), and attempting to kill off the nascent clean energy industry.
It ignores the carbon bubble that massively overvalues these companies, threatening pensions and economies across the developed world.
It also ignores the industry’s role in encouraging the world’s wealthiest nations to fight illegal wars, overthrow fledgling democracies and prop up dictators to support commercial interests. This leads to a world living under the shadow of terrorism.
The world needs oil today. The world needs to wean itself off oil tomorrow. The world needs big oil to show a duty of care to life on Earth before it is too late. If not, we need to divest, divest, divest, while they drill, drill, drill.
Will it make a difference when the NOCs have such a large market share in the global oil and gas market? In some small way, yes. And every little helps. As for NOCs, many Middle Eastern governments see huge opportunities in solar energy and so are doubly blessed by both the fossil and solar ages. They just need to get over a few internal instabilities. China is slowly beginning to understand the importance of clean air in its smog-afflicted megacities.
Big oil, we can but applaud your evil genius. Like the backstreet drug dealer, you got us hooked on your product and liquidated any rivals, again and again. When you couldn’t get your own way legitimately, you threatened then harmed or killed those who stood against you.
Never in the history of human commerce was so much owed by so few corporations to the detriment of so many innocent people.
If only all those thousands of brilliant and decent scientists and engineers you employ had devoted their intelligence, industry and subsequent wealth to making the world a better place, rather than recklessly profiteering from its ongoing degradation.
* We owe a debt of gratitude to James Murray of BusinessGreen for this truly excellent and inspired neologism
** So sue them
Responsible Energy Investments Could Solve Retirement Funding Crisis
Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.
Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?”
Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.
Tip #1: Focus & Determination
Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.
Tip #2: Minimize Spending
One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!
Tip #3: Visualize Your Goal
You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.
Investing in Clean Energy
One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.
With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.
The Future of Green Biz
As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.
Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.
In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!
What Should We Make of The Clean Growth Strategy?
It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?
The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.
A Strategy, Instead of a Plan
But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.
The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.
A 12 Month Green Energy Initiative with Real Teeth
But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.
Electrical Storage Development at Center of Broader Green Energy Push
While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.
The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.
But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.
This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.
Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.
In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.
It’s a step in the right direction. But, inevitably, there’s much more work to do.
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