The need for “Arctic free fuel” – can ethical businesses justify using oil drilled in the Arctic?
In his blog in Business Green, James Murray writes of the potential to get businesses which aspire to be ethically and environmentally responsible to refuse to use oil drilled from the Arctic. James says it is clear that not all is the same ethically, and the dangers of damage to the Arctic from drilling make it even worse than other sources. Should an ethical business be using fuel that has been sourced from one of the world’s few remaining pristine habitats, particularly when the record of those companies seeking to drill in some of the planet’s most hostile conditions is already laughably poor? Oil companies will try to claim Arctic oil cannot be separated from other oil, but that really should not be beyond the wit of oil executives.. Now is the time for the world’s biggest corporate consumers – the airlines, the food giants, the logistics companies – to declare that they want no part of the reckless oil rush in the Arctic, and they won’t buy Arctic oil. What’s needed is a group of progressive CEOs, from airlines, consumer goods firms, clothing companies etc to send out the “Arctic-free fuel” message.
Do you really want your oil from the Arctic?
Responsible businesses need to ask if they are comfortable supporting Arctic oil exploration – Arctic-free oil can be made a reality
18 Oct 2013, (Business Green)
Oil is oil, right? The fuel that powers the cars, jets, tractors and industry that drives the global economy is a commodity. Quality standards ensure, for the most part, that each barrel of oil, each visit to the petrol pump, is the same as any other. Meanwhile, the combination of OPEC and global exchanges set a price, meaning the underlying cost of each barrel of oil is the same.
But anyone who peeks beneath the bonnet of the global oil industry quickly discovers that, when it comes to how oil is sourced, not all oil is the same.
The litany of scandals that have afflicted the oil industry would lead many environmental campaigners to conclude there is no such thing as a “clean” barrel of oil, but it is clear some barrels are cleaner than others. It is always simplistic to draw binary distinctions, but it could be argued that there is such a thing as “good” and “bad” oil, or, if you’d prefer, “bad” and “less bad” oil.
For example, the UK and US governments may face justified criticism over the tax breaks they hand their domestic oil industry and their mixed record of enforcing environmental and safety standards.
But at least environmental and safety standards are in place and inspection regimes, for all their faults, are implemented. Similarly, a recent report from the Carbon Tracker group demonstrated how Brazil’s emerging offshore oil industry could continue to play a role in a carbon constrained world, given that it has the ability to extract oil in a relatively carbon efficient fashion.
Not all parts of the oil industry are so lucky. Canada’s tar sands are infamously producing some of the most emissions-intensive oil in the world, burning through the planet’s available carbon budget at a rapid clip. The standards and regulations imposed on the UK and US oil industry are far from perfect, but they are a paragon of green best practice compared to the governance found in countries such as Nigeria and Ecuador where multinational companies have been able to run roughshod over local environmental concerns.
And then there is the Arctic.
Should a business that is committed to sustainability be using fuel that has been sourced from one of the world’s few remaining pristine habitats, particularly when the record of those companies seeking to drill in some of the planet’s most hostile conditions is already laughably poor?
Whatever you think of Greenpeace’s tactics, can an ethical business that is committed to ensuring human rights are respected across their supply chain be entirely happy with oil exploration that is supported by the Russian state’s willingness to charge environmental protesters with piracy?
It is these questions that underpin Brendan May’s fascinating proposal for “Arctic Free Oil”.
The oil majors obviously have a huge vested interest in ensuring that oil remains an interchangeable commodity delivered through opaque supply chains. But why should businesses that refuse to accept a lack of supply chain transparency for other environmentally risky commodities – such as timber, palm oil and growing numbers of minerals – be kept in the dark about the origins of the commodity that arguably has the worst environmental record of the lot? The answer is they shouldn’t.
The oil industry will inevitably argue it is too complex or costly for it to track where each barrel of oil has come from and sort them into piles of “good oil” that has been extracted and refined in an efficient and responsible manner and “bad oil” that ran the risk of Arctic spills or unacceptably high carbon footprints. But the timber industry has largely managed to do exactly that through independently verified certification schemes. The palm oil industry is currently working to do something similar, and despite some justified criticism of the sustainable palm oil label is making encouraging progress. We are even seeing auditors venturing into war zones in an admirable attempt to bring an end to the use of conflict minerals. When seen in this context it should not be beyond the wit of oil executives to disclose whether oil has come from the North Sea or the Arctic Sea.
The realities of climate change mean that we need to end our reliance on oil and transition towards cleaner fuels, while leaving more and more oil in the ground. The business community has a crucial role to play in enabling this transition, through the development and deployment of clean technologies. But this transition will take time and while it progresses ethical businesses have an obligation to ensure the oil they do use is sourced in as environmentally responsible manner as possible.
As May has argued, (below) there is a closing window of opportunity to make “Arctic Free Oil” a reality.
The technical challenges faced by companies exploring in the Arctic mean that none has managed to make it work as yet. Now is the time for the world’s biggest corporate consumers – the airlines, the food giants, the logistics companies – to declare that they want no part of this reckless oil rush and will not purchase fuel from those companies working in the Arctic.
The PR benefits for such companies would be immense, the business case for Arctic exploration would be hugely undermined, and, most importantly, the signal would go around the world that not all oil is the same.
On “Arctic-free fuel”:
Shell refuses to save the Arctic, but its customers still could
Brendan May argues progressive business leaders could create a market free from Shell’s ecological vandalism
By Brendan May, Robertsbridge Group
24 Jul 2013 (Business Green)
If Shell executives thought things had gone a bit quiet after the delay to their Arctic joyride last summer, they were soon corrected when the Greenpeace Shard protest happened earlier this month.
Shell isn’t entirely stupid when it comes to future energy challenges. There are probably worse companies around. Which is why its continued bungling over the Arctic, infamous not just among environmentalists, but noted by the Financial Times and other defiantly non sandal-wearing institutions, is so extraordinary.
Shell does not understand that increasing numbers of citizens around the world are unwilling to tolerate its gamble into one of the last great pristine corners of the planet. Investors are none too thrilled either – a deep sea drilling accident in the Arctic would make BP’s Deepwater Horizon liabilities look like a tea party (and not of the Palin variety, despite the same Alaskan backdrop). Shell’s arguments for Arctic drilling have been pitiful, and can be summarised (and demolished) as follows.
1. “People have already drilled in the Arctic”. Well, yes, but much of the drilling thus far has been in vastly different conditions to those proposed by Shell. A helpful comparison might be to compare paddling in a kids’ swimming pool with deep sea diving in a rough ocean. Shell does have experience in the North but there is a big difference between the North and the Arctic. Almost all of Shell’s “Arctic” experience has been 1,000 km further south than their planned wells in the Chukchi and Beaufort Seas. Sea ice conditions – which constitute one of the biggest risks to Arctic drilling projects – are very different and much less challenging in these waters. No one has successfully done what Shell is proposing to do on this scale in Alaska, and many scientists believe the harsh conditions in the region actually make it simply impossible to do it safely.
2. “It’s going to happen anyway, as the Russians will go ahead regardless” . It’s true that Russian oil and gas companies seem determined to push ever further north; though how technically and commercially viable many of these proposed projects will be is yet to be proven. Moreover, Russia hasn’t exactly been a beacon of excellence in its own exploration efforts. There have been a series of environmental calamities, and plenty of evidence of local populations literally having to wade through fields of spilt oil. Russia’s recklessness on environmental matters does not provide a moral or commercial argument for Shell, which should know better. Unlike Shell, Russia does not advertise its sustainability credentials either. Now Shell is exploring Arctic entry through the back door, with its new pals Gazprom and Mr Putin. Could a sustainability image get much worse other than hiring Gerard Depardieu as the face of it all?
3. “It’s better that we do it because that way it will be safely done”. This from a company that initially proposed an oil spill safety plan involving sending a small dachshund (yes, one) to have a sniff about in the event of a problem. It was “safety first” Shell that managed to ground one of its ageing drilling barges, the Kulluk, off the coast of Alaska (prompting questions over whether the vessel was being moved to a more tax efficient location in Washington State). Shell also managed to damage a containment dome during testing, and a fire broke out on its Noble Discoverer rig, leading to the discovery of 16 safety violations on board by the US Coast Guard. And despite repeated assurances that during the summer months, Shell would not encounter any big ice, drilling in the Chukchi Sea was abandoned almost immediately because of a major ice floe appearing, bringing the madness to a temporary halt. I don’t want these people anywhere NEAR the Arctic’s people or wildlife, thanks.
4) We need this oil. Yes, in the way that an alcoholic needs an extremely large vodka, and then another. If we pursue “new” sources of fossil fuels that will only come on stream in 10-20 years’ time and are very expensive to extract, we assume everything that is available now, and cheaply, will be burnt. So we’re betting on an unsafe world in climate terms. The only economic argument that makes Shell’s Arctic lunacy commercially viable is a world unviable in terms of climate change and its impacts. The International Energy Agency says we need to leave two-thirds of fossil fuels in the ground to have a shot at avoiding catastrophic climate change, but if Shell then hedges by saying “but not me, not now, not here”, then our generation has invested in a fatal future infrastructure in a bet against a safe climate. Many investors know this, even if Shell doesn’t. It is completely insane.
Shell has comprehensively failed to engage with stakeholders on this issue. Its emergency response plans and pre-emptive lawsuit against NGOs have all combined to make Shell the perfect poster child for activists. Again!
Of course we must accept that fossil fuels are not going to disappear overnight. We also have to understand that future energy demand will require a mix of solutions and technologies. But these undeniable facts do not mean we have to destroy the Arctic to provide that mix.
The only way forward now is probably a bold market signal by business customers that they do not want their companies fuelled by Shell’s recklessness. There are many progressive business leaders out there who might jump at the chance to differentiate.
So here’s an idea: “Arctic free fuel”. Bear with me
I have already heard a few people say “that’s impossible”. Oh yes, and so is dolphin safe tuna, deforestation free palm oil, child labour free cotton, pesticide free food, and BPA free baby gear. It’s just all too difficult because of supply chains and how these things are produced and traded. Except hang on – all those things already DO exist.
Indeed, some towns are now declaring that they will be “tar sands free” municipalities. Oxford, where I was lucky to be a student, has become the first “tar-free City” in Europe. Of course you can segregate fuel according to its source. If there’s a will, there’s a way. I well recall people saying you could never segregate palm oil; it was technically and commercially impossible. What they meant was they “would never” do it. Of course, they did in the end.
At present, there’s just no will when it comes to the Arctic. Which provides a huge opportunity for business leaders to lead.
I’d like to see a progressive businessman like Sir Richard Branson develop a narrative that runs broadly as follows. “I run an airline. I do what I can to explore alternative fuels and designs to minimise our impact. I take advice from the right people. But I accept we are dependent on fossil fuels and a major contributor to climate change. I’m also an explorer and a citizen and I’ve seen some of the Earth’s most beautiful and pristine places. The Arctic is one such place. I cannot and will not add to the planet’s fragility by running my business on the fruits of Arctic oil drilling. It’s a step too far, and I believe there are some parts of the natural world we must now leave ALONE. That’s why Virgin Atlantic will operate on ‘Arctic-free fuel’ for as long as I’m in charge.”
Think of the market signal that would send. Of course, it needs cross-sector collaborative and pre-competitive approaches – no one company can do this (or anything comparably meaningful) alone. And it isn’t just fuel, it’s about the use of Arctic resources for a range of materials, such as plastics, clothing and so on.
If a group of progressive CEOs, from airlines, consumer goods firms, clothing companies and packaging giants, were to send out this “Arctic-free” message, then the seemingly impossible would become a market imperative for energy companies. It’s been done in other sectors, many times over.
There is no perfect fossil fuel, and there will always be social and environmental issues around any oil extraction. But we can draw a line in the Arctic ice. We must do so without delay. The question for Shell is whether it could potentially be a beneficiary of such a trend, or the lonely laggard that failed to wake up to what its customer base was saying.
Shell portrays itself as a buzzing hub of innovation, exploring the frontiers of new energy sources in a fast changing world. In its stubborn refusal to abandon its Arctic misadventure, it confirms it is still, at its core, a fossil fuel hungry dinosaur. The question is whether Shell will finally see sense, and get out before it’s too late.
Brendan May is Founder of The Robertsbridge Group
Free the Arctic 30, and lock up fossil fuels
On Friday, peaceful activists from the Greenpeace ship Arctic Sunrise woke up in a freezing jail cell in Russia for trying to protect the Arctic and fight global warming. At the same time the UN panel on Climate Change released its latest report on the status of the world’s climate.
Both events can be summed up in one word. Grim.
The UN report contains hundreds of pages of evidence to justify the actions of the brave Arctic 30. They were acting in defense of a fragile Arctic and a warming world.
This study has gone further than its previous incarnations, and illustrates the crisis we’re facing with even more confidence than before: climate change is a huge problem, the fossil fuel industry is responsible, and the window of opportunity to avoid really dangerous consequences is closing rapidly.
For climate activists everywhere, this announcement is bittersweet. Certainly it adds even more weight to the reasons behind the actions of the Arctic 30 and infuses the debate with more urgency. Yet at the same time, despite the indisputable evidence, governments everywhere are failing to act, and now the Russian authorities are proving they will stop at nothing to defend the oil industry as it exploits climate change to drill for more of the oil that caused this crisis in the first place.
Following an illegal boarding and arrest of our ship Arctic Sunrise after a peaceful protest against dangerous oil drilling, the ship was towed to Murmansk. The ‘Arctic 30’ were interviewed and subsequently detained without charge. Greenpeace, along with millions around the world, is calling for their immediate release, and sees the recent climate report as a strong call for more people to stand up against the reckless oil industry.
Russian oil giant Gazprom is trying to silence the activists and anyone who would speak out against Arctic oil drilling. Along with other oil companies like Shell, Gazprom is afraid of international attention on the Arctic oil race. However, the truth is that the world needs more, not less, attention focused on lunacy of the global greed for more Arctic oil.
For the first time, this report quantifies how much CO2 the world can emit if we are to stay within so-called safe limits of two degrees global warming: no more than 1000 gigatons of CO2 can be emitted from today until the end of the century if we are to avoid catastrophic climate change. This requires that global emissions peak before 2020, and decline rapidly thereafter. At current emission levels, we will have emitted that within 20 to 30 years. And with current growth, the time is even shorter. This is challenging, but not yet impossible.
Companies like Gazprom and Shell are literally banking on climate change. They have business models in place that depend on the world remaining addicted to fossil fuels, and that rely on the notion that governments will continue to protect the oil industry instead of their people. But alternatives exist, and another world is possible.
Certain fossil fuels need to stay in the ground if we are to avoid catastrophic climate change. That is a simple, indisputable fact. Yet in spite of this undeniable truth, greedy oil companies like Gazprom and others are exploring for more oil and gas, even in extremely sensitive areas like the icy Arctic Ocean, which carries an even greater risk of oil spills and accidents.
Drilling in the Arctic Ocean is incredibly dangerous when there is no way to clean up an oil spill in ice. It’s like playing a game of Russian roulette with the sensitive Arctic environment.
The Arctic 30 know this. That is why these brave activists deserve our respect, gratitude and their freedom.
Truls Gulowsen is Head of Greenpeace Norway.
.Save the Arctic