At the end of February 2013, Shell suspended its Arctic oil drilling operation for 2013 citing safety concerns. Over the course of 2012, the company’s claims that they were ‘Arctic Ready’ collapsed after a succession of calamities, while investors and other oil companies started getting cold feet. Shell’s announcement pre-empted the results of a review and potential criminal investigation by the US Department of the Interior.
This episode of Climate Radio looks at how the British government has so far rejected a parliamentary call for a moratorium on Arctic drilling, how Shell's Arctic drilling plans pose a risk to your pension and what you can do about it.
Joan Walley MP (Chair Environmental Audit Committee), Charlie Kronick (Greenpeace UK), Louise Rouse (Fair Pensions) and James Marriott (Platform) join Phil England.
Listen to the podcast here.
Issues discussed in this episode include:
Arctic drilling and ‘dangerous’ climate change: There is enough carbon in known fossil fuel reserves already to fry the planet, yet the British government is attempting to show that Arctic drilling could be compatible with avoiding dangerous climate change (See point 5 of PDF). The highly rigorous Carbon Budget study, suggests that we can only release 20 per cent of the carbon that is already contained in fossil fuel companies reserves if we want to give ourselves an 80 per cent chance of staying below 2C and that’s before we add in new resources from the Arctic which are currently classified as ‘undiscovered’.
Calls for a moratorium grow stronger: In September 2012, when the British parliament's Environmental Audit Select Committee recommended a moratorium on Arctic drilling and establishing a sanctuary in the Arctic, it was adding its voice to a growing global demand.
In 2012 573 scientists, 60 members of Congress and 400,000 sent letters to the White House demanding a halt to offshore drilling. As of March 2013, nearly three million people have signed Greenpeace’s petition.
In August 2012, indigenous representatives issued a Joint Satement Of Indigenous Solidarity For Arctic Protection which was subsequently endorsed by the Alaska Inter-Tribal Council.
Oil companies and finance get cold feet: Throughout 2012 both oil companies and the financial sector became increasingly chilly towards the idea of Arctic drilling due to both cost and safety concerns. BP suspended its Arctic Liberty project, Total’s chief executive warned against Arctic drilling and Statoil said it was postponing its Arctic drilling plans. Investment Bankers Credit Agricole CIB introduced a policy which prohibits the funding of new offshore drilling projects. German bank West LB said it would not be funding Arctic drilling while insurers Lloyds of London described Arctic drilling ‘a unique and hard to manage risk.’
Is Your Pension at Risk? The risk of an oil spill in the Arctic poses significant risks to investors in Shell and the company is generally one of the largest holdings in every British pension fund. As Fair Pensions note, BP’s Deepwater Horizon spill showed how a single incident could have a sever impact on the financial performance of a company.
Listen to the podcast here.