Boston Common is one of more than 140 institutional investors supporting a shareowner resolution asking Shell to report on the strategic risks of Canadian oil sands investments in the face of “future carbon prices, oil price volatility, demand for oil, anticipated regulation of greenhouse gas emissions and legal and reputational risks arising from local environmental damage and impairment of traditional livelihoods.”

Co-op backs oil sands awareness campaign

By Ed Crooks, Energy Editor

Published: March 15 2010 22:32

The Co-op is backing Dirty Oil, a new documentary that had its premiere in London on Monday night.

The film alleges pollution from oil sands production is contributing to high rates of cancer among local communities; a claim that is rejected by the industry.

The Co-op has put £100,000 towards marketing and distribution of the documentary in Britain. Its asset management arm is part of a campaign against oil sands investment by Royal Dutch Shell and BP.

FULL FT ARTICLE

BP PLC’s $7 billion deal with Devon Energy Corp should help dispel some of the misgivings that have weighed on the British oil major’s stock in recent years—particularly doubts about its ability to keep pumping more and more oil.

THE WALL STREET JOURNAL

By Phil Craig
Of FINANCIAL NEWS

UK politicians today backed a shareholder revolt against oil giants BP and Shell, giving a substantial boost to demands that the companies assess the risks associated with their controversial investments in Canada’s tar sands.

A cross-party group of MPs has today published an Early Day Motion, a means by which politicians can raise an issue in parliament, calling on the parliamentary pension fund to vote in favour of shareholder resolutions requiring the oil giants to report on their tar sands projects.

Liberal Democrat MP Simon Hughes, the shadow secretary of state for energy and climate change, said: “Tar sands are a very risky investment ??? financially, environmentally and socially. The resolutions ask BP and Shell to report to their investors on how they are managing these risks.

“Government should lead by example and be a responsible investor; for this reason it is essential that the MPs’ pension fund supports these resolutions.”

Tar sands, also known as oil sands, have attracted substantial attention from campaign groups. Canada’s tar sands are one of the largest proven sources of oil in the world after Saudi Arabia’s reserves, but converting tar sands into a usable form of oil produces many more greenhouse gases than extracting oil by other means.

So far six MPs have backed the motion ??? the maximum allowed before a motion is tabled. They include members of the Labour, Conservative and Liberal Democrat parties. Other MPs are now free to back the proposal.

The involvement of the parliamentary pension scheme would add substantial weight to the revolt, which is organised by FairPensions, a campaigning organisation focused on encouraging ethical investment practices. A spokesman for FairPensions said that some sovereign wealth funds are also interested in supporting the resolutions, but declined to name which funds are considering the proposals.

The coalition already includes the Co-operative Asset Management, the Unison Staff Pension Scheme, Rathbone Greenbank, CCLA Asset Management and other fund managers, foundations and faith groups that declined to be identified.

BP and Shell have confirmed that the resolutions are valid, and will be discussed at their annual general meetings, in April and May respectively.

A spokesman for BP said that the company is in discussions with shareholders about the issue. Shell declined to comment for this article.

Web site: www.efinancialnews.com

WSJ SOURCE ARTICLE

Daily Telegraph

Last updated: March 11th, 2010

An area near Fort McMurray, Alberta, Canada, where oil sands are believed to lie

The group of investors vociferously trying to persuade BP and Shell to re-evaluate their potential investments in the Canada tar sands has now enlisted a group of MPs in Britain to propose an early day motion questioning the project’s financial viability.

The move is part of a pretty well-coordinated campaign mobilised by FairPensions (members: ActionAid, WWF and a number of trade unions). This year, the rebels have managed to get enough shareholder support to submit motions to the oil companies’ annual meetings against the Alberta prospects, which environmentalists argue will be responsible for high levels of carbon dioxide emissions.

Shareholders obviously have a perfect right to kick up a fuss about investments they’re not keen on. Around 25pc of the FTSE-100’s dividends are paid out each year by BP and Shell, so the importance of these two companies’ decisions to UK pensions cannot be under-estimated.

However, it does seem slightly disingenuous that FairPensions is trying to claim that a big reason for their concern is the economics of the projects. They question the margins that will be made by the oil companies and warn of possible high legal fees from environmental challenges, plus the rising costs of climate change legislation.

But if they were so concerned about the right economic decisions being made by companies like BP, they would be having a look at its portfolio of renewables and “other” unit, which made a stonking $2.3bn loss in 2009. Yet there seems to be no issue with wind, solar and biofuels: all eco-friendly, low-carbon projects that are undertaken to improve the company’s green image and prepare for a future of heavier regulation of emissions/higher financial penalties, rather than turn an immediate profit.

What’s more, if you look at an investment like BP’s Project Sunrise, it represents a low proportion of the company’s overall capital expenditure. It is currently planning to spend $1.25bn on the venture over the next few years out of a total $20bn yearly budget on exploration and new projects. If given the go-ahead, BP’s oil sands will only be pumping out 60,000 barrels out of 4m barrels per day by 2014 – around 1.5pc of overall output.

I’m not taking sides on the environmental controversy of this debate. BP claims the extra carbon dioxide emissions of Project Sunrise – from well to wheel – will only be an additional 5-15pc. The campaigners put this figure at a much higher 12-40pc.

It’s just that all the talk about the oil sands’ profitability seems to obscure this real purpose of this argument – do the tar sands pose an unacceptable environmental risk and how much do we care about it? Obviously the economics of the project are borderline unless oil stays in the $80-100 per barrel range, confirmed by the fact that Shell’s Peter Voser has decided to slow the pace of investment at the moment to concentrate on conventional reserves.

But it is highly unlikely that BP and Shell would have been examining these prospects if there were not a probability that they could make some money and they will be subject to the same financial feasibility tests as every other investment – there would be little point in them wasting all this time and money just to spite the environmentalists. And I somehow doubt that the campaigners would be putting all this effort into an anti-tar sand campaign if the projects were the cleanest form of crude extraction in the world.

SOURCE ARTICLE

REUTERS

By Poornima Gupta

SANTA BARBARA, Calif., March 4 (Reuters) – Royal Dutch Shell Plc (RDSa.L) expects electricity-powered vehicles to account for as much as 40 percent of the worldwide car market by 2050, Chief Executive Peter Voser said on Thursday.

Voser, speaking at The Wall Street Journal’s ECO:nomics conference in Santa Barbara, said technological improvements and increases in the cost of producing gasoline will give a boost to vehicles that run on alternative power.

“We think between now and 2050, we will go from 1 billion cars to 2 billion cars worldwide,” he said. “We think by 2050, roughly 40 percent of those 2 billion cars will be electric.”

In the next 40 years, the market needs low-carbon fuels, more efficient engines and hybrid vehicles, Voser said.

“I think there will be room and space to develop all of them,” he added.

Gasoline demand in developed countries like the United States has started to decline, partly as vehicles running on alternative fuels have entered the market. Companies such as Shell and BP (BP.L) are spending more money on those newer technologies, including for next-generation biofuels.

Automakers such as Ford Motor Co (F.N) and Nissan Motor Co Ltd (7201.T) are racing to launch electric cars, betting these will be the environmentally friendly transportation of the future. Small players like Tesla Motors already sell electric vehicles.

Voser said Shell was investing 25 percent of its research and development budget into renewables, including wind power and biofuels.

Shell has bet big on ethanol by striking a deal with Brazil’s Cosan (CSAN3.SA) to create a $21 billion a year ethanol joint venture.

The 50-50 joint venture, with almost 4,500 filling stations nationwide, will better position Cosan and Shell to compete with the two top players in the market, state oil giant Petrobras (PETR4.SA) and Ipiranga, a unit of Brazil’s Grupo Ultra (UGPA4.SA).

(Reporting by Poornima Gupta. Editing by Robert MacMillan)

REUTERS ARTICLE

Lobbyists bid to turn RBS, BP and Shell annual meetings into green referendums

Tar sands are shaping up to be the thorn in BP (BP-) and Shell’s (RDSB) sides as concerns over potential expense prove almost as rife as worries over the environmental impact.

REUTERS

Shell oil sands costs rise again, partner says

* Athabasca oil sands expansion’s costs rise to $14.3 bln

CALGARY, Alberta, Feb 25 (Reuters) – The cost of a 100,000-barrel-per-day expansion of Royal Dutch Shell Plc’s (RDSa.L) Athabasca oil sands project has climbed to $14.3 billion, Chevron Corp (CVX.N), one of its partners, said in a filing.

The new estimate amounts to $600 million more than the estimate provided by Chevron a year earlier.

Chevron, which hold a 20 percent stake in the oil sands mining and upgrading project, said the expansion will boost output to 255,000 barrels per day.

The cost of completing the project has steadily climbed well beyond Shell 2006 estimate of between C$10 billion and C$12.8 billion ($9.4 billion to $12 billion). Just a year ago, Chevron pegged the cost of the project at $13.7 billion.

A spokesman for Shell declined to confirm Chevron’s estimate.

Over the years, cost overruns have been widespread for the massive projects needed to tap the oil sands, the largest crude reserves outside the Middle East.

However, rival producers in the region said costs have fallen during the past year, mostly because of reduced labor costs. As most projects were rejigged, delayed or canceled because of the financial crisis, the squeeze on a limited pool of skilled labor has eased.

Chevron’s filing did not say why it had boosted its cost estimate for the project.

Shell owns 60 percent of Athabasca, with Chevron and Marathon Oil Corp (MRO.N) each holding 20 percent. The project includes an oil sands mine near Fort McMurray, Alberta, and an upgrading refinery near Edmonton. ($1=$1.06 Canadian)

(Reporting by Scott Haggett)

REUTERS ARTICLE

CIVILSOCIETY.CO.UK

Vibeka Mair | 22 Feb 2010

Campaigning charities FairPensions and WWF have joined a coalition which is lobbying oil giants BP and Royal Dutch Shell over their investments in environmentally controversial oil sands developments.

The coalition, which also includes Unison, Greenpeace and the Co-operative banking group, is asking pension scheme members to email their fund managers to push them to support shareholder resolutions against oil sand projects that are due to be voted on at BP and Shell’s annual general meetings this spring.

It follows the coalition’s successful effort in encouraging over 200 shareholders in BP and Shell to bring the resolution on oil sand projects to the AGMs. Investors sponsoring the resolution included faith groups and charitable foundations, according to a spokesman.

Joseph Rowntree Charitable Trust, which as of 10 February had £967,457 invested in BP ordinary shares and £206,879 in Royal Dutch Shell ordinary shares, has sponsored the resolution and plans to vote for the resolution on tar sand deposits.

A Joseph Rowntree spokeswoman said: ”Like other responsible shareholders we are concerned, for a number of reasons, that these investments could become not only unprofitable but also stranded assets.  We are therefore asking the companies to keep us informed.”

The size of tar sand deposits, combined with unusually high greenhouse gas emissions, means that they threaten to be a major contributor to climate change.

Investors and industry analysts increasingly raise concerns about the long-term profitability of tar sands, specifically pointing to very high operating costs, expected carbon price rises, oil price volatility, expected fluctuations in demand, regulation of greenhouse gas emissions, and the legal and reputational risks arising from environmental damage and human rights cases.

The Joseph Rowntree Trust last week sold its £1.9m stake in FTSE100 mining company Vedanta because the company had refused to act on its concerns about human rights and environmental abuses.

SOURCE ARTICLE