Posts under ‘The Independent’

Tom Bawden Tuesday 13 December 2011

Any serious oil spill in the ice of the Arctic, the “new frontier” for oil exploration, is likely to be an uncontrollable environmental disaster despoiling vast areas of the world’s most untouched ecosystem, one of the world’s leading polar scientists has told The Independent.

By Michael McCarthy, Environment Editor: Tuesday, 6 September 2011

Any serious oil spill in the ice of the Arctic, the “new frontier” for oil exploration, is likely to be an uncontrollable environmental disaster despoiling vast areas of the world’s most untouched ecosystem, one of the world’s leading polar scientists has told The Independent.

Oil from an undersea leak will not only be very hard to deal with in Arctic conditions, it will interact with the surface sea ice and become absorbed in it, and will be transported by it for as much as 1,000 miles across the ocean, according to Peter Wadhams, Professor of ocean physics at the University of Cambridge.

The interaction, discovered in large-scale experiments 30 years ago, means that the Arctic oil rush, which was given a huge boost last week with a $3.2 billion (£1.9bn) investment from Exxon Mobil, is likely to be the riskiest form of oil exploration ever undertaken, said Professor Wadhams, who is a former director of Cambridge’s Scott Polar Research Institute.

“If there is serious oil spill under ice in the Arctic it will be very hard, if not impossible to stop it becoming an environmental catastrophe,” he said. “It will be very much harder to deal with than a major spill in open water.”

The world’s oil companies are now turning to the Far North as supplies elsewhere across the globe start to run out or become harder to extract, and both the potential profits from Arctic oil, and the fears about the damage that extracting it may do, are enormous.

The area north of the Arctic Circle is thought to contain as much as 160 billion barrels of oil, more than a quarter of the world’s undiscovered reserves. Some of it is under land, as in Alaska’s North Slope field, but large amounts of it are known to lie under the seabeds of the Arctic Ocean and Baffin Bay off Greenland, which are ice-covered for all or part of the year, depending on the region.

It is this offshore oil which is now the focus of a new exploration rush, with Royal Dutch Shell and Exxon among the strongest contenders, focusing on the Arctic Ocean itself, while the first wells in the sea off Greenland are already being drilled by Edinburgh-based Cairn Energy.

However, many observers are seriously alarmed about the spill risks in the extreme conditions, especially in the wake of BP’s calamitous leak at the Deepwater Horizon platform in the Gulf of Mexico last year, which could not be controlled for three months, released as much as five million barrels of crude, and came close to wrecking the company.

“A spill in the Arctic would essentially make dealing with something like Deepwater Horizon look almost straightforward,” said Ben Ayliffe, polar campaigner for Greenpeace.

“There are problems with ice encroachment, the remoteness of the Arctic, darkness, extreme weather, deep water, high seas, freezing conditions and icebergs. Basically it would mean that responding to a Gulf of Mexico-style spill off somewhere like Greenland would be impossible.”

Yet Professor Wadhams, who was the first civilian scientist to travel under the Arctic ice in a submarine, in 1971, and who has made five more under-ice trips, is spotlighting an even greater level of concern with his knowledge of how oil and ice interact – with potentially calamitous consequences.

It stems from large-scale experiments he took part in off the coast of Canada in the 1970s, in which substantial quantities of oil were deliberately released into the frozen sea, to see how it behaved. “What we found, and one of the great difficulties, is that spilled oil becomes encapsulated in the ice and is then transported around the Arctic by it,” he said.

“The oil is caught underneath the ice, so you can’t get at immediately to clean it up or burn it off. You don’t know exactly where it is, and then it gets encapsulated in the new ice which grows underneath, so you then have a kind of oil sandwich inside the pack ice.

“And that’s being transported around the Arctic and isn’t released until spring, when it may be several hundred or even a thousand miles from the source of the spill, so you can have a huge area of the Arctic becoming polluted by oil without initially it being clear where that oil is.”

He added: “Once it is released in springtime, it’s very toxic, because the encapsulation in the ice preserves the oil from weathering, so that instead of the lighter fraction evaporating and the heavier fraction becoming just tar balls, you have fresh oil being released exactly where the ice is melting, usually round the edge of the pack ice where you’ve got a lot of migratory birds.

“Not great for the environment. In fact, I think the appropriate word would be ‘terrible’.”

Professor Wadhams is so concerned that he is helping to organise a high-level scientific workshop on the subject of oil spills in sea ice, in Italy later this month.

While companies such as Cairn Energy stress that they will be drilling exploratory wells only in the summer months, in areas of sea which are ice-free, it is likely that once oil production actually begins, it will be a year-round business and continue through the winter when production facilities are ice-bound. “We would need to produce all year round, in order to make the whole thing worthwhile,” a spokesman for Shell said at the weekend.

The oil companies insist that they are aware of the risks and have prepared detailed oil spill response plans, but Professor Wadhams, who has read several of them, said they did not amount to comprehensive plans for dealing with oil in ice.

The expert

* Professor Peter Wadhams, of Cambridge University, is an oceanographer and glaciologist and one of the world’s leading experts on polar ice. He is celebrated for submarine voyages beneath it.

His concern about how sea ice will interact with oil from a spill as the Arctic is opened up for drilling is so great that he has helped to convene an international high-level academic seminar to discuss Oil Spills in Sea Ice – and Future at Italy’s Polar Geographical Institute in Fermo, Italy, from 20-23 September.

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…amount leaked into the local environment could be as much as 10 million gallons.

…”one of the most devastating oil spills the world has ever seen…”

By Richard Hall: Thursday, 4 August 2011

Oil company Shell could be forced to pay hundreds of millions of dollars after accepting responsibility for two devastating oil spills in Nigeria’s Ogoniland region.

The agreement comes after the community in the Delta region of Nigeria brought a class-action lawsuit against Shell in the UK, alleging that spills in 2008 and 2009 had destroyed the environment and ruined their livelihoods.

Until now, Shell has claimed that less than 40,000 gallons were spilt in the accidents. But experts who have studied the spills in Bodo, Ogoniland, said the amount leaked into the local environment could be as much as 10 million gallons.

Locals claimed the spills devastated the Bodo community, which relies on fishing and is surrounded by water.

Martyn Day, the lawyer acting for the 69,000-strong Bodo community, called the disaster “one of the most devastating oil spills the world has ever seen”, and said the settlement could set a precedent for other communities in the Niger Delta to seek damages for oil spills.

“The Bodo people are a fishing community surrounded by water. What was the source of their livelihood now cannot sustain even the smallest of fish. The spills have caused severe poverty amongst the community.

“This is one of the most devastating oil spills the world has ever seen and yet it had gone almost unnoticed until we received instructions to bring about a claim against Shell in this country [the UK].”

Mr Day added that he would be seeking “adequate compensation immediately” for the community.

Royal Dutch Shell is the biggest international oil operator in Nigeria, accounting for roughly half the country’s exports of 2.5 million barrels daily.

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By Paul Bignall

Tuesday, 19 April 2011

Plans to exploit Iraq’s oil reserves were discussed by government ministers and the world’s largest oil companies the year before Britain took a leading role in invading Iraq, government documents show.

Iraq’s burgeoning oil industry: Click HERE to upload graphic (160k)

The papers, revealed here for the first time, raise new questions over Britain’s involvement in the war, which had divided Tony Blair’s cabinet and was voted through only after his claims that Saddam Hussein had weapons of mass destruction.

Reuters: A British Army soldier investigates a large fire near Basra’s Shuiba refinery

The minutes of a series of meetings between ministers and senior oil executives are at odds with the public denials of self-interest from oil companies and Western governments at the time.

The documents were not offered as evidence in the ongoing Chilcot Inquiry into the UK’s involvement in the Iraq war. In March 2003, just before Britain went to war, Shell denounced reports that it had held talks with Downing Street about Iraqi oil as “highly inaccurate”. BP denied that it had any “strategic interest” in Iraq, while Tony Blair described “the oil conspiracy theory” as “the most absurd”.

But documents from October and November the previous year paint a very different picture.

Five months before the March 2003 invasion, Baroness Symons, then the Trade Minister, told BP that the Government believed British energy firms should be given a share of Iraq’s enormous oil and gas reserves as a reward for Tony Blair’s military commitment to US plans for regime change.

The papers show that Lady Symons agreed to lobby the Bush administration on BP’s behalf because the oil giant feared it was being “locked out” of deals that Washington was quietly striking with US, French and Russian governments and their energy firms.

Minutes of a meeting with BP, Shell and BG (formerly British Gas) on 31 October 2002 read: “Baroness Symons agreed that it would be difficult to justify British companies losing out in Iraq in that way if the UK had itself been a conspicuous supporter of the US government throughout the crisis.”

The minister then promised to “report back to the companies before Christmas” on her lobbying efforts.

The Foreign Office invited BP in on 6 November 2002 to talk about opportunities in Iraq “post regime change”. Its minutes state: “Iraq is the big oil prospect. BP is desperate to get in there and anxious that political deals should not deny them the opportunity.”

After another meeting, this one in October 2002, the Foreign Office’s Middle East director at the time, Edward Chaplin, noted: “Shell and BP could not afford not to have a stake in [Iraq] for the sake of their long-term future… We were determined to get a fair slice of the action for UK companies in a post-Saddam Iraq.”

Whereas BP was insisting in public that it had “no strategic interest” in Iraq, in private it told the Foreign Office that Iraq was “more important than anything we’ve seen for a long time”.

BP was concerned that if Washington allowed TotalFinaElf’s existing contact with Saddam Hussein to stand after the invasion it would make the French conglomerate the world’s leading oil company. BP told the Government it was willing to take “big risks” to get a share of the Iraqi reserves, the second largest in the world.

Over 1,000 documents were obtained under Freedom of Information over five years by the oil campaigner Greg Muttitt. They reveal that at least five meetings were held between civil servants, ministers and BP and Shell in late 2002.

The 20-year contracts signed in the wake of the invasion were the largest in the history of the oil industry. They covered half of Iraq’s reserves – 60 billion barrels of oil, bought up by companies such as BP and CNPC (China National Petroleum Company), whose joint consortium alone stands to make £403m ($658m) profit per year from the Rumaila field in southern Iraq.

Last week, Iraq raised its oil output to the highest level for almost decade, 2.7 million barrels a day – seen as especially important at the moment given the regional volatility and loss of Libyan output. Many opponents of the war suspected that one of Washington’s main ambitions in invading Iraq was to secure a cheap and plentiful source of oil.

Mr Muttitt, whose book Fuel on Fire is published next week, said: “Before the war, the Government went to great lengths to insist it had no interest in Iraq’s oil. These documents provide the evidence that give the lie to those claims.

“We see that oil was in fact one of the Government’s most important strategic considerations, and it secretly colluded with oil companies to give them access to that huge prize.”

Lady Symons, 59, later took up an advisory post with a UK merchant bank that cashed in on post-war Iraq reconstruction contracts. Last month she severed links as an unpaid adviser to Libya’s National Economic Development Board after Colonel Gaddafi started firing on protesters. Last night, BP and Shell declined to comment.

Not about oil? what they said before the invasion

* Foreign Office memorandum, 13 November 2002, following meeting with BP: “Iraq is the big oil prospect. BP are desperate to get in there and anxious that political deals should not deny them the opportunity to compete. The long-term potential is enormous…”

* Tony Blair, 6 February 2003: “Let me just deal with the oil thing because… the oil conspiracy theory is honestly one of the most absurd when you analyse it. The fact is that, if the oil that Iraq has were our concern, I mean we could probably cut a deal with Saddam tomorrow in relation to the oil. It’s not the oil that is the issue, it is the weapons…”

* BP, 12 March 2003: “We have no strategic interest in Iraq. If whoever comes to power wants Western involvement post the war, if there is a war, all we have ever said is that it should be on a level playing field. We are certainly not pushing for involvement.”

* Lord Browne, the then-BP chief executive, 12 March 2003: “It is not in my or BP’s opinion, a war about oil. Iraq is an important producer, but it must decide what to do with its patrimony and oil.”

* Shell, 12 March 2003, said reports that it had discussed oil opportunities with Downing Street were ‘highly inaccurate’, adding: “We have neither sought nor attended meetings with officials in the UK Government on the subject of Iraq. The subject has only come up during conversations during normal meetings we attend from time to time with officials… We have never asked for ‘contracts’.”

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Tony Hayward faced a barrage of criticism when US politicians claimed that he stonewalled their questions last year

By David Usborne in New York Wednesday, 30 March 2011

Managers of BP could face manslaughter charges when prosecutors in the United States finally conclude their criminal investigation into the Deepwater Horizon explosion in the Gulf of Mexico last April that killed 11 rig workers and triggered the worst oil spill in US history.

The mere possibility that these and other charges may now be on the table at the US Justice Department, first reported last night by Bloomberg News, put new pressure on the shares of the energy giant.

The sources, who spoke on condition of anonymity, did not identify those managers at risk of individual charges. Involuntary manslaughter, if proven, could carry sentences of up to 10 years in prison. They also stressed that no decisions had been made and the criminal inquiry is still some way off being wrapped up.

Suggestions that prosecutors are also considering opening a perjury investigation implies that investigators are re-examining testimony given by BP executives, including that of former CEO, Tony Hayward, during congressional hearings. Some lawmakers suggested that Mr Hayward, who became a bogeyman in the US media and was replaced last summer by a US national, repeatedly stonewalled when faced with their questions. Any suggestion that he gave false testimony would be more serious, however.

After the spill, BP said it would take full responsibility and was ready to implement the environmental clean-up. Facing a barrage of criticism from the White House, the company also agreed to set up a $20bn fund to compensate Gulf Coast residents.

The US Justice Department said last June that it would open both civil and criminal investigations. BP is already budgeting for additional fines that the US government will levy on it when all the investigations are concluded. If the company is found guilty of gross negligence, which might be implied were manslaughter charges indeed to be filed, those fines could quadruple to as much as $21bn.

A decision to prosecute individuals within BP as well as the company itself would be an unusual step since it is normally the corporations themselves that are targeted. It would be seen as further evidence of the Obama administration’s determination to take the toughest line possible with the UK-based company and make an example of it in this case.

“They typically don’t prosecute employees of large corporations,” noted Jane Barrett, a law professor at the University of Maryland. “You’ve got to prosecute the individuals in order to maximise, and not lose, the deterrent effect.”

Shortly after the accident, the US Attorney General, Eric Holder, signalled he would encourage an aggressive approach. “We will closely examine the actions of those involved in the spill. If we find evidence of illegal behaviour, we will be extremely forceful in our response,” he said. Other US officials also said at the time that individuals could eventually be targeted for criminal charges.

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By Sarah Arnott

Wednesday, 16 March 2011

Peter Voser, the chief executive of Shell, saw his earnings rocket by 62 per cent to $7.3m (£4.5m) last year.

The increase reflected his first full year in the top job, but the majority of it came from bonus payments after the oil giant beat its targets for cash flow, project delivery and gas production and safety, Shell’s annual report said.

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Sunday, 13 March 2011

Oil giant Royal Dutch Shell will announce a strategic review on Tuesday.

The market will be looking for news on upcoming projects, cash flow targets and potential disposals. Analysts at Credit Suisse said that 2011 is a “transition year”, with a slew of mega-projects due to start in 2012. The City will also seek clarification over why capital expenditure has been higher than forecast. There are fears that this may signal high cost inflation in the sector.

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Anglo-Dutch conglomerate applies for permit to drill just 30 miles off World Heritage-listed coral reef in Western Australia

PHOTO ALAMY: The Ningaloo Reef, under threat from Shell’s plans to drill for oil nearby

By Kathy Marks

Wednesday, 9 March 2011

Shell Oil has come under heavy criticism for planning an oil and gas drilling site that could threaten a coral reef off the coast of Australia that is among the most valuable marine ecosystems on the planet.

Just 30 miles away from the marine park that protects Ningaloo Reef, a haven for sealife that was recently nominated for World Heritage status, the proposed drilling project has raised fears of an oil spill that could seriously damage the reef and the creatures that depend on it. Warnings of the risks come shortly after a major international report that three quarters of the world’s coral reefs are under severe threat of ecological catastrophe from overfishing, pollution, and climate change. Ningaloo is one of the minority that is currently relatively protected from such dangers.

The fears of an oil spill have not just been raised because memories of BP’s disaster in the Gulf of Mexico last year are fresh. North-western Australia experienced its own massive spill in the Montara oilfield in the Timor Sea in 2009, which took 74 days to plug.

If a blow-out that size occurred at Ningaloo, it could seriously damage the 175-mile reef and jeopardise the marine life that depends on it, WWF-Australia warned yesterday. The group pointed to Shell Australia’s own modelling, which envisages the worst-case scenario of an oil spill covering a substantial area just off the coast.

Shell itself insists that it has “a very strong commitment to the protection of biodiversity”. But environmentalists are not reassured. “It only takes one accident to create an environmental catastrophe,” said Robin Chapple, a state Greens politician in Western Australia.

Less well known than the Great Barrier Reef but equally spectacular, Ningaloo Reef is a haven for marine life, particularly the giant whale sharks that congregate there every autumn to feed. It is one of the longest fringing reefs on the planet.

One threat was fought off a decade ago, when plans for a major resort at Ningaloo were vetoed by the Western Australian government following a campaign backed by international celebrities.

Highly unusual because it hugs the coastline – at its nearest point, the reef is only 100 yards offshore – Ningaloo is home to 300 species of coral and 500 species of fish, including sharks, manta rays, dolphins and humpback whales. Four of the world’s seven marine turtles, all of them vulnerable or endangered, are found in its turquoise waters.

But the area, close to the small town of Exmouth, is best known for the whale sharks – the world’s biggest fish species, growing up to 18m (59ft) long – that gather from April to July, after a mass coral spawning. Eco-tourism operators offer visitors the chance to snorkel and dive with the enormous creatures.

In the early 2000s, plans to build a resort and marina were opposed by, among others, the actress Greta Scacchi and the British botanist David Bellamy, who called Ningaloo “one of the world’s most special places”. The Australian novelist Tim Winton, on winning Western Australia’s main literary award in 2002, donated his A$25,000 prize money (equivalent to £8,850 then) to the campaign.

The following year, the state premier, Geoff Gallop, rejected the development proposal, saying it would jeopardise “one of the world’s great natural wonders” and declaring: “Today we have drawn a line in the sand.”

Nominated for World Heritage listing last year, Ningaloo is tipped to receive the nod from Unesco soon. In their submission, the state and federal governments describe it as “a unique place… unsurpassed among coral reefs for displaying the interaction of history, physical environment and ecology”.

Nevertheless, the two governments, which would receive millions of dollars in royalties if oil and gas were found, are expected to approve Shell’s proposal to spend 60 days drilling in mile-deep waters, possibly as early as September.

In a statement, Shell said it applied “a very high standard of operating practices” and adhered to “strict environmental plans in all our operations”. However, WWF-Australia said the Gulf of Mexico spill demonstrated that “drilling accidents can happen to even the biggest companies in the business” – particularly when carrying out deep-water drilling.

The group’s conservation manager for Western Australia, Paul Gamblin, said only luck had prevented the Montara slick from reaching the pristine Kimberley coastline, more than 150 miles away. Ningaloo, he said, was one of the world’s few remaining healthy reefs. “It’s one of those places that is just humming with life and is quite amazing, so the fact that the oil and gas industry is getting closer and closer all the time is of great concern,” he said. “This could be the beginning of a whole new push into areas that run right along the reef itself.”

BP recently announced plans to carry out seismic exploration, with a view to deepwater drilling, in the Great Australian Bight, off the South Australian coast: another site exceptionally rich in marine life. Mr Gamblin said exploration should not be approved in such sensitive areas until a network of marine parks had been established, which was one of the government’s election promises.

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