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How Shell Lobbied to Stop EU Renewable Energy Targets

This has been cross-posted from Energydesk.

A group of the EU’s largest energy companies – including oil and gas giants Shell and Norway’s Statoil – formed an alliance to lobby against a new EU renewable target according to documents seen by Energydesk.

The lobbying group may surprise few, but comes after it was revealed that Shell started lobbying the EU two years earlier for a policy which favoured gas over renewables, claiming “Gas is good for Europe”.

That claim, however, came before the Ukraine crisis raised concerns about gas supply in EU countries.

Shell To Proceed With Arctic Drilling Despite Damaged Icebreaker Ship Carrying Critical Emergency Gear Heading To Portland For Repairs

Shell officials are still hoping to launch exploratory drilling this month at the company’s Burger prospect, 70 miles off the coast of Alaska in the Chukchi Sea, even though a key ship in its fleet was forced back to port before it had even left the harbor last week after a 3-foot-long gash was discovered in its hull.

The company has to send the MSV Fennica to Portland because Terminal 5 at the port of Seattle, where Shell’s two drilling rigs were stored before they departed for Alaska, is a cargo terminal that doesn’t allow heavy repairs.

It is expected to take several weeks to repair the Fennica, according to FuelFix. The trip to Portland alone will take more than a week, and the Fennica appears to still be in Unalaska in the Aleutian Islands right now. But Shell has already begun moving its fleet into place in the Chukchi Sea, and does not plan on waiting for the Fennica to return before commencing drilling activities.

Revealed: UK Government Lobbied Big Oil to be Green Gas Leaders – Shell, BP ‘Not So Keen’

Big Oil made headlines has announced plans to become Big Gas. Speaking at the industry-sponsored World Gas Conference in Paris, companies including Shell, Total, BG Group, BP, and Chevron all stressed “the vital role of natural gas” in helping tackle climate change, write Kyla Mandel and Brendan Montague.

However, as documents obtained by DeSmog UK in a Freedom of Information (FOI) request reveal, Shell and BP failed to join the Climate and Clean Air Coalition (CCAC) Oil & Gas Methane Partnership – a UN-backed initiative to manage industry methane emissions – following lobbying by the UK Government for them to join as founding companies.

According to a 12 June 2014 briefing document drafted for then climate change minister Gregory Barker, ahead of a meeting with Shell executives, the government argued: “This Partnership provides industry with a good platform to demonstrate that gas is part of the low carbon solution, and to demonstrate their leadership to investors and consumers.”

Shell Faces Shareholder Backlash Over Arctic Drilling

ShellNo by Brendan DeMelle

Shell’s chief executive Ben van Beurden was grilled at the oil company's annual general meeting (AGM) today on its controversial plans to drill in the Arctic.

Pressure came from environmental activists, indigenous leaders and key institutional investors, including APG Asset Management and Dutch asset management firm Robeco, who all questioned the high risk, high cost of Arctic drilling.

Climate change remained a prominent theme throughout the five-hour meeting, culminating with shareholders voting nearly 99 percent in favour of a resolution that will force Shell to consider the possibility of a 2°C world in its forecasting.

Tar Sands Trade: Kuwait Buys Stake in Alberta As It Opens Own Heavy Oil Spigot

Chevron made waves in the business world when it announced its October 6 sale of 30-percent of its holdings in the Alberta-based Duvernay Shale basin to Kuwait Foreign Petroleum Exploration Company (KUFPEC) for $1.5 billion.

It marked the first North American purchase for the Kuwaiti state-owned oil company and yields KUFPEC 330,000 acres of Duvernay shale gas. Company CEO and the country's Crown Prince, Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, called it an “anchor project” that could spawn Kuwait's expansion into North America at-large. 

Kuwait's investment in the Duvernay, at face-value buying into Canada's hydraulic fracturing (“fracking”) revolution, was actually also an all-in bet on Alberta's tar sands. As explained in an October 7 article in Platts, the Duvernay serves as a key feedstock for condensate, a petroleum product made from gas used to dilute tar sands, allowing the product to move through pipelines. 

And while Kuwait — the small Gulf state sandwiched between Iraq and Saudi Arabia — has made a wager on Alberta's shale and tar sands, Big Oil may also soon make a big bet on Kuwait's homegrown tar sands resources.

“Kuwait has invited Britain’s BP, France’s Total, Royal Dutch Shell, ExxonMobil and Chevron, to bid for a so-called enhanced technical service agreement for the northern Ratqa heavy oilfield,” explained an October 2 article in Reuters. “It is the first time KOC will develop such a big heavy oil reservoir and the plan is to produce 60,000 bpd from Ratqa, which lies close to the Iraqi border [in northern Kuwait]…and then ramp it up to 120,000 bpd by 2025.”

In the past, Kuwait has said it hopes to learn how to extract tar sands from Alberta's petroleum engineers.

Obama Opened Floodgates for Offshore Fracking in Recent Gulf of Mexico Lease

In little-noticed news arising out of a recent Gulf of Mexico offshore oil and gas lease held by the U.S. Department of Interior's Bureau of Ocean Energy Management, the floodgates have opened for Gulf offshore hydraulic fracturing (“fracking”).

With 21.6 million acres auctioned off by the Obama Administration and 433,822 acres receiving bids, some press accounts have declared BP America — of 2010 Gulf of Mexico offshore oil spill infamy — a big winner of the auction. If true, fracking and the oil and gas services companies who perform it like Halliburton, Baker Hughes and Schlumberger came in a close second.

Gulf of Mexico Oil Lease Map August 2014
Map Credit: U.S. Bureau of Ocean Energy Management

On the day of the sale held at the Superdome in New Orleans, Louisiana, an Associated Press article explained that many of the purchased blocks sit in the Lower Tertiary basin, coined the “final frontier of oil exploration in the Gulf of Mexico” by industry analysts.

“The Lower Tertiary is an ancient layer of the earth's crust made of dense rock,” explained APTo access the mineral resources trapped within it, hydraulic fracturing activity is projected to grow in the western Gulf of Mexico by more than 10 percent this year, according to Houston-based oilfield services company Baker Hughes Inc., which operates about a third of the world's offshore fracking rigs.”

Shale Rush Hits Argentina as Oil Majors Spend Billions on Fracking in Andes Region

While many countries, including France, Germany and South Africa, have banned or delayed their embrace of fracking, one country is taking a full-steam-ahead approach to the unconventional drilling technology: Argentina.

The country is welcoming foreign shale companies with open arms in the hope that oil and gas drilling will help combat one of the world’s highest currency inflation rates. But the government there is also facing violent clashes over fracking in arid regions of the Andes mountains and allegations from locals of water contamination and health problems.

Argentina’s Vaca Muerta shale formation — estimated to hold an amount of oil and gas nearly equal to the reserves of the world’s largest oil company, Exxon Mobil — has already attracted billions in investment from the major oil and gas company Chevron.

In April, the government drew global attention when it announced plans to auction off more acreage. “Chevron, Exxon, Shell have shown interest in Vaca Muerta. They will compete for sure,” Neuquen province Energy Minister Guillermo Coco told potential investors on a road show in Houston on April 30th.

Argentina, which the EIA estimates could hold even more shale gas than the U.S., already has over 150 shale wells in production, more than any country in the world aside from the U.S. and China. California-based Chevron, in partnership with Argentina’s state-owned oil company YPF, invested $1.24 billion in a pilot program last year. Last month, Chevron announced an additional $1.6 billion effort for 2014, part of Chevron's overall investment plan that could top $15 billion. The company is hoping that this plan will allow it to extract 50,000 barrels a day of shale oil plus 100 million cubic feet of shale gas per day from the country’s Andes mountain region.

American drillers have talked up Argentine shale as the next big thing. “Vaca Muerta is going to be an elephant compared to Eagle Ford,” Mark Papa, CEO of EOG Resources told the Argentine press in 2012, referring to a major oil-producing shale formation in Texas.

Very Little Cheap Natural Gas in New York Marcellus Shale, New Report Concludes

For years, the shale industry has touted the economic benefits it can provide. An overflowing supply of domestic natural gas will help keep heating and electric bills low for American consumers, they argue, while drilling jobs and astounding royalty windfalls for landowners will reinvigorate local economies. These tantalizing promises have caught the attention of politicians in Washington, D.C. who argue that the rewards of relying on shale gas outweigh the risks, especially because harm can be minimized by the industry or by regulators.

But across the U.S., communities where drilling has taken place have found that the process brings along higher costs than advertised. Even when properly done, drilling carries with it major impacts — including air pollution, truck traffic, and plunging property values — and when drillers make mistakes, water contamination has left residents without drinking water or cleaning up from disastrous well blow-outs.

And as the shale drilling boom moves into its 12th year, the most crucial benefit claimed by drillers — cheap and abundant domestic fuel supplies — has come increasingly into question. The gas is there, no doubt, but most of it costs more to get it out than the gas is worth.

A new report from New York state, where a de facto shale drilling moratorium has persisted since 2008, concludes that unless natural gas prices double, much of the shale gas in the state cannot be profitably accessed by oil and gas companies.

The Baffling Response to Arctic Climate Change

By David Suzuki

The Arctic may seem like a distant place, just as the most extreme consequences of our wasteful use of fossil fuels may appear to be in some distant future. Both are closer than most of us realize.
 
The Arctic is a focal point for some of the most profound impacts of climate change. One of the world’s top ice experts, Peter Wadhams of Cambridge University, calls the situation a “global disaster,” suggesting ice is disappearing faster than predicted and could be gone within as few as four years.
 
“The main cause is simply global warming: as the climate has warmed there has been less ice growth during the winter and more ice melt during the summer,” he told the U.K.’s Guardian.
 
Over the past 30 years, permanent Arctic sea ice has shrunk to half its previous area and thickness. As it diminishes, global warming accelerates. This is due to a number of factors, including release of the potent greenhouse gas methane trapped under nearby permafrost, and because ice reflects the sun’s energy whereas oceans absorb it.

Shell Abandons Fracking Plans For BC's Sacred Headwaters

Shell Canada announced that the company will immediately abandon plans to frack for natural gas in an area of British Columbia known as the Sacred Headwaters on Tahltan Nation traditional territory. The province of BC says it will issue a permanent moratorium on oil and gas tenures in the area.

A four-year moratorium, scheduled to expire today, began after Shell drilled three test wells in the area, igniting protest and blockades throughout the region and at Royal Dutch Shell headquarters in The Hague. In 2004, Shell was awarded a 400,000 hectare tenure in the Sacred Headwaters, the point of origin of the Skeena, the Nass and the Stikine rivers which are among the province's most important salmon-bearing waterways.

According to the Skeena Watershed Conservation Coalition, Shell's plans involved the construction of nearly 300 kilometers of road and over 4000 wells, as well as pipeline infrastructure and compressor stations. 
 
In a separate agreement, BC will award Shell $20-million in royalty credits, as compensation for the lost tenure. The funds will be redirected toward a water recycling project at Shell's gas drilling operations elsewhere in the province.
 
“Shell has backed away from a project only a handful of times. The powerful, relentless movement led by the courageous Tahltan and supported by nearly 100,000 people from around the world has not only stopped Shell, but persuaded the BC government to permanently protect the region from any further gas development,” said Karen Tam WuForestEthics Advocacy senior conservation campaigner. 
 
“It’s an inspiring day when communities in northern B.C. can stand up to one of the largest oil companies in the world and win. Congratulations to the Tahltan, and to the citizens and government of British Columbia.”

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