Royal Dutch Shell

Climate Change

When it withdrew from the Global Climate Coalition in 1998 Shell wished to be seen as one of the pioneer corporations, taking climate change seriously. Even before it withdrew from the GCC, Shell had been attempting to cultivate this image. Shell has ambitious plans to increase extraction by 5 per-cent each year. Analysts predicted that Shell could scale back its growth target to 3 per-cent, the company refused to be drawn on a figure for longer-term production growth.

In 2000, Shell, together with Siemens began developing a pilot gas-fired power station in Norway, which will capture its Carbon Dioxide (CO2) emissions and pump the gas underground. There are both technical and ethical questions over the use of this unproven technology in combating climate change. CO2 injection will be used for what is known as "enhanced oil recovery" gas will be injected to increase the pressure of declining fields. In accepting the reality of climate change, Shell announced in 1989 that the company was going to increase the height of its giant "Troll" platform by 1 meter, to counter predicted rise in sea-level. The platform can be raised further if it becomes necessary over the proposed 70 year lifespan of the rig.

West of Shetland

Environmental campaigners have long opposed the opening of the so-called Atlantic-Margin or Atlantic-Frontier to oil exploration. Opposition was on the grounds of climate-change but also because this area of deep ocean, west of Shetland and further, beyond Rockall had previously been largely free of commercial activity. Most of Shell UK's production comes from the North Sea: Gas fields are mainly in the southern sector and oil comes from the more northerly fields, including the large Brent field. Companies which operate in the North Sea are aware that these areas are probably already past their peak and that production is likely to decline over the coming decades. Because no tax is payable on oil and gas from UK waters, the UK is a operating environment favored by companies, so these corporations have been looking for new reserves in the UK to replace declining North Sea production.

In November 1997 Shell was a partner with operator BP in the Foinaven field, 190km west of Shetland, the first Atlantic Margin field to come on-stream. But on the 6th of December 2000 Shell announced that it had completed an asset swap agreement under which it would part with its 28 per-cent interest in the BP-operated Foinaven field, plus its interests in discoveries and prospects in areas adjacent to Foinaven. In exchange Shell would acquire an interest in Sakhalin Energy Investment of Russia.

Renewable Energy

Shell is a partner in the Blyth offshore wind project in Northumberland. Industry analysts see this investment favorably, since unlike BPs investment in solar Shell already has expertise in off-shore operations which it can transfer to its renewables division. Measurable reductions in local environmental pollution at Shell facilities have been achieved relatively easily and have been good for public relations, but this disguises the fact that in the early 1990s Shell was regularly breaching its pollution consent limits (35 times in 1991) and as such had, in the UK at least, a statutory duty to improve environmental performance. It also ignores the reality that to reduce local pollution whilst simultaneously seeking new oil and gas is to fudge the pollution issue.

Oil Leak and Drilling Muds

Shell was less proficient in reducing local pollution in August 1989 when 150 tons of thick Venezuelan crude leaked from a Shell pipeline, into the River Mersey (UK). The spill caused a 20 mile slick and killed at least 300 sea birds, putting another 2000 at risk due to oil ingestion. The nearby New Brighton mussel beds were also contaminated. The incident was made worse because Shell, against the warnings of local police and councilors flushed the pipeline with lighter crude and water, in order to stop oil from solidifying and blocking the pipe.

The National Rivers Authority was not informed of the spill by Shell but by the local fire Brigade, two and a half hours after the event. If they had been notified earlier, the flushing attempts would have been prevented. The official Department of Energy report concluded that the pipe was badly corroded and that the monitoring equipment was so inadequate that it could not detect problems. Shell was fined one million pounds at Liverpool Crown Court, with costs of 6573 pounds - the largest ever fine in the UK for a pollution incident. After several further spills and leakages, and amidst mounting criticism of the refinery, the General Manager of the plant, Bob Brawn told employees, "If I was running this plant in the United States or in Canada I would be in jail by now".

Contamination also emanates from exploration and production. For example, in April 1989, there was a 50000 gallon leak of toxic drilling muds from Shell's North Cormorant oil field in the North Sea.

Better Britain Campaign

The now well established Shell Better Britain campaign (SBBC) is an attempt by Shell to win public support by funding "Communities in efforts to improve their local environment in a sustainable manner, from organic growing to cycle taxis".

However, the scheme has split environmental groups over the ethics of accepting such money, particularly since the scheme has been so successful in earning Shell the image of a good corporate citizen. For example, the judge who, in 1990 fined Royal Dutch/Shell Group one million pounds over an oil leak into the river Mersey (UK) the previous year (see above), commented that the fine would have been substantially higher if Shell had not had such a good record in conservation, the arts and other worthwhile causes.

As long ago as 1991, then campaigns director of Friends of the Earth: Andrew Lees criticized the Shell Better Britain campaign as being an example of corporations buying a green image rather than actually earning one. In 1989, Shell defeated a decision by Kent County Council (UK) to stop the company drilling in a classified Area of Outstanding Natural Beauty, and in 1990 the company decided to build a pipeline construction facility on Morrich More, a grade one Site of Special Scientific Interest and an EC (European Community) Protected Area, and the only breeding site in the UK of the whimbrel, a rare wading bird. In 1992, Shell began drilling 21 miles off the Sunderland coast, north east England. The area is close to 21 sites of special scientific interest (SSSI) and to Flamborough Head, a well known nesting site. Shell's contribution to Britain is distinctly mixed.