Shell Faces Shareholder Backlash Over Arctic Drilling

R2uAVsWy_400x400
on

Shellโ€™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 theย 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 Arcticย 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 2ยฐC world in itsย forecasting.

Arctic Oilย Incompatible

According to a study by University College London, a profitable Arctic oil operation is incompatible with a 2ยฐC world. However, it was recently revealed that Shell has been using a 4ยฐC to 6ยฐC scenario to guide future business operations; this is at least twice the level of warming considered safe for the planet, as internationallyย agreed.

At Tuesdayโ€™s meeting held in The Hague, van Beurden dismissed the link between climate change and Arctic oil exploration asย โ€œillogicalโ€.

โ€œArctic oil is logical, but we wonโ€™t convince everyone,โ€ van Beurden said. โ€œArctic operations will always be unpalatable toย some.โ€

Shellโ€™s AGM follows last weekโ€™s protests in Seattle where hundreds of โ€˜kayaktivistsโ€™ paddled out to meet Shellโ€™s Polar Pioneer drilling rig after it made its way through Puget Sound to the Port of Seattle. From here, the rig will be deployed to its drilling grounds in the Chukchi Sea in Alaska thisย summer.

Ancestralย Waters

Travelling from Arctic Village, Alaska, to attend Shellโ€™s AGM, Faith Gemmill-Fredson โ€“ founder and executive director of the grassroots indigenous network REDOIL โ€“ told Shell board members: โ€œThe moral and financial burden of the irresponsible decision to drill in the Arctic is too risky toย consider.โ€

โ€œThe traditional ecological knowledge states that Arctic drilling is not safe,โ€ she added, โ€œit will devastate lives and theย climate.โ€

According to the US Department of the Interior, there is a 75 percent chance that a major oil spill will occur in theย Arctic.

On this point, Mae Hank, Inupiat from Point Hope, Alaska, said: โ€œWe cannot move from the land when that spill hits the Arctic. The Chukchi is ancestral waters and we want it to stayย so.โ€

Spillย Prevention

Shareholder activists also criticised Shellโ€™s claim that its equipment testing is โ€œfully representativeโ€ of Arctic conditions, despite not having tested its equipment in theย Arctic.

When pressed on the companyโ€™s spill-response plans, van Beurden admitted he was not familiar with the companyโ€™s spill prevention and responseย statistics.

Van Beurden emphasised that โ€œhuge opportunities come with huge obligations,โ€ arguing that he is confident that Shell can deal with an Arcticย spill.

Strandedย Assets

Many of Shellโ€™s ventures, including the Arctic and Canadaโ€™s tar sands, have courted controversy for being among the most exposed to the risk of becoming โ€œstrandedโ€ by climate action. In order to meet a 2ยฐC target, many of these assets would have to remain in the ground analysts haveย warned.

However, while van Beurden admitted this argument โ€œsounds quite convincingโ€, he concluded that it was a โ€œdangerous theoryโ€ which โ€œdoesnโ€™t acknowledgeย reality.โ€

He said: โ€œThat particular theory ignores the reality of our industryโ€ฆ It risks distracting from the realย issues.โ€

When asked about its membership to lobby groups that oppose climate change policies and carbon pricing, such as the American Legislative Exchange Council (ALEC), Shell said it had no plans to distance itself fromย them.

@kylamandel

Photo: Backbone Campaign viaย Flickr

R2uAVsWy_400x400
Kyla is a freelance writer and editor with work appearing in the New York Times, National Geographic, HuffPost, Mother Jones, and Outside. She is also a member of the Society for Environmental Journalists.

Related Posts

on

The new leader of the opposition has regularly criticised the UKโ€™s green ambitions.

The new leader of the opposition has regularly criticised the UKโ€™s green ambitions.
on

Lucy von Sturmer and Duncan Meisel are building communities of creatives dedicated to preventing the advertising and public relations industry from casting polluters as climate saviours.

Lucy von Sturmer and Duncan Meisel are building communities of creatives dedicated to preventing the advertising and public relations industry from casting polluters as climate saviours.
Opinion
on

It's time to come together to collectively work through the anxiety, grief and overwhelm so many of us are experiencing.

It's time to come together to collectively work through the anxiety, grief and overwhelm so many of us are experiencing.
on

UCP pledges to abandon the provinceโ€™s net zero targets, and remove the designation of CO2 as a pollutant.

UCP pledges to abandon the provinceโ€™s net zero targets, and remove the designation of CO2 as a pollutant.