Shellโs 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 Tuesdayโs meeting held in The Hague, van Beurden dismissed the link between climate change and Arctic oil exploration asย โillogicalโ.
โArctic oil is logical, but we wonโt convince everyone,โ van Beurden said. โArctic operations will always be unpalatable toย some.โ
You have to see these pictures of #Seattleโs kayaking #climate protesters: http://t.co/AGsd0pEPUe via @grist #ShellNo pic.twitter.com/4qEPxOGgoI
โ DeSmogBlog (@DeSmogBlog) May 18, 2015
Shellโs AGM follows last weekโs protests in Seattle where hundreds of โkayaktivistsโ paddled out to meet Shellโs 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 Shellโs AGM, Faith Gemmill-Fredson โ founder and executive director of the grassroots indigenous network REDOIL โ told Shell board members: โThe moral and financial burden of the irresponsible decision to drill in the Arctic is too risky toย consider.โ
โThe traditional ecological knowledge states that Arctic drilling is not safe,โ she added, โit 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: โWe 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 Shellโs claim that its equipment testing is โfully representativeโ of Arctic conditions, despite not having tested its equipment in theย Arctic.
When pressed on the companyโs spill-response plans, van Beurden admitted he was not familiar with the companyโs spill prevention and responseย statistics.
CEO referenced containment as reason why Shell could clean up more but oil spill response plan is based on mechanical clean-up. #ShellAGM
โ Louise Rouse (@rouselouise) May 19, 2015
Appears that Shell mgmt doesn’t u/stand its own oil spill response plan but it’s confident it can deal with a spill! #shellagm
โ Louise Rouse (@rouselouise) May 19, 2015
Van Beurden emphasised that โhuge opportunities come with huge obligations,โ arguing that he is confident that Shell can deal with an Arcticย spill.
Strandedย Assets
Many of Shellโs ventures, including the Arctic and Canadaโs tar sands, have courted controversy for being among the most exposed to the risk of becoming โstrandedโ 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 โsounds quite convincingโ, he concluded that it was a โdangerous theoryโ which โdoesnโt acknowledgeย reality.โ
He said: โThat particular theory ignores the reality of our industryโฆ 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.
Photo: Backbone Campaign viaย Flickr
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