Ignoring Calls for Moratorium, Shell Seeks to Drill in Arctic Seas This Summer
Shell yesterday pushed ahead with plans to drill in the Arctic Sea this summer, defying calls for a moratorium on offshore exploration in the pristine wilderness following the Gulf of Mexico disaster.
California's governor, Arnold Schwarzenegger, this month scrapped plans to allow offshore drilling in the state for the first time in more than 40 years and environmentalists have called for a halt in the Arctic after President Obama opened up the area to drilling for the first time last month.
However, Shell today refiled its drilling programme with the US authorities after being required to review its safety procedures following the Gulf spill and awaits final permits.
The industry will drill the first-ever large wells in the Chukchi and Beaufort seas in the Arctic, which are estimated to hold 27bn barrels of oil and gas.
Shell chief executive Peter Voser told shareholders at the company's annual meeting that it would only drill there if it thought it could be done "safely and responsibly".
"The characteristics of the offshore fields are different to those in the Gulf of Mexico – we go less deep so there is less pressure," he said. "The world needs these fossil resources in the longer term." Voser said Shell had spent $2bn (£1.38bn) to secure the permits.
Shell also managed to beat off a sizeable rebellion over its controversial oil sands operations in Canada. Nevertheless, one in 10 shareholders either voted for or abstained on a resolution calling for Shell to carry out a full public audit of the environmental and financial impact of the operations.
The Shell board, which was criticised for placing the resolution at the end of the six-hour meeting's agenda, had urged shareholders to vote against it.
Oil sands projects result in three times as many carbon emissions as conventional oil production and also require vast amounts of water to process. They are also very expensive, requiring oil prices of at least $70 a barrel to be economic.
The coalition of investors who had tabled the special resolution, led by investment charity FairPensions and Co-operative Asset Management, say that oil sands are not financially viable as environmental regulations will grow, adding to production and possible clean-up costs. They also argue that high oil prices are not sustainable because they will encourage the world to use alternative forms of energy instead.
After the resolution was tabled, Shell responded by publishing a report in March pulling together information already in the public domain about the operations, which will almost double production in several years.
Proceedings were marginally enlivened when one environmental investor who was asking a question broke out in song: "A world running for profit takes us to the edge, stop now think ahead."