WASHINGTON — The Obama administration’s fight against climate change is undermined by Shell’s quest for new oil reserves in the Arctic Ocean, environmentalists warn in a report Thursday.
The ongoing Arctic drilling is “inconsistent” with efforts to stay within a global carbon budget by limiting fossil fuel use and restraining greenhouse gas emissions to keep global warming to less than 2 degrees Celsius, according to the assessment.
“If we are serious about tackling the global climate crisis, we need to stop exploring, expanding and ultimately exploiting fossil fuels,” says the report from Greenpeace and Oil Change International, which promotes a transition to alternative energy sources. “Projects that expand or break open new reserves and generate more greenhouse gas emissions clearly fail a test of what is safe for the global climate.”
President Barack Obama has already said he will consider the climate change implications of Keystone XL in deciding whether to permit the proposed TransCanada Corp. pipeline that would help ferry Canadian oil sands crude to U.S. refineries. With their 20-page analysis, Greenpeace and Oil Change International argue that same climate test should be applied to other fossil fuel projects.
Under that scrutiny, Arctic drilling should be off the table, the groups say.
“There is no reasonable scenario in which Arctic oil drilling and a safe climate future co-exist,” said report author and Oil Change International senior campaigner Hannah McKinnon.
Arctic drilling advocates argue the activity is needed to supply the world with oil decades from now.
Ann Pickard, Shell’s executive vice president for the Arctic, has stressed that “multiple sources of energy” will be needed to satisfy rising demand for energy between now and 2050.
“It’s not good enough to step back and rely on today’s production from places like the Gulf of Mexico,” she told an audience of industry officials in Houston in May. “We need to plan for decades down the road, and that’s where the Arctic comes into play.”
But even the underlying energy demand models are flawed, Greenpeace and Oil Change International say, arguing that the U.S. Energy Information Administration’s long-term outlook depicts a scenario that would boost temperatures by at least 5 degrees celsius.
Obama’s crusade against climate change underpins an Environmental Protection Agency rule released last week that slashes carbon dioxide emissions from the power sector. The administration also is eyeing ways to curb methane emissions from the oil and gas sector as it prepares for global climate negotiations in Paris this December.
Obama himself is set to visit Alaska later this month for a summit to address how climate change is affecting the Arctic.
Arctic drilling foes increasingly are taking their case to shareholders, highlighting the economic risks of oil company investments in potentially stranded assets that could become unusable in a carbon-constrained world. The new Greenpeace and Oil Change International report spotlights mounting public opposition to frontier oil projects, too, suggesting that public accountability risks also should be a major concern for shareholders.
Shell is about two weeks into drilling an exploratory oil well at its Burger prospect about 70 miles northwest of Alaska.
Although a government-approved drilling permit limits Shell’s work to the top 3,000 feet of its well, the company has asked federal regulators to modify that authorization and let it penetrate deeper into potential oil- and gas-bearing rock, because key emergency equipment is now at the site.
The Interior Department’s Bureau of Safety and Environmental Enforcement is now considering the permit modification request.
Royal Dutch Shell CEO Ben van Beurden told reporters in a July 30 earnings call that the Burger prospect “is huge,” but, if developed, would not deliver oil production before 2030.