Petrol & Diesel

Free buyers guide to Petrol & Diesel, from Ethical Consumer

Free buyers guide to Petrol & Diesel, from Ethical Consumer


This is a product guide from Ethical Consumer, the UK's leading alternative consumer organisation. Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.

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The report includes:

  • Ethical and environmental ratings for 7 oil companies
  • Best Buy recommendations
  • The oil industry's investment in renewable energy sources
  • carbon intensity of the companies' oil production
  • campaign for revenue transparency
  • tar sands involvement and protest campaign
  • complicity in human rights abuses
  • the search for new frontiers
  • company profiles

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Best Buys

as of Sept/Oct 2009


As our ratings and research are constantly updated, it is possible that brand ratings on the score table may have changed since this report was written or brands may no longer appear.


Murco comes out top of the score table, but is the smallest retailer by far. Next best scoring Jet is second smallest. Together they have fewer than one in ten of UK forecourts, meaning most drivers are between a rock and hard place when deciding where to fill up. We look at whether meaningful distinctions can be made between the oil majors in the article.

When we last rated oil companies in 2007 we suggested that investment in renewable energy might be a way to differentiate the best of a bad bunch, and BP came out top. BP is still there, but with its recent decision to invest in the Alberta tar sands, the most environmentally destructive project on earth, we're loath to recommend it. However a quick look through the company profiles at the end of the article will provide pause for thought on why you might want to boycott the rest.


Petrol and Diesel 20 years on

Twenty years ago the first issue of Ethical Consumer magazine featured a buyer's guide to petrol. For our twentieth anniversary we revisit that very first report to ask what were the issues of the day, what's changed – and where are we going? Dan Welch, Leonie Nimmo and Tim Hunt report.

The month of publication of EC1, March 1989, was the month of the notorious Exxon Valdez oil spill, when 10m gallons of oil devastated the pristine Arctic environment of Prince William Sound. By May that year Ethical Consumer was urging readers to boycott UK brand Esso in support of the campaign launched in the US by six environmental and consumer groups. The campaign demands ran from paying for the aftermath to refraining from drilling in the Arctic National Wildlife Reserve, a controversy that continues to this day. But also, jarring to today’s environmental sentiment, was the demand to “roll back the recent gasoline price rises”. While concern was expressed in EC1 regarding a pricing conspiracy between the major oil companies – the ‘Seven Sisters’ – ‘climate change’ was neither a category on the table nor a term in the debate.

Where the ‘greenhouse effect’ did get a mention was in the context of the key issue of the day – unleaded petrol. The deadline for new cars made in the UK to be able to run on lead-free petrol was a year away. Modification to allow your car to run unleaded would cost between £5 and £15, we informed readers. For the 56% of UK cars already able to run on unleaded the issue was where to get the stuff. Ironically Exxon brand Mobil was by far the leader here with almost a fifth of its UK service stations providing unleaded, while BP, the biggest chain by far, had unleaded at only one in 50 of its forecourts. Despite some public statements to the contrary, readers were informed, lead was not the cause of the greenhouse effect.

Ethical Consumer was launched at a point where ‘global warming’ was just becoming a commonly recognised term in public discourse. On 23rd June 1988 climate scientist James Hansen’s testimony to the US Congress alerted the public that global warming was under way. In September of that year Margaret Thatcher gave a speech to the Royal Society. “It is possible,” she warned, “we have unwittingly begun a massive experiment with the system of the planet itself.” Curiously, in retrospect, Thatcher’s speech was a turning point in the popular consciousness of climate change. Following her intervention there was a sharp rise in broadsheet coverage of the issue, from a handful of articles annually, to hundreds in 1989.(1)

Commenting last year on the twentieth anniversary of his testimony to Congress, James Hansen noted:
“There are striking similarities between then and now, but one big difference. Again a wide gap has developed between what is understood about global warming by the relevant scientific communities and what is known by policy-makers and the public...The difference is that now we have used up all slack in the schedule for actions needed to defuse the global warming time bomb...Elements of a ‘perfect storm’, a global cataclysm, are assembled... Special interests have blocked transition to our renewable energy future. Instead of moving heavily into renewable energies, fossil companies choose to spread doubt about global warming... In my opinion, these CEOs should be tried for high crimes against humanity and nature.”(2)


Choosing a ‘better’ oil company?

This report does not set out to be an exhaustive analysis of the oil industry. Rather, its focus is those companies that are both producers of oil and retailers of petrol and diesel in the UK. About a fifth of the petrol stations in the UK are independents retailing fuel produced by the oil majors. We found that the supermarkets do not disclose their petrol suppliers as a matter of policy, so it’s impossible to know which company produced the petrol you are buying. So if there’s an informed choice to be made, it’s between the big ‘integrated’ oil companies. One consideration might be whether you’re buying from a wholly owned company forecourt or an independent dealer operating a franchise. All of Texaco and Jet petrol stations are run by independents, while the other brands are a mix of company-owned and independents.

When we last looked at petrol stations in 2007 (EC105) two policy criteria stood out as possible differentiators between the oil giants – investment in renewables and transparency over oil revenues.


Clean Energy – Dirty Energy

In our 2007 Petrol report there were three clear leaders in terms of investment in renewable energy, both in absolute terms and as a percentage of total investment – BP, Chevron and Shell (in that order). We noted then that the figures showed that moving to renewable energy was neither a serious nor an urgent priority for Big Oil. The trend since then has been disappointing. Shell has pulled out of any significant investments in wind or solar energy, having invested $1.7 in renewables between 2004-2008. Instead it intends to concentrate on the controversial areas of biofuels and carbon capture and storage.(22) Both of which suggest an interest in extending business as usual rather than the transformation of the energy system we so urgently need.

Only Chevron and BP have anything other than marginal investment in renewables. Exxon still resolutely refuses to have anything to do with clean energy, despite the almost subliminal appearance of wind turbines on recent European commercials.(28) Last year Exxon was banned by the Advertising Standards Authority from further airings of a UK TV ad that misleadingly implied natural gas was one of the cleanest sources of energy and that liquefied natural gas was environmentally friendly.(29)

Up-to-date figures for Chevron were unavailable at the time of writing. 2007 figures showed 2.8% of its total investment going into renewables. US subsidiary Chevron Energy Solutions provides energy efficiency services and renewables – including to US military bases.(26)
It’s a damning indictment of the sector that BP tops the league while allocating 93% ($20bn) of its total investment to fossil fuels. In contrast, solar power was allocated just 1.4% and wind 2.8% (the remainder to biofuels).(27)

At the same time, not every barrel of oil has the same carbon footprint. When a barrel of oil is produced, the amount of carbon emitted during its production varies significantly depending on how and where it’s produced. This is its ‘carbon intensity’. Producing oil from Canadian tar sands is up to ten times as carbon intensive as Saudi oil. Whatever their renewable investments, recent research(7) shows that the carbon intensity of both BP’s and Chevron’s oil output is increasing. BP’s recent decision to move into tar sand development will have had a significant impact.

But as the table below shows both are dwarfed by the huge increase in carbon intensity of Shell’s production due to its increasing reliance on tar sands and continued massive gas flaring.
Increase in carbon intensity from 2008 production to future production based on current resources (only the four biggest companies were assessed)(7)
Shell 85%
Chevron 36%
BP 19%
Exxon 10%


Transparency

The campaign for revenue transparency in the oil industry aims to combat the ‘resource curse’ – the tendency for poorly managed fossil fuel revenues to undermine human welfare and promote corruption and conflict. We take a look at some of the worst examples below.

The table below is taken from Transparency International’s 2008 Report on Revenue Transparency of Oil and Gas companies, based on a detailed questionnaire whose indicators reflect best practice and desirable standards of revenue transparency.

OVERALL COMPANY RESULTS
Group International oil companies operating outside home country
High Shell
Middle BP, Chevron, ConocoPhilips, Total
Low ExxonMobil

Note: Murphy Oil was not included in the study

The data was broken down into the three key areas – payments to host governments, operational information and anti-corruption programmes – allowing further differentiation. Shell was rated in the best category for anti-corruption programmes, as well as for payments, along with BP and Total. ExxonMobil appeared in the lowest category for anti-corruption programmes and for operations. Shell and Total also appeared in the lowest category for operations.

When performance was assessed against averages for transparency for individual countries ExxonMobil again scored poorly: in the 12 countries it operated it scored ‘very below average’ in two (the only one of the companies assessed here to appear in this category), and ‘below average’ in seven. Of the overall middle grouping, BP and ConocoPhilips fared better on a country-by-country basis than Chevron and Total.


How we rated the companies in 1989

Ethical Consumer’s first issue (EC1) informed readers that squares meant that “Independent commentators have raised questions about the involvement or malpractice of this company” – triangles indicated “a lesser degree”. It was not until EC77 in 2002 that, after an eight month root-and-branch review of the table categories the top, middle and bottom ratings familiar to readers were introduced. And in EC90, 2004, the ethiscore column was launched displaying figures calculated from the weighting of stories on our database.

In EC1 the categories were divided between those referring to explicit company policies – relating to South Africa, Oppressive Regimes, Nuclear Power, Armaments and Animals – and those other ‘contentious issues’ where EC researchers made a judgement. Originally all sources of criticism relating to the marks on the table were listed at the back of the magazine. As sources and stories proliferated this detail was moved to a dedicated Research Supplement. An early adopter of internet technology, EC was providing online access to our research database in 1994 – customers were warned “a modem (at least 2,400 bps) and a telephone line” were required. And in 2005 www.ethiscore.org was launched, which enabled users to customise the ethiscore scoring system to best fit with their own ethical priorities.

Then

Over the years there’s been a huge consolidation, both between the international oil companies and the UK retail brands, as a comparison between the tables shows.
The Petrol Table from EC1 illustrates the pressing issues of the day. Corporate involvement in apartheid South Africa was a key issue. The Anti-Apartheid Movement, which began life as the Boycott Movement, had been calling for a consumer boycott of South African goods since 1959 and economic sanctions against the apartheid regime had been an election issue in the UK since the ’60s. The Thatcher government opposed sanctions. And with Nelson Mandela still behind bars, in the year Ethical Consumer was launched the 23 year old David Cameron took ‘a jolly’ to South Africa organised and paid for by an anti-sanctions lobby group.(3) In 1993 with the first democratic election months away, Nelson Mandela called an end to the boycott and EC26 was happy to scrap the South Africa category.

Now

Of course, today oil companies are still up to their ears with involvement in oppressive regimes, which we now count under the general Human Rights category. Shell tops the bill for the sheer number of countries on our oppressive regimes list that it’s involved with – twenty. However, Chevron and Total deserve special condemnation for their involvement with Burma’s military regime. Total is one of the biggest foreign investors in Burma and is involved in a joint venture with the military regime developing an offshore gas field in the Andaman sea. Chevron is the only US company which still has significant assets in Burma and has funded a trade association which lobbied the US Congress against imposing sanctions on Burma.(4) Both are subject to boycott calls for their activities. Only Murphy Oil, due to the much smaller size of its operations compared to the other companies on the table, lacks significant involvement with oppressive regimes. Its human rights mark comes from involvement in the Canadian tar sands and the abuse of land rights of the indigenous peoples this involves and operations in Indonesia.

Then

The Irresponsible Marketing categories referred to the issues specific to the oil industry at the time. Column 1 related to the export of petrochemical pesticides to the ‘third world’ which had been banned or restricted in ‘the West’ for their high toxicity. Column 2 related to the marketing of fuel to the ‘third world’ with far higher lead content than that marketed in ‘the West’.

Now

By the turn of the century stories relating to oil companies involvement in pesticides had largely fallen away – not that the issue of pesticides had. In some cases this was due to restructuring: Total, for example, spun off its entire chemical manufacturing division (now Arkema Inc) in 2003. In 1995 a new kind of irresponsible marketing appeared on our database, in which the oil companies came to specialise – ‘greenwash’. In 2000 the term was invoked for BP’s much derided rebranding as ‘Beyond Petroleum’ – Greenpeace reported that BP had spent more on a new logo than on solar energy research.(5) In 2003 ExxonMobil was awarded a ‘Greenwash Award’ for its funding of climate change denial. By 2006 Corporate Watch was accusing BP of greenwashing over its carbon offsetting scheme, ‘Targetneutral’, which offered to help “drivers to help the environment”.(6) And last year BP was the winner of Greenpeace’s ‘Emerald Paintbrush’ award for the worst greenwash. The award was in recognition of the company’s efforts over the year to greenwash its brand through focusing on its marginal renewable energy investments – despite the increasing carbon intensity of its fossil fuel production.(7)


Stop the Tar Sands! campaign

In June 2009 Ethical Consumer launched its Stop the Tar Sands campaign, calling for a boycott of high street brands profiting from tar sands exploitation. The Canadian tar sands development is causing massive environmental destruction, impacting on the health and livelihoods of local aboriginal people, and threatens to tip the world into climate chaos.
For information on the boycott and letter writing campaign visit www.ethicalconsumer.org or call us on 0161 2262929 for a campaign information pack.


Tarred and feathered

When we last covered petrol in EC105, BP was the only major oil company not involved in the dirty business of the tar sands, having previously stated that it would not pursue development. But in December 2007 a new chief executive reversed its decision, citing the need to find new supplies to meet demand. At the time Greenpeace called the exploitation of the Alberta tar sands “the greatest climate crime in history”.(8) Today, whoever you buy your petrol or diesel from, they’re likely to be complicit in that crime. Tar sands exploitation demands massive investment to deliver the necessary infrastructure needed to extract and refine the bitumen from which the oil is made, and to transport the raw materials and finished products. Pipelines, roads and refineries form an integral part of the tar sands development. A substantial amount of refining takes place in the United States, involving transport over huge distances. This massive infrastructure investment has resulted in a number of unholy alliances in the form of joint ventures and partnerships in projects. We take a look at what the companies covered in this report have been up to in Alberta.

Who’s who in the greatest climate crime in history

The biggest tar sand facility is operated by Syncrude Canada Ltd, which holds leases on 102,000 hectares and produces around 450,000 barrels of oil a day. Six companies or partnerships own stakes in Syncrude; of the companies covered in this report: ExxonMobil owns about 17% through its majority shares in Imperial Oil; ConocoPhillips owns 9%; and Murphy Oil owns 5%. Imperial Oil boasts that it “pioneered development of the oil sands of Alberta, both through its leadership role in the creation of Syncrude and development of large-scale in-situ bitumen recovery at Cold Lake”.(9)

Syncrude came under fire when around 1,600 ducks died in 2008 after landing on one of the company’s toxic tailing ponds, the lake-sized pools where the waste product from oil sands extraction is pumped.(10) A year later, as court proceedings progressed, the company admitted the true figure, after initially claiming 500 had died.(11) The incident caused huge embarrassment, coming at the same time Alberta was embarking on a $25m PR campaign to greenwash the tar sands image. As we went to press Syncrude was considering a constitutional challenge to fight the environmental charges.

A late arrival at the tar sands, after its policy U-turn in 2007, BP quickly moved into a joint venture with Husky Energy. The two companies now own 50/50 stakes in the Sunrise oil project and the Toledo oil refinery. Husky Energy is owned by Hutchison Whampoa, which also owns the British high street store Superdrug. Consequently, Superdrug tops the Ethical Consumer’s Stop the Tar Sands boycott list.

BP also signed a deal with Enbridge Inc. in 2008 to pipe bitumen from Alberta to refineries on the Texas Gulf Coast. The two companies are set to spend $2 billion on expanding existing pipelines and building new connections, which are predicted to deliver up to 250,000 barrels a day to the USA’s southernmost state by 2012.
In January 2009 Greenpeace Canada reported that a blown valve at an Enbridge site in Alberta resulted in 4000 barrels of oil being spilt. The spill went undetected for a number of hours because, according to Enbridge, it was “too small a spill” to have been picked up by the company’s detection systems. The incident was reported anonymously to Greenpeace’s Alberta hotline.12

Shell has operations in all three major tar sands areas in Alberta and revealed to investors last year that 30% of its total resources are tar sands.7 It first started exploration in Athabasca in the 1940s, but determined investment began in 1999 with the development of the Athabascan Oil Sands Project (AOSP), which includes a 60% stake in a refinery. The company had sunk over $3.6 billion into AOSP by the time it started production in 2003. A second refinery in the same area could cost as much as $22 billion13– to put that in context that’s the same amount as the entire annual global aid budget for health in the developing world.14

Chevron, parent company to Texaco, owns a 20% stake in the AOSP. It also operates and owns a 60% stake in the Ells River Project, currently in the exploration stage.

Total has stakes in three Athabascan tar sands leases, and exploration leases in three additional sites. The company also plans to build a refinery and says it will invest $10 to $15 billion in Alberta over the next 10 years.


Human Rights and Big Oil– Snapshots of the Resource Curse

Wherever there’s oil, it seems, there’s conflict. It’s been called the ‘Resource Curse’. Instead of higher standards of human welfare, all too often oil wealth brings with it corruption and human rights abuses. But where there’s conflict there’s resistance, whether it’s in the Niger Delta, Ireland’s County Mayo or the jungles of Peru. And a growing international movement links local struggles to the global issues of abuse of corporate power. See ‘Links’ at the end of this article for some of the groups working in this area.

We provide a snapshot of some of the most striking examples of corporate complicity of Big Oil in human rights abuses.

Chad and Cameroon

According to a 2006 Amnesty International report, the ExxonMobil-led consortium developing the World Bank backed Chad-Cameroon oil pipeline is complicit in human rights violations and in creating a climate of intimidation, along with the governments of Chad and Cameroon.
Human rights groups warned that the project would end up strengthening the repressive Chadian regime. The inauguration of the pipeline prompted a national day of mourning by civil groups in Chad. Since then, villagers have been denied access to clean water, farmers have been denied access to their lands, and fish stocks off Cameroon’s coast have been destroyed.
More recently, in 2005, according to the International Confederation of Free Trade Unions, two former oil company employees were killed, three seriously injured, and 30 arrested by Chadian national police at a sit-in at an ExxonMobil facility, following a dispute over unpaid overtime wages.(22)
The World Bank’s controversial $1.2 billion funding for the pipeline obligated the government to devote the bulk of its oil revenues to road, health and education projects. However in September last year, citing the government’s non-compliance with the loan terms, the Bank scheme ended.(23)
Chad’s leader Idriss Deby has admitted he had used a fifth of the $25 million ‘bonus’ given to him by companies including ExxonMobil and Chevron to buy weapons.(24)

Burma

Chevron has a contract with Burma’s military junta to provide security for its operations along the Yadana pipeline. Human rights abuses have been reported since the construction phase of the Yadana project started. These include the use of forced labour, murder, rape, and the forced relocation of villages. According to ‘The True Cost of Chevron’ report (2009) pipeline security forces “routinely conscripted villagers for severe forced labour projects, including building infrastructure for the project ...as well as committing torture, rape, and murder.”20 The Yadana project is the the regime’s largest single source of revenue, said to make up to $450m a year for the military junta
Total is another partner in the project and is facing court cases in France and Belgium regarding horrific human rights abuses along the route of the pipeline. (21)

Nigeria

Shell has finally made an out-of-court settlement of $15.5million to the families of human rights campaigner Ken Saro-Wiwa and eight others, executed in 1995 for their part in leading opposition against the company’s activities in the Niger Delta. The move was widely seen as an attempt to keep revelations of Shell’s complicity with human rights abuses out of the public sphere. However, 15 years after Ken Saro-Wiwa’s death things have still not improved. Shell is still illegally flaring 256m cubic feet of natural gas a day,(15) according to Friends of the Earth the biggest contribution to climate change in sub-Saharan Africa. Shell has repeatedly broken its promises made since 1996 to stop flaring, refusing to implement the 2011 deadline imposed by the Nigerian government. Oil spills are still commonplace. According to independent oil and environmental experts they amount to one Exxon Valdez disaster a year over the last 50 years.(16) Amnesty International recently reported how in 2008 a ‘significant’ oil spill in Ogoniland was allowed to flow for weeks, affecting about 69,000 people. A local human rights worker reported that eight months after the spill Shell had offered by way of ‘relief’ a total of 50 bags of beans, rice, sugar, dry milk, tea, tomatoes and groundnut oil for the whole population. The food was rejected by local residents, they considered it “insulting, provocative and beggarly.” As of May 2009 no clean up operation had begun.(17)

Ecuador

An epic legal battle for $27 billion environmental reparations against Chevron for pollution dubbed by experts the ‘Amazon Chernobyl’ may finally be settled this year.(18)
According to campaign group Chevrontoxico, “in three decades of oil drilling in the Ecuadorian Amazon, Chevron have dumped more than 18 billion gallons of toxic waste water into the rainforest, leaving local people suffering a wave of cancers, miscarriages and birth defects.”(19)
Chevron fought for nine years to transfer the trial, originally filed in 1993 in the US federal court, to Ecuador. Once the trial in Ecuador started in 2003 and the evidence pointed to Chevron’s culpability, the company launched a lobbying campaign to discredit Ecuador’s courts. It’s also tried – and failed – three times to use trade policy to pressure Ecuador’s government over the lawsuit, calling on the US government to cancel trade benefits that would cost 350,000 Ecuadorian jobs. A final decision in the case, brought on behalf of 30,000 Amazonians, is expected later this year.(18)


New Frontiers of the Carbon Web

In 1978, before the Iranian revolution, the big Western oil companies controlled 70% of global reserves. Today that figure is less than 10%.39 In a world of depleting oil reserves the industry is looking to new frontiers. Mika Minio-Paluello of campaign group PLATFORM takes a look at the new provinces of the Carbon Web.
T he past 20 years have seen heavy depletion of oil producing areas close to home, such as the North Sea and Gulf of Mexico. Coupled with the pressure for constant growth, this has created a renewed drive by the oil giants to open up frontier provinces. BP, Shell and the other oil majors are now pushing hard to open up new and old regions including the Arctic, deep offshore Brazil and Central Asia. Until recently some of these areas have been off limits for political reasons (such as Iraqi oil) while others have been beyond existing technological capabilities or economic rationale (such as the tar sands in Canada).

Breaking through these social, political, economic and technological boundaries is difficult, even for multinational corporations bringing in billions of dollars of profit. BP and Shell don’t work alone but in close collaboration with a web of companies and institutions including banks, universities, states, law firms and contractors. Actors within this ‘Carbon Web’ provide finance, lobbying, legal protection, political pressure, and technical expertise.

Diplomats in the Caspian

State institutions including the Foreign & Commonwealth Office, Department for Business Innovation & Skills (formerly DTI) and the European Commission work closely with the oil companies to apply pressure to access fossil fuel reserves in new or ‘unstable’ countries, through diplomatic meetings, aid agreements and treaties.

With the collapse of the Soviet Union the possibility of the oil giants directly exploiting the vast reserves beneath the Caspian Sea opened up – both in terms of direct ownership and new pipeline routes. During the 1990s the EU and US saw the Caspian as a way to reduce their dependence on Middle East oil. BP’s 1994 contract for the 6 billion barrel ACG field in Azerbaijan was only the beginning. However, the obvious pipelines for Caspian oil would run through Iran, Russia or China – less than politically appealing to the Western powers.

The option preferred by the US – a 1600km pipeline through Azerbaijan, Georgia and Turkey – was widely regarded as uneconomic. BP argued they would only build it if it was paid for with “free public money”. Years of pressure involving high level diplomatic meetings, Donald Rumsfeld dropping in, and intimate relations between the British Embassy in Azerbaijan and BP (at one point based in the same office) led to the Baku-Tiblisi-Ceyhan oil pipeline becoming a reality. It now pumps close to one million barrels a day – equivalent to 160 million tonnes of carbon dioxide. The recent Russian-Georgian conflict underscores the geo-political stakes at play.

The role of government ministries in breaking BP and Shell even further into the Caspian continues. The EU and the UK Foreign Office are currently pushing hard for the proposed Nabucco pipeline, to run from Turkey to Austria and Central Europe. Ministries are pressing Caspian countries like Turkmenistan and Azerbaijan to commit their gas reserves to the pipeline. Turkmenistan, until recently a frontier closed off to Western investment, continues to be run by a very oppressive dictatorship. The need for European ‘energy security’ is being used to justify corporate involvement with, and support for, the Turkmenistan regime.

Banks in the Arctic

Opening up new areas means longer pipelines, deeper wells and dealing with difficult weather conditions – which require more cash. Budgets for major projects like Shell’s Sakhalin II require oil companies to turn to banks, who compete to provide credit. The Royal Bank of Scotland stands out as positioning itself as the bank to lend to risky oil projects. Since RBS was bailed out in 2008 it’s been using public money to fund companies such as Scottish Cairn Energy to exploit ecologically sensitive regions like Arctic Greenland.

According to the company’s Exploration Director Greenland is, “a true frontier country where oil and gas exploration is at an embryonic stage”. Cairn has licences covering an area half the size of England. Earlier this year, RBS and Merrill Lynch placed shares worth £116 million for Cairn Energy, making clear that the money raised would go towards “accelerated drilling” in Greenland. In March, six months after the initial bailout, RBS was reportedly involved in financing loans to coal, oil and gas companies worth nearly £10bn – over a quarter the amount the bank had received from taxpayers at that point.

While pressuring oil companies themselves can be difficult, their reliance on actors within the Carbon Web provides social movements with a means of leverage. For example, this summer PLATFORM, together with the World Development Movement and People & Planet, launched a legal challenge against the Treasury for failing to include environmental or human rights considerations in the investment framework of banks like RBS that are now playing with public money.
The Treasury is determined to run the recapitalised banks on an ‘arms length’ basis and says that any kind of political interference would jeopardise maximising the return of public investment. PLATFORM and our campaign partners believe the public good is better served by refusing to bankroll climate trashing projects with public money and instead financing the transition to a low carbon economy.

Pension funds in the Canadian tar sands

While banks provide the loans for projects, it is institutional shareholders like insurance companies and pension funds that provide the long-term capital. As the ultimate owners of BP and Shell, institutional investors demand continual growth. This requires constant replenishment of oil reserves by opening up new oil fields in previously untouched areas.

Shell’s dwindling oil reserves and its decreasing access to oil in countries such as Russia, Venezuela and Iran led the company to commit itself heavily to Canadian tar sands. The company sees its future as intertwined with the fate of the Albertan oil province, with around 30% of its entire reserves in tar sands.

The tar sands are portrayed as massive open-cast mines that are leading to the deforestation of vast tracts of Alberta’s forests, the destruction of the homeland and livelihoods of Canada’s First Nations, and a key driver in climate change – pushing us towards a tipping point. The tar sands are all these things – but they also take place right at the centre of our own society, woven into the financial fabric of our daily lives. The tar sands are not only being extracted in Alberta, Canada, but also in the Square Mile of the City of London. As Shell shares represents about 9% of the London Stock Exchange, and around a sixth of all the money invested by UK pension funds, the future of the UK’s financial sector and the retirement security of millions is also intertwined with the Albertan tar sands.

The major shareholders that provide the bulk of capital to the oil giants are pushing BP and Shell deeper into tar sands in pursuit of new reserves, but have the ability to turn this around. These institutional investors like Prudential, Aviva and West Yorkshire County Council Pension Fund provide pensions, insurance policies, mortgages and council services – they’re susceptible to demands to end their role in driving tar sand development.

Lobbyists in Iraq

Some zones have been politically out of bounds for western oil companies. The massive reserves of the Middle East have been largely beyond the reach of BP and Shell since the nationalisations of the 60s and 70s. Iraq has the third largest conventional oil reserves in the world. The 2003 invasion created the opportunity to access those reserves again.To further strengthen their hand, the oil companies brought in lobby group International Tax & Investment Center (ITIC), to make their demands to the Iraqi government. In private documents, the ITIC argued that Iraq could provide a potential ‘beachhead,’ on the way to achieving significant corporate control over oil reserves in the Arab world.

ITIC, the UK and US governments and the oil majors pushed heavily for the introduction of Production Sharing Agreements (PSAs) in Iraq – long-term contracts that would take control over production away from the Iraqi government while guaranteeing long-term high levels of profit. PSAs are widely considered inappropriate for countries like Iraq with large, cheap reserves. PSAs looked inevitable, however, until a major public campaign in Iraq and the UK uncovered ITIC’s lobbying role and made PSAs politically unlikely.

However, the dramatic fall in oil prices in late 2008 undermined Iraq’s negotiating position, as the government was forced to slash its budget. BP and Shell were fast to take advantage of the shifting situation, demanding much more profitable terms. A licensing round in early July 2009 saw BP snap up co-production at Rumaila – one of Iraq’s super giant fields. The other oil companies continue to hold out for more control. While PSAs are not yet back on the table formally, lobbyists are working hard and the Iraqi government has indicated that it might concede to the pressure.

 

Without the Carbon Web of organisations and institutions to support them, BP and Shell would be unable to break into new frontier provinces including the Arctic, the tar sands and Iraq. These other actors provide a social licence to operate, create a ‘safe political environment,’ offer financial services and technical expertise – all of which help boost oil company profits at the expense of the climate, social justice and untouched environments.

The oil giants think in terms of decades. Once a new pipeline has been built or oil field has been brought into production, it will run for 20-40 years. Avoiding runaway climate change requires a strong defence of the remaining frontiers. Social movements need to stop BP, Shell and Exxon opening up the Arctic, tar sands and other frontier provinces by pulling away elements of the Carbon Web, leaving the the oil corporations powerless and a real change in our energy future possible.


Company Profiles

BP plc is one of the companies operating in the Sakhalin II project, which threatens the survival of the last remaining Western Grey Whales. A recent report from the World Conservation Panel estimates only 130 remain and that the total number of whales occupying the near-shore area had declined by nearly 40% compared to 2007. The gravity of the situation was such that the report authors called for a moratorium on all industrial activities which might be expected to disturb the whales in their main feeding areas during the summer and autumn feeding season.(33)
In 2007 the US Department of Justice fined BP £182m for breaking environmental and safety rules and committing fraud. The fines included £50m relating to a Texas refinery explosion in 2005 that killed 15 people and injured 180 more. (34)
The company has subsidiaries in four countries considered to be tax havens: Ireland, Luxembourg, Philippines and Singapore.(35)

ConocoPhillips spent around $6m lobbying the US Congress in the year to July 2009, the third highest of companies reviewed in this report.(31) On 17 June 2009 The American Clean Energy and Security Act, addressing climate change emissions, was passed. The Act occasioned intense lobbying from the US oil industry. The company’s human rights mark comes from: involvement in eight countries considered oppressive regimes; involvement in the Alberta tar sands (a human rights issue due to abuse of the land rights of the indigenous population and concerns over the health impacts); and plans to explore for oil in three ‘highly controversial concessions’ in remote areas of the Amazon in Ecuador and Peru. The concessions were described as being ‘carved out of the traditional territories of four indigenous nations’.(30)

Chevron Corporation spent $9.8m on lobbying the US Congress in 2008, and over $6.8m in the year to July 2009, second highest of the companies in this report.(31) The company is subject to a boycott call from online campaign group Avaaz.org for its involvement in Burma. The company received a middle rating for environmental reporting.

ExxonMobil Long the focus of boycott campaigns from Exxon Valdez onwards. Ethical Consumer’s Boycott Bush campaign, focused on the US administration’s refusal to engage in climate talks and listed Exxon as one of the top 20 donors to the Republican Party. The ExxposExxon.com campaign’s website calls for a boycott due to “funding front groups that confuse the science on global warming and delay action; refusing to invest in clean, renewable energy that doesn’t pollute our air and water and will bring down consumer costs of energy; denying the urgency of global warming and lobbying against action; still a member of Arctic Power, the single-issue lobby group trying to, open the Arctic National Wildlife Refuge.”
Despite claiming to have stopped funding climate change denial groups in 2008 it gave $125,000 to two groups which published misleading and inaccurate information about about climate change.(32) According to the environmental lawyer Robert Kennedy, “America is a decade late in addressing the serious threat from global warming largely due to ExxonMobil’s campaign of deliberate deception. ExxonMobil’s conduct amounts to a war on civilization.”
It spent the most of any company in the US oil and gas sector on political lobbying in the first quarter of 2009, paying $9.3m. In 2008 the company spent $29 million, its highest figure ever, on lobbying.(31) The company’s profit for 2007 came to $4.6 million an hour.

Murphy Oil With a turnover of $1.9bn Murphy Oil is an order of magnitude smaller than the other companies rated – we might compare BP’s £252bn sales in 2008 or Exxon record breaking profit of $40.6 billion in 2007. Its human rights mark comes from operations in Indonesia, considered an oppressive regime, and its involvement in the Alberta tar sands.

Royal Dutch Shell Essential Action, founded in 1982 by Ralph Nader, called for a boycott of Shell over its activities in the Niger Delta. Shell is also involved in the Sakhalin II project and has faced damaging claims over its influence on a supposedly independent environmental audit to determine whether the Sakhalin II project would receive vital bank funding. Doug Norlen, policy director of US-based Pacific Environment, said: ‘’Shell stage-managed the whole process. They set the agenda, scheduled meetings and even participated in the editing of sections. I believe this to be a stark and vivid example of manipulation.” (37)

Total SA faces a boycott call from online campaign group Avaaz.org for its involvement in Burma. Total is a participant in the Yadana Gas Pipeline Project, which represents the single largest foreign investment in Burma. Companies involved have contracted the Burmese army to provide security-forced labour, forced relocation of villages, extra judicial killings, rape and extortion by the pipeline security forces increased dramatically since the project was initiated.(38)


Links

Online actions

No fuel for Burmese junta – pledge to boycott Total and Chevron
Stop Shell gas flaring in Nigeria
Send Chevron a message for justice in Ecuador
It’s Time to Exxpose Exxon

Campaign groups

Oil Change International campaigns to expose the true costs of oil and facilitate the coming transition towards clean energy. www.priceofoil.org 001-202-518-9029
Oilwatch is a resistance network that opposes the activities of oil companies in tropical countries www.oilwatch.org (Nigeria) 00 234 84 236365
Shell to Sea – a campaign against the building of a high pressure pipeline in Rossport, County Mayo, Ireland www.corribsos.com Spokesperson – Maura Harrington 087 9591474
The True Cost of Chevron – An Alternative Annual Report http://truecostofchevron.com/
How Exxon funds the climate change skeptics www.exxonsecrets.org
Sakhalin Environment Watch www.sakhalin.environment.ru/en/
PLATFORM works for social and ecological justice www.platformlondon.org
Art Not Oil For creativity, climate justice and an end to oil industry sponsorship of the arts www.artnotoil.org.uk 07709 545116
For links to tar sands campaigns see www.ethicalconsumer.org/Oilsandsboycott.aspx

Peak oil and alternatives to oil dependency

Association for the Study of Peak Oil
Feasta – Foundation for the Economics of Sustainbility
Post Carbon Institute - Assists societies in their efforts to relocalize communities and adapt to an energy constrained world. www.postcarbon.org 001 707 823 8700
Transition Towns Network (UK) 05601 531882
The Oil Drum – Discussions about Energy and our Future, see also http://europe.theoildrum.com/
Oil Depletion Analysis Centre – UK educational charity working to promote understanding of the world’s oil-depletion problem.

References

1 Carvalho, A. and Burgess, J. ‘Cultural Circuits of Climate Change in U.K. Broadsheet Newspapers, 1985–2003’ Risk Analysis, Vol. 25, No. 6, 2005
2 Guardian, 23/06/08 “Twenty years later: tipping points near on global warming”
3 Independent 26/04/09 “Cameron’s freebie to apartheid South Africa”
4 www.burmacampaign.org.uk viewed 13/07/09
5 Greenpeace UK, Autumn 2000, ‘Connect’
6 Corporate Watch magazine, 2006 (10th Anniversary Issue)
7 Oil Change International et al. “Irresponsible Energy” May 2009
8 Guardian 07/12/07 “Greenpeace calls BP’s oil sands plan an environmental crime”
9 www.imperialoil.ca/Canada-English/ThisIs/Profile/TI_P_CorporateProfile.asp
10 http://news.therecord.com/article/551746
11 www.nationalpost.com/news/story.html?id=482931
12 www.greenpeace.org/canada/en/recent/oil-leak-at-enbridge-tank-farm
13 www.greenpeace.org.uk/files/pdfs/climate/RisingRisks.pdf
14 “Funding for Global Health Quadruples, to $22 Billion” http://blogs.wsj.com
15 www.guardian.co.uk/environment/blog/2009/may/12/shell-gas-flaring
16 www.guardian.co.uk/commentisfree/libertycentral/2009/jun/30/shell-oil-niger-delta
17 “Petroleum, Pollution and Poverty in Niger Delta” Amnesty International 2009
18 Amazon Defense Coalition Press release 1/07/2009 http://chevrontoxico.com
19 http://chevrontoxico.com
20 “The True Cost of Chevron: An Alternative Annual Report” http://truecostofchevron.com 2009
21 The Ecologist April 2005
22 www.yesmagazine.org/article.asp?ID=1340
23 www.hrw.org/en/world-report/2009/chad
24 www.newint.org/issue335/hotspots.htm
25 Ends Report 410, March 2009
26 www.chevronenergy.com viewed 12/07/09
27 Greenpeace Business March 09
28 www.media.exxonmobil.com/media/microsite
29 www.asa.org.uk 3/09/08
30 Rainforest Action Network 25/04/06
31 www.opensecrets.org 04/07/09
32 Guardian 01/07/09
33 International Fund for Animal Welfare 11/06/09
34 Hazards 101 Jan 2008
35 www.bp.com viewed 11/07/09
36 www.essentialaction.org viewed 13/07/09
37 Observer 31/08/08
38 “Involvement of UBS in the global mining and oil and gas sectors” Berne Declaration June 2006
39 ‘Oil Producers limit the options of multinationals’ The Times, 04/02/08

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