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An article from Do or Die Issue 7. In the paper edition, this article appears on page(s) 59-65.

The Oil Industry

Pollution, Politics and Public Relations

The oil industry is growing increasingly aware of its serious image problem. Put differently, people are becoming increasingly aware of the systematic abuses of people and nature inherent in the production and processing of petroleum.

Ecological impacts of the UK offshore industry

Here in the UK, the ecology of the North Sea has been devastated by over 30 years of oil exploitation. Now the oil companies are industrialising new, pristine areas, such as Cardigan Bay off Wales, and most significantly the North Atlantic, west and north of the Shetland Isles. These host an enormous biodiversity (including numerous cetaceans - whales, dolphins and porpoises), due to being at the interface between warm and cold water. The North Atlantic is deep water, a poorly understood ecology, recently found to contain rare cold water coral.

The ecological damage of the oil industry is not just from disasters such as the Sea Empress (Pembrokeshire, February 1996) or Braer (Shetland, January 1993) groundings; the impacts are systematic, arising from its ordinary, day-to-day operations [see box opposite]. "The oil industry is environmentally suspect through and through", according to Guy Linley-Adams, Director of Conservation at the Marine Conservation Society. "The latest official figures show a huge rise in pollution. We can but wonder what the figures concealed by the DTI and UKOOA [UK Offshore Operators Association] will show"1.

In 1996 223 oil spills were reported by companies to the Department of Energy. However, reporting is voluntary, and 82 slicks were detected during 257.5 hours (just 3% of the year) of aerial surveillance by the DTI (Department of Trade and Industry), of which only 12 were reported 2. Discharges of oil and chemicals have various lethal and non-lethal effects on fish, birds, molluscs, and cetaceans and other mammals. These include cancers, damage to growth, to feathers, scales and skin, to respiratory systems, to livers and to immune systems, and also disturbance of reproductive, feeding and other behaviour. Environmental umbrella group Joint Link estimates that even in good conditions only 10-15% of the oil from spills is ever recovered 3.

The first stage in the oil production process is exploration, mainly by seismic surveying. Underwater explosions of around 250 decibels (the human pain threshold is at 140 db) are created with air guns, and underlying geology deduced from measurements on the reflected sound waves. This has a particularly disturbing effect on cetaceans, who use sound for communication and navigation, and may even be responsible for whale groundings 4. Fish are also displaced, which in turn affects the cetaceans and birds which feed on them. Studies have shown that the number of cod and haddock is reduced by up to 45% within 5 nautical miles of the blast 5. The blasts can damage tissues, including lungs, guts and ears in mammals, and swim bladders in fish.

Then, during the drilling stage, "muds" (lubricants) are pumped down, to keep the drillbit cool and to regulate the flow of oil and gas. They consist of hydrocarbons, heavy metals (including cadmium, mercury and lead) and other toxic chemicals, and also contain corrosion inhibitors, detergents and biocides. Drill cuttings (the removed rock) are dumped on the seabed (totalling over 1.5 million tonnes in the UK North Sea). These cuttings smother seabed wildlife, and significant effects on the structure of ecological communities have been observed several kilometres from platforms 6. Not only are the rocks surrounding oil reservoirs often radioactive, but cuttings are also contaminated with oil, "muds" and chemicals. 3,826 tonnes of oil were discharged with cuttings offshore Britain in 1996 7. To get an idea of the scale of the problem here, one must remember that over 6,000 wells have been drilled in the North Sea since 1964.

Rig and pipeline installation causes further disturbance to seabed ecosystems, through dredging, filling and anchoring. Underwater structures will be treated with protective chemicals, which release toxins into the water. From the rig there are discharges due to deck drainage, cooling water from machinery and sewage, plus constant noise and light pollution (including that from gas flaring - also a major source of CO2).

Most fields contain water as well as oil and gas. This "production water", containing both oil and chemicals, receives only very simple treatment before being discharged. As fields mature, the quantity of production water increases as the oil decreases, and may constitute up to 94% of production 8.

The scale of chemical usage in the North Sea is not documented; however discharges of production chemicals are estimated at 6,000 tonnes per year (30% of quantity used), plus 84,000 tonnes of drilling chemicals (57%).9

In September, in response to pressure from the European Commission and from campaigners on environmental impact assessments (EIAs), Energy Minister John Battle announced that he would "fast track" to bring in this year the latest European directive, which requires availability of EIAs on offshore developments for public inspection. However, there was no complaint from the industry at this, perhaps because of its severe need to be perceived as environmentally responsible. Battle went on to say that the new law would not delay offshore projects, nor raise the companies' costs: "It should all be fairly routine", he said 10.

Impact of oil in developing countries

In developing countries the environmental impact of oil operations is magnified many times, and this severely disturbs the lifestyles and livelihoods of communities living nearby. This is well documented, particularly in the Shell/Ogoni case11 (although some reports suggest that the current Caspian Sea oil rush makes Nigeria look sparkling clean12). It is worth noting that on top of the direct impacts, oil - due to its sheer value as a commodity - aggravates tensions between rival ethnic groups and with central governments over royalties and compensation. In many cases this leads to brutal repression by the police and military to keep dissent under control.

The same patterns of exploitation appear the world over - look for example at BP's collusion with the military to "disappear" protesters in Colombia13; at the use of forced labour by Premier and Total in Burma14; at the devastating impact on tribal peoples by Mobil15 and Shell16 (separately) in Peru, by Texaco previously and now Occidental in Ecuador17, by Occidental and Shell in Colombia18. A less explicit form of abuse by oil is in political relations - note for example the West's deafening silence over the bloodbath in Algeria, a country where BP has substantial interests.

Most oil in developing countries is produced in militarised or semi-militarised zones. Some of the arms recently sold to Indonesia under Robin Cook's "ethical foreign policy" have been sold on the condition that they are available to protect UK business interests (notably contractor Amec) in the giant Natuna gas field in the South China Sea, whose ownership is disputed19.

Many wars are fought over the ownership and control of oil. The first round of licensing for oil around the Falklands occurred this year, now deepwater technology has become available. Chechnya's secession from Russia was only worth fighting over because of the strategic pipeline which goes through Grozny, carrying Caspian oil to the Black Sea ports. The conflict came to an end when Yeltsin realised that his military operation had cost more than re-routing the pipeline20. And since Indonesia's brutal invasion of East Timor twenty years ago, it has worked with Australia (which has kept rather quiet about human rights), to develop the Timor Gap for oil exploitation21. The greatest area of conflict over oil of course remains the Middle East, which supplies 38% of the world's oil, and 51% of the US's. It is expected to supply 48% of world oil by 2010 22.

Climate change

Perhaps the most fundamental impact of the industry is climate change. The predicted changes over the next 100 years will be faster than any for at least 10,000 years. The possible and likely impacts are reported not just by "scaremongering" green campaigners but by the Second Working Group of the Intergovernmental Panel on Climate Change (IPCC). Flooding and coastal erosion currently threaten 46 million people, and this could rise to 92 million people with a 50 cm rise in sea level, resulting in massive population migration, and loss of infrastructure of up to 10% of GDP in some countries. Freak weather events are likely to cause much damage. "Climate change is likely to have wide-ranging and mostly adverse impacts on human health, with significant loss of life", through heat waves, extreme weather events, contaminated water supplies, air pollution and increased transmission of disease, including malaria (threatening 60% of the world's population), yellow fever, cholera and giardiasis. Impacts on ecosystems will be huge, with major disruption to agriculture and numerous species extinctions 23.

Worst of all, the effects of radical climate change are highly unpredictable [the "broken thermostat effect"] so in some cases the impacts could be even worse than already forecast. One recent model suggests that the change in ocean salt concentration due to melting icecaps will impact upon the mechanisms powering the Gulf Stream, and eventually reverse it. The result would be the delivery of cold Scandinavian water to the UK, instead of warm water from the Gulf of Mexico, and could lead to an average temperature drop in this country of up to 10°C.

The Sea Empress at Milford Haven

There has already been a measured mean global temperature rise of 0.6°C since 1860 24. The maximum tolerable degree of climate change suggested by the United Nations Advisory Group on Greenhouse Gases (AGGG) is a further 1°C rise. Beyond this, there may be "rapid, unpredictable and non-linear responses that could lead to extensive ecosystem damage"25 (such as the emission of trapped greenhouse gases due to thawing of the permafrost, and evaporation from the sea) - also known as the 'runaway greenhouse effect'. If we accept this maximum, the IPCC's figures give us a total quota of 225 billion tonnes of carbon that we can burn, in the whole of the rest of the human race's future 26. This figure assumes an immediate halt to deforestation, and ignores non-linear effects; it also ignores the fact that climate systems take some time to reach equilibrium - even if we stopped producing CO2 today, it could be a few decades before the average temperature stopped rising. This corresponds to 40 years of fossil consumption at current levels (6 bn tonnes carbon / year), and about a quarter of the world's proven reserves (820 bn tonnes 27). The conclusion is that the human race cannot even afford to burn the fossil fuels it already knows about. That the oil and gas companies continue to explore for new reserves is indefensible.

It was hoped that December 1997's Kyoto summit, which set legally binding targets for CO2 emissions, would be a turning point. However, even while one of the worst 'El Nino' weather systems of this century raged across the Pacific, any really meaningful action on climate change was blocked by Japan, the US, Switzerland, Canada, Australia and New Zealand, plus of course the fossil fuels industry. After a week and a half of haggling, the final agreed proposal was condemned by all of the major environmental groups present (Climate Action Network, WWF, Greenpeace and FoE). It offers a global 5.2% cut in emissions by 2012 (compared to 1990 levels) shared between the industrialised nations, ranging from an 8% and 7% cut for the EU and US respectively, to an 8% increase for Australia and 10% increase for Iceland. To put this in perspective, the IPCC recommends a 60-80% cut in the burning of fossil fuels, and the Alliance of Small Island States (whose very existence is threatened by climate change, especially since they don't generally have the money to build extensive flood defences) proposed an initial 20% cut in CO2 emissions by 2005, followed by bigger cuts thereafter.

Worse still, not only was no compliance mechanism established, but the final agreement involves several loopholes. In particular, 'carbon trading' is allowed (ie. big polluters such as the US buying increased CO2 emission rights from other countries) with as yet no agreed rules or restrictions. Some economists now predict carbon emissions to become the next major commodity on the global markets. Countries are also allowed to create more 'forest sinks' [to supposedly absorb carbon] rather than achieving their agreed targets, thus avoiding having to even meet the pitiful targets set for fossil fuel reduction, while covering their land with cash-crop monoculture. Since 'carbonomics' is far from being an accurate science, insufficient afforestation could lead to the global net CO2 reduction being even less than the 5% target 27. Thus, all in all, there is very little pressure for countries to reduce their emissions.

Oil industry sponging off the state

A characteristic of oil production world-wide is the extent to which government supports the industry (as well as not challenging it - as at Kyoto). In the UK, with substantial markets for petroleum products, we don't suffer extra-judicial killings by the state, yet we do still see extensive government "welfare" for the industry.

The Department of Trade and Industry is the regulator for the oil and gas industry, and is responsible for approving new developments. It grants production licenses, lasting three years initially, for companies to explore and exploit "blocks" of about 100 square miles. "Rounds" of licensing occur every year or two, and licenses are awarded to whoever is thought likely to extract the most oil and gas 29.

The DTI's work as environmental regulator of the industry is hopelessly inadequate, at least partly because of the conflict with its other role - "to maximise the economic exploitation of natural resources". It relies mainly on the companies' self-reporting of oil spills. When inspections do occur, they are by appointment, rather than through random surprise checks. It remains to be seen whether the Labour government lives up to its promises to improve on both these issues. Since the 1971 Prevention of Oil Pollution Act, the DTI has only made one prosecution 30. Meanwhile, information about the environmental records of the companies is not available to the public. The Marine Conservation Society had to wait nine months to receive such information, having refused to pay over £4,000 to search the database itself. While the DTI refuses to pass on information about the companies, all correspondence from environmentalists ends up on the desk of UKOOA, the industry's trade association 31. A leaked letter from John Battle in September detailed his collusion with the industry on a strategy to deny Greenpeace publicity for its climate change campaign, and to limit its effectiveness by litigation 32.

Most scandalous of all is that the UK gives its oil and gas to companies for free. Companies pay "rent" for a license to operate in an area, but beyond that any petroleum they remove and sell is theirs to keep, gratis. Whereas in most countries it is paid for in Royalties and tax, both have been abolished for new fields in this country. For fields approved since 1993, the only tax is corporation tax, the tax on doing business which companies pay whether they are making shoes or selling toothpaste 33. While proponents of received economic dogma will argue that without such a fiscal policy (the second laxest in the world after Ireland) companies would be unable to operate in the small and complex UK fields, this handout to one of the world's most profitable industries jars with the government's cuts to welfare for people who actually need it, and constitutes a clear case of corporate welfare. Although there is some concern in the industry about the taxation review for the spring 1998 budget, John Battle has promised no shock oil taxes. "We do not want to drive people away", he said 34. The first New Labour budget in July 1997 removed the levy on North Sea gasfields.

Don't panic - the industry is working on it

The UK oil industry has a devastatingly sophisticated public relations machine. A vast quantity of environmental reports and funding of environmental groups allow it to portray itself as the reasonable party, "engaging in debate". Those who criticise a company in the way it wants them to are easily dismissed as ill-informed (but thanks for your comments anyway), while it is "violent extremists" who get hot-headed and take direct action.

Recently however, the industry has increasingly been allowing its critics to speak publicly, and it is keen to be seen to get involved in "dialogue", to work "in partnership" with environmentalists. Friends of the Earth and Greenpeace have both had meetings with BP and Shell over the summer. This tactic too is highly effective. By engaging in discussion, campaigners lose their critical distance; their views are compromised and their positions de-radicalised, and they become less able to openly discuss the real problems of the industry. Meanwhile, the real radicals are isolated as extremists, and the environmental movement has been nicely cut in half.

Long debate about single issues keeps people from pinpointing the industry's fundamental, systematic problems. Shell's operations in Nigeria are claimed to be a one-off slip-up of good practice, and can be resolved by tighter business principles and more "consultation with communities". Controls on leaks, spills and discharges can always be tightened, and then of course there is the universal faith of industrial environmentalism, Technology.

Enter climate change

Climate change presents a different kind of public relations problem, in that it presents a threat to the industry's very existence. Burning of carbon releases carbon dioxide into the atmosphere, which traps the sun's rays and influences climate. It is as simple as that, and no new technology will change it.

Against strong consensus among scientists and even politicians, the American oil majors, led by Exxon (Esso) and co-ordinated through the Global Climate Coalition (GCC), continue to publicly state that the science of climate change is unproven 35. They know that this position is not credible in political circles, so instead they argue that the economic costs of cutting CO2 emissions are just too high, and that unless developing countries also cut their emissions, a bias will be created against US competitiveness. (Or, in other words, the huge global bias in favour of US competitiveness would be reduced). Considerations of equity, of the world sharing its ecological quotas, don't seem to even get mentioned. Although the GCC was largely laughed at in Kyoto, its real power is back home in the US, and it had won the battle before Al Gore's plane even took off. The GCC spent $13m on advertising in the US in 1997. Meanwhile the Senate passed by 95 votes to zero a resolution saying that the US should reject any treaty which harms its economy. Congress has been similarly malleable.

Europe gained environmental brownie points for its Kyoto proposal of 15% CO2 cut by 2010, and the UK for its 20% (although this is due to the replacement of coal-fired power stations with gas). In this atmosphere of environmental self-congratulation, the European oil companies simply cannot, in PR terms, get away with the hard-line position adopted by the US companies. Keen to be seen to be doing as much debating as everyone else, several, including BP and Shell, have made public statements that climate change is (probably) happening due to human activity. These statements have weakened the US companies' position.

The large environmental NGOs have congratulated BP and Shell for their "progressive" attitudes, and for upping their investments in renewable energy in 1997. This congratulation has been justified by some as widening the split in the industry; however it sends out rather confusing messages, and risks creating a corresponding split in the environmental movement. The fact is that companies cannot reduce their hydrocarbon output in any meaningful way, as the resulting loss of profits would lead to massive disinvestment by shareholders, and probably to the sacking of directors by the institutional investors. The "action" BP and Shell have offered is more debate, more investment in technology, and emphatically not a gradual phase-out of fossil fuels. Meanwhile they divert attention from the real problem by pointing to their cuts in emissions from refinery operations.

Thus we see that the companies cannot save us from climate change. Kyoto has shown that the government will not (or cannot) help either.

This means we will have to dismantle the oil industry ourselves.

Further reading

'The Prize - the epic quest for oil, money and power' by Daniel Yergin, pub. Simon & Schuster 1991 - The classic text on the history, politics and culture of the oil industry.

Ignite, issues 1 (Nov 1996) & 2 (Dec 1997), from Platform (address below) - satirical free newspaper looking at the oil industry, TNC culture and London transport. #1 focuses on human rights and #2 on climate change and addiction.

Shell Alternative Annual Report, 1997, by Project Underground (address below) - in depth analysis of Shell's PR rhetoric and the reality in Ogoni, and how the new development at Camisea in Peru is going the same way.

Index on Censorship #4, August 1997 (tel. 0171 278 2313) - focusing on oil and human rights, especially in the Caspian Sea region.

'Crude operators', by Andrew Rowell, in The Ecologist Vol 27 No3, May/June 1997, p.99 - on general trends in the industry toward frontier areas, and the impact of these trends on people and nature.

'Putting the Lid on Fossil Fuels - why the Atlantic should be a frontier against oil exploration' by Chris Rose, Greenpeace, 1997 - the basis of Greenpeace's 'No new oil' campaign': carbon logic argument for ending fossil fuel use, plus the ecology of the Atlantic Frontier.

Corporate Watch #5/6, Winter 1997/98, pp.30-33 (see Contacts and Reviews, this issue) - three articles: BP's corporate culture and power structure, and personality of Chief Executive John Browne; analysis of inadequate oil regulation by DTI; argument against trusting oil companies to develop renewable energy.

Oil, Shell Briefing Service, 1990 - The basic, easy-to-understand introduction to what the oil industry does and how it does it - given by Shell to its employees. Available free with a good blag from Group Public Affairs (tel. 0171 934 5293).

'Midnight Oil: Work, Energy, War, 1973-92' by the Midnight Notes Collective, Autonomedia 1992. Useful and thought provoking autonomist analysis of the Gulf War and the global oil economy.

Contacts

Marine Conservation Society
9 Gloucester Road, Ross-on-Wye, Herefordshire HR9 5BU, 01989 566 017
http://www.mcsuk.mcmail.com/
On the ecological impact of the UK offshore industry.

Project Underground
1847 Berkeley Way, Berkeley, California 94703, USA, tel. 001 310 705 8983
project_underground@moles.org
http://www.moles.org/
On the impact of oil and mining in the South.

Oilwatch
0171 435 5000
Support and networking group for groups affected by oil in the South, especially South America.

Climate Action Network UK
49 Wellington St, London WC2E 7BN, 0171 836 1110
Information exchange on climate change. Publishes simplified explanatory briefings on the science, the policy process etc.

Platform
7 Horselydown Lane, London SE1 2LN, 0171 403 3738
platform@gn.apc.org
On oil and corporate culture generally, and especially BP.

References

1: Marine Conservation Society News Releases, 4/9/97, 'Marine Conservation Society complaint upheld - UK oil industry breaking European law', and 1/8/97, 'Official pollution from UK oil rigs up'

2: Data supplied to Marine Conservation Society by the DTI; MCS News Release, 1/8/97, 'Official pollution from UK oil rigs up'

3: Joint Link (tel. 01686 629 194), Polluting the Offshore Environment - the practices and environmental effects of Britain's offshore oil and gas industry, 1996, p.7

4: According to 18 whale and dolphin experts, from universities in Britain, Canada, Australia and New Zealand - Guardian, 14/5/97

5: Engas, Lokkeborg, S & Soldal, AV, 'Effects of seismic shooting on catch availability of cod and haddock', pub. Institute of Marine Research, Norway, 1993, quoted in Joint Link (op cit 3) p.6

6: Olsgard, F & Gray, JS, 'A comprehensive analysis of offshore oil and gas exploration and production on the benthic communities of the Norwegian continental shelf', pub. Marine Ecology Progress Series,1995, quoted in Joint Link (op cit 3) p.9

7: DTI, The Energy Report Vol.2 - Oil & Gas Resources of the UK, pub. the Stationery Office, 1997

8: Neff, JM, Rabalais, NN & Boesch, DF, 'Offshore oil and gas development activities potentially causing long-term effects', in Boesch & Rabalais (eds), Long Term Environmental Effects of Offshore Oil and Gas Development, pub. Elsevier, London, 1987, quoted in Joint Link (op cit 3), p.9

9: Hudgins, CM, 'Chemical usage in North Sea oil and gas production and exploration operations', report for Norwegian Oil Industry Association, pub. Petrotech Consultants Inc, Texas, 1991, quoted in Joint Link (op cit 3), p.10

10: Patricia Nicol, 'Government clamps down on oil projects', in Offshore Journal, p.1, supplement to Aberdeen Press and Journal, 11/9/97

11: More information: Project Underground, Shell Alternative Annual Report (below), or contact Delta (see Reviews and Contacts this issue).

12: See, for example, Index on Censorship #4, 1997 (below)

13: Contact: Coalition Against BP in Colombia, BCM 7750, London WC1N 3XX, 0171 357 0388; or see Gillard, M, 'BP are oil rush villains' in Guardian, 11/9/96; or Ignite #1(below), p.1 and #2, p.13

14: Contact: Burma Action Group, 0181 341 9115; or see Ignite #2 (below), p.16

15: Contact: Survival International, 11-15 Emerald Street, London WC1N 3QL, 0171 242 1441

16: See Project Underground, Shell Alternative Annual Report (below)

17: See Index on Censorship #4, 1997 (below), pp. 153-162 & 171-176

18: See John Vidal, 'Cliffhanger', in Guardian Weekend, 20/9/97, p.16

19: Financial Times, 30/8/97, p.4

20: See Ignite #1 (below), pp.3 & 14-15; or Tegantai, April 1997, 'Oil and the other dogs of war', from Oilwatch (contact details below)

21: Contact: Tapol, 8 Hop Gardens, London WC2N 4EH, 0171 497 5355, hops@gn.apc.org

22: Dr Mamdouh G Salameh, 'Access to Middle East Oil - China vs the US', Petroleum Review, Nov 1997, p.516

23: Climate Change 1995: Impacts, Adaptations, and Mitigation, Contribution of Working Group II to the Second Assessment Report of the Intergovernmental Panel on Climate Change, pub. Cambridge University Press. See also: "Some like it Hot: Climate Change, Biodiversity and the Survival of Species", Markham, Dudley and Stolton, World Wide Fund for Nature 1993.

24: ibid

25: UN AGGG, 'Responding to climate change: tools for policy development', ed. J Jager, pub. 1990, Stockholm Environment Institute

26: Climate Change 1995: The Science of Climate Change, Contribution of Working Group I to the Second Assessment Report of the Intergovernmental Panel on Climate Change, pub. Cambridge University Press; discussed in Putting the Lid on Fossil Fuels (below), pp.45-59

27: op cit 23; discussed in Putting the Lid on Fossil Fuels (below), pp.45-59

28: For accounts of the Kyoto conference, see the websites http://www.foe.co.uk/campaigns/climate/, http://www.greenpeace.org/~climate/ and http://www.igc.org/climate/Eco.html [ Moved to http://www.climatenetwork.org/eco/ ]. The text of the Kyoto protocol can be found at: http://www.cop3.de/fccc/docs/cop3.htm [ 13 Aug 2002 Broken ], and http://www.libertytree.org/News/KyotoProtocol.special.html [ 13 Aug 2002 Broken ].

29: see DTI, The Energy Report Vol.2 - Oil & Gas Resources of the UK, pub. the Stationery Office, 1996, p.23

30: Corporate Watch #5, 'DTI Diagnosed', Winter 1997, p.32

31: Marine Conservation Society, News Release, 'Government oil rigs cover up exposed', 23/6/97

32: David Hencke, 'Labour tells oil firms to sue Greenpeace', in Guardian, 17/9/97, p.2

33: op cit 29, p.11

34: Lloyd List Energy Day, 'Britain brings forward field EIAs requirement', 11/9/97, p.3

35: see Corporate Watch #4, 'Disguise the Limit', June 1997, p.22, or the GCC's amusingly entitled website: www.climatefacts.org. For more general industry anti-climate lobbying, see Corporate Europe Observatory's The Weather Gods (December 1997), available from CEO, c/o A SEED Europe Office, P.O. Box 92066, 1090 AB Amsterdam, The Netherlands, ceo@xs4all.nl, http://www.xs4all.nl/~ceo/