Royal Dutch Shell

Nominated for actively investing in the energy-intensive tar sands, at the same time as pushing unproven Carbon, Capture and Storage (CCS) technology as a solution to climate change, whilst undermining initiatives to reduce CO2 emissions.

Background

In 2009 Shell became the world’s largest company. The Anglo-Dutch oil giant is also the world’s most carbon intensive oil company: A recent survey by environmental NGOs found that the average carbon intensity of each barrel of oil and gas Shell produces is set to rise dramatically, increasing by 85 per cent. Shell’s rapid re-carbonisation strategy is in direct contrast to governments who are trying to decarbonise their economies, reduce carbon emissions and encourage renewables.

Shell has pulled out of renewable energy a decade after setting up a special unit to promote wind and solar – and now its business strategy is based on developing controversial biofuels and producing oil from the highly polluting tar sands. Shell is leading the development of Canada’s energy-intensive tar sands, trying to argue it can be exploited in an environmentally-sensitive way.

Knowing it is becoming more vulnerable to a carbon constrained world, Shell has been leading industry lobby efforts in Washington, Brussels and the United Nations Framework on Climate Change to weaken and neuter legislation to tackle climate change. A key part of Shell’s lobbying strategy for Copenhagen is to persuade politicians that tar sands are a strategic part of the energy mix and that carbon emissions can be adequately mitigated through the as yet unproven Carbon, Capture and Storage (CCS) technology.

Promoting CCS

Shell, which holds key CCS patents, has been at the forefront of the business lobby pushing CCS as a solution to climate change, both in Europe and Canada. In October 2008, it was awarded over $800,000 from the Alberta and Canadian governments for a CCS project. This is despite a joint Canada and Alberta task force on CCS concluding, in 2008, that only a small percentage of CO2 released in mining oil sands and producing fuel can be captured.

At the EU Shell has been arguing that the climate change fight will be “wasted” without CCS and therefore the EU should pour public money into making the technology viable. The company is extremely influential in the leading EU lobby organisation - the European Technology Platform of Zero Emission Fossil Fuels Power Plants (ZEP) - which is “driving CCS forward in Europe.” The head of ZEP’s advisory panel is Dr. Sweeny from Shell. ZEP’s mandate is to “enable CCS as a key technology for combating climate change” and to “make CCS technology commercially viable by 2020 via an EU-backed demonstration programme.”

Shell has also been heavily lobbying the EU Parliament, especially through Chris Davies MEP, the Rapporteur who is leading in Parliament on CCS. Davies argues that “Shell’s strategic thinking and vigorous advocacy has played a crucial role in making the development of CCS technolgy a priority within the EU strategy to reduce global warming emissions”.

Chris Davies has conceded that he incorporated Shell’s ideas. David Hone, Shell’s climate change adviser, “played an important role in giving substance to the idea of using carbon allowances as a means of supporting CCS capital investment”, said Davies. In June 2009, the Brussels-based lobby organisation Eurelectric, which represents Europe’s biggest electricity generators, was so pleased with Davies’ successful promotion of the industry’s position on CCS in the European Parliament that they gave him a special award.

Chair of the Eurelectric Award panel Paul Bulteel told the audience that Davies understood that CCS “is the answer to making coal-based power compatible with climate change objectives”.

Lobbying to weaken proposed climate laws

In the US, Shell has spent $2.4 million lobbying politicians so far in 2009. During this time, it has lobbied on the latest attempt by US law makers to tackle climate change, the American Clean Energy Security Act, also known as the Waxman-Markey Bill.

Shell is a leading member of the United States Climate Action Partnership (USCAP) and has used its position within that partnership to weaken climate legislation under discussion in Congress. The company was instrumental in removing the only provisions in the Bill that would have stopped the proposed increases in US imports of tar sands.

Meanwhile in Brussels, Shell replied to the European Commission’s proposal to cut CO2 emissions by 20% by 2020 with a vigorous lobbying campaign. Through two industry lobby organisations – the European Petroleum Industry Association (EUROPIA) and CONCAWE, the oil industry research association – Shell has been extremely active in trying to weaken down the proposed legislation, succeeding in influencing the rules on how the 20% target can be met.

The Commission’s Fuel Quality Directive proposed that producers reduce emissions from their fuels by 10% by 2020 compared with 2010 levels. The main target of the Directive was the oil industry. Although this 10% reduction target was seen as being achievable, EUROPIA stated that it “should be withdrawn from the Directive proposal”.

EUROPIA and CONCAWE argued the oil industry could do nothing to reduce the carbon intensity of mineral oil-based fuels, and that the solution was in biofuels. When the Commission proposed sustainability criteria for biofuels, EUROPIA tried to get them removed too.

Another element of the EU’s 2007 “Climate action and renewable energy package” was reform of the EU Emissions Trading Scheme. These include a plan to charge refineries for 20% of their emission permits from 2013, rising to 100% by 2020. Once again Shell and other oil companies lobbied against the proposals and managed to get refineries exempted up to 2013.

Despite undermining the European Commission’s climate proposals, Shell has managed to gain assistance from the Commission to help greenwash its operations. Earlier this year, Shell lobbied the President of the Commission, Jose Manuel Barroso to lend his “Patronage” to the Shell Eco-Marathon held near Berlin in May. After Barroso accepted the invitation, documents released under Freedom of Information legislation, show that Shell suggested that Barroso “could use the EU Flag to start the Grand Parade”.

Shell wanted the EU flag to give an official seal of approval to its climate greenwashing campaign.

Shell was invited to comment on its nomination for the Angry Mermaid Award but did not respond.