WATCHING THE WORLD

David Knott
London
[email protected]

For the last few months Shell U.K. Ltd. and BP Exploration Operating Co. Ltd. have been under fire from Greenpeace.

The attacks have been aimed at field developments west of the U.K.'s Shetland Islands, where BP is operator and Shell its partner.

While the environmentalists have taken up entrenched positions, it is interesting to see how the positions of BP and Shell have changed.

Greenpeace sent a report to the U.K. government, which calls for a halt to oil exploration in the undeveloped West of Shetland area, citing limits for carbon dioxide emissions.

"To keep within these limits," said Greenpeace, "of a 1? C. rise in temperature and a 20 cm rise in sea levels, the world cannot afford to burn more than a quarter of known fuel reserves."

BP has estimated total fossil fuel reserves worldwide at 1.02 trillion bbl of oil, 4.94 quadrillion cu ft of gas, and 1.03 trillion metric tons of coal. Greenpeace said the quarter of known reserves represents only 5% of anticipated resources.

Bold steps

Chris Rose, deputy executive director of Greenpeace, said, "There is no alternative to a phase-out of fossil fuels, if we are to prevent climate change. Since we cannot burn all that we already have, to explore for more oil is not only futile but extraordinarily irresponsible."

To satisfy Greenpeace, BP and Shell would have to find something to do other than produce and utilize hydrocarbons. Naturally, they have other ideas.

Yet both companies have crossed an invisible frontier.

A couple of years ago they publicly took the general petroleum industry line that the link between climate change and fossil fuel burning has not been conclusively proved.

Since then, they have said things that no other petroleum company has dared to even hint at.

Last year, Shell said we should act to prevent climate change, and now BP has agreed.

BP Chief Executive John Browne told a Stanford University audience on May 19 that we must "begin to take precautionary action now" to prevent climate change.

Sustainable stance

While Shell and BP have moved a little towards the green position, they continue to seek and develop reserves.

Shell in particular has made public promises to pursue sustainable development.

Heinz Rothermund, managing director of Shell U.K. Exploration & Production, has snapped back at Greenpeace, arguing that following the environmentalists' agenda would keep much of the world in poverty.

"If we accept that economic growth and social development go hand in hand," said Rothermund, "and are worthwhile goals as we strive for world peace, there is no alternative to the continued use of fossil fuels.

"We may ultimately leave oil and gas in the ground, as we are leaving most of the coal in the ground. To manage a smooth transition from fuels producing high carbon dioxide emissions, such as coal, to fuels that emit less, such as natural gas, is a considerable challenge.

"It would be interesting to hear how Greenpeace envisions such an integrated process-which takes into account economic growth, social dimensions and environment considerations-should be managed."