Shell faces new legal challenge over drilling in Alaska

By staff writers
January 24, 2010

A company in which both the Church of England and Methodist church have one of their largest shareholdings, is facing a new challenge over controversial plans to drill for billions of barrels of oil in the Arctic's environmentally sensitive frozen waters.

Royal Dutch Shell has already been condemned by Amnesty International for bringing human rights abuses and environmental destruction to the Nile Delta. The Guardian newspaper reports that an alliance of conservation and Alaskan indigenous groups has filed a legal claim to prevent the company from drilling for oil this year in the Arctic Ocean's Chukchi Sea.

The US portion of the Chukchi Sea, which separates north-western Alaska from north-eastern Siberia, is home to endangered bowhead whales, threatened polar bears and rich and varied fish stocks. There are further concerns that more drilling in the region will increase warming in the Arctic, which is heating up twice as fast as the rest of the world.

The legal claim accuses the US minerals management service, part of the federal interior department, of waving through permission to allow Shell to drill wells on the basis of an "abbreviated and internal review" of the environmental dangers of exploration.

"Shell's drilling brings with it the risk of large oil spills," said Pamela Miller, Alaska programme director for the Northern Alaska Environmental Center. "Chronic spills are a fact of life from oil and gas operations on Alaska's North Slope, where over 6,000 spills have occurred since 1996, and more than 400 of these took place at offshore oil fields. In the icy conditions of the Arctic Ocean, there is no way to effectively clean up spilled oil."

Last year, the Anglo-Dutch oil group was forced to scale down oil drilling in the Beaufort Sea off Alaska amid concerns that oil spillages would cause devastation to marine life.

A Shell spokesman said: "The Chukchi Sea alone could be home to some of the most prolific undiscovered hydrocarbon basins in the US, and we believe those oil and natural gas reserves could play a major role in reducing our dependence on foreign sources of energy. Extensive scientific studies and technological advances demonstrate that we can operate in the Arctic in an environmentally responsible manner; it seems there are groups who are opposed to Arctic exploration, even though it can be done responsibly."

The issue has become increasingly fraught for environmentalists and, in a further embarrassment to Shell, one of the world's leading marine conservation scientists has resigned from the University of Alaska, claiming he lost state funding partly because of his criticism of Shell's Alaskan activities.

Professor Rick Steiner, who is one of the most respected and outspoken academic critics of the oil industry's environmental record, claims that the oil industry pays $300m to the University of Alaska – a sum which, he says, compromises its academic integrity. Steiner alleges the university was told by a state environmental funding agency that his stance on oil exploration was "a problem" which led to his grant being withdrawn.

A spokeswoman for the University of Alaska acknowledged that the grant was conditional on academics not being environmental advocates, but that the university offered to make up the the difference in Steiner's pay "specifically because we value our faculty and the necessity of academic freedom and freedom of speech".

"He was not forced to resign and there hasn't been action taken 'against him' by the university because of his views on oil or anything else," she added.

The oil industry provides about 40 per cent of Alaska's tax revenue and underpins the payment of an oil royalty to each Alaskan citizen. Shell did not comment to the Guardian on how much it contributes to the University of Alaska.

The Church of England has its largest shareholding in Shell, valued at £103.7m according to the last annual report of the Church Commissioners. It is the Methodist Church's second largest shareholding behind BP. Over 20 per cent of the Methodist Church's portfolio of shares is invested in oil and gas companies.

At the end of last year, the Methodist Church pledged to 'green' its investment portfolio, but said that it would continue to invest in companies like Shell, whose core business was the production of fossil fuels. The Church of England has also said that despite its campaigns against climate change, it will continue to seek to profit from oil companies.

An Amnesty International report last year said that that the company was responsible for bringing impoverishment, conflict, human rights abuses and despair to the majority of the people in the oil-producing areas of the Niger Delta.

Amnesty said that rights to health and a healthy environment, to an adequate standard of living (including the right to food and water) and to gaining a living through work, had been violated for hundreds of thousands of people. Many had only polluted water for drinking, cooking and washing and had to eat fish contaminated with oil and other toxins.

The Guardian newspaper also revealed last year that Exxon Mobil, in which the Church of England has a shareholding valued at £17.2 million (but in which the Methodist Church does not invest) is continuing to fund lobby groups which question the reality of global warming, despite a public pledge to cut support for such climate change denial.

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