News Article | February 28, 2017
Against the backdrop of the longest winning streak in thirty years on the Dow Jones Industrial Average, which nudged up a touch more to 20,837.44 by yesterday’s close and less than a percent off breaching the 21,000 theshold, all eyes are firmly on Donald Trump’s first appearance before Congress this evening. One wonders if the rally built up to date will fizzle out or possibly reach new heights. A day after the Dow extended its winning streak to twelve straight trading sessions - the longest in 30 years - US futures appeared a little flat prior to the open this Tuesday. The US index of blue-chip companies is now up some 26% over the past one year and a tad over 2,000 points (+10.7%) to the good since the US presidential election took place in early November. But big questions centre on how will Trump’s appearance before Congress go and will investors continue to tolerate all talk but not much detail? In addition to the U.S. President, three Federal Reserve officials are scheduled to appear through the day in Washington, D.C. The sustainability of this rally in the near term may well rest on how Trump performs this evening and whether promises of big spending and phenomenal tax reforms are accompanied by any insight into what they will actually entail. “Trump’s words, while lacking few if any actual details, have so far been effective in getting investors pumped up at the prospect of a stronger economy,” said Craig Erlam, a senior Market Analyst at OANDA, a multi-asset brokerage that has offices in eight major financial centers and clients in over 100 countries. The London-based analyst added: “But the longer this goes on, the less effective these promises are going to become and higher the risk is that the rally will run out of steam.” He could have a point there and in recent month I have written on irrational exuberance and the so-called equity 'melt-up'. From what we do know, just this Monday Trump told the National Governors Association meeting at the White House in Washington that that he would propose additional spending on public safety, including more initiatives directed at stopping illegal immigration. He certainly wants to 'Make America Great Again', as he espoused in his campaign, and that is exactly what he says he intends to do. On top of that the New York-born billionaire promised a big statement on infrastructure in the speech to Congress today and revealed he would call for extra investment to rebuild old roadways and airports as well as cut taxes. One could probably also throw bridges across America that are in need of repair going by the state of play on that front. As outlined to the governors he is also expected to discuss his plan to increase military spending by nearly 10% or $54 billion (c.£43bn) in 2018, offset by equal cutbacks in non-defense spending that are likely to include substantial reductions in foreign aid. That news helped to give the Dow Jones, S&P 500 and UK’s FTSE 100 a lift yesterday. It’s probable too that the 45th U.S. President will reiterate some of the comments made in a speech at Conservative Political Action Conference last Friday in Maryland. At this gathering he stated that: “We will reduce taxes. We will cut your regulations. We will support our police. We will defend our flag. We will rebuild our military. We will take care of our great, great veterans.” The last few sessions may have seen the Dow extend its winning streak but the gains have been paltry. Yesterday it rose a little over 15 points - equivalent to 0.08%. And, the market may well already be “experiencing Trump fatigue” as OANDA’s Erlam contended. He added: “Now he is in a position where he must deliver, and in a big way, or markets could quite quickly turn against him. I think Trump fully intends to deliver on the substantial promises and therefore in the longer term, these levels may be justified. The risk is that he is unable to do so as quickly as he hoped at which point doubt will set in and markets may be preparing for the prospect of that a little in recent days.” While Trump’s appearance today is the clear stand out event, there are a number of others that could have an impact on the markets prior to this. Three Fed policy makers are due to appear throughout the day. Only one of which though, Patrick T. Harker, current President of Federal Reserve of Philadelphia, is a voting member on the Federal Open Market Committee (FOMC) this year. The other two, namely John C. Williams, President of the Federal Reserve Bank of San Francisco, and James Bullard, President of the Federal Reserve Bank of St. Louis, are both be voters over the next couple of years and have insight and a voice in the discussions. “Most policy makers have broadly stuck to the same line over the last couple of months, that a hike sooner rather than later will be appropriate, while offering little insight on when exactly that would be referring to,” posited Erlam. He added: “Market pricing would suggest that means May or June  although the latter would make three hikes this year - as per the Fed’s own forecasts - very difficult." The next FOMC meeting is a 2-day affair scheduled for 14-15 March, which will be associated with a Summary of Economic Projections and a press conference by chair Janet Yellen. And, according to data from Reuters the probability of an interest rate hike of 0.25% (25 basis points(bps)) the FOMC’s upcoming gathering this March is put at 34.3% - versus ‘No Change’ (65.7%). The picture is similar when looking at CME Group’s FedWatch tool and Fed funds futures probability tree calculator. The CME’s data probabilities of possible Fed Funds target rates are based on Fed Fund futures contract prices assuming that the rate hike is 25 bps and that the Fed Funds Effective Rate (FFER) will react by a like amount. There is also a host of economic data due out today. The stand out releases on this front centre on US gross domestic product (GDP), consumer spending and oil inventories. These include the second release of US fourth quarter GDP, which is expected to be revised up slightly from 1.9% to 2.1%. There is also the Conference Board (CB) Consumer Confidence data as well as some other lower level releases. Having declined moderately in January 2017, the CB Consumer Confidence index rose this February, and now stands at 114.8 (1985 = 100), up from 111.6 in January. A CB consumer confidence reading that is stronger than forecast is generally supportive (i.e. bullish) for the US dollar, while a weaker than forecast reading is generally negative (bearish) for the greenback. Then later this evening, the American Petroleum Institute (API), the national trade association representing all aspects of America’s oil and natural gas industry with over 625 corporate members, will report its inventory figures for last week. The last few of these have been fairly consistent with the number from the U.S. Energy Information Administration (EIA), which was released on Wednesday. As at 11.59am (EST) in New York today the Dow Jones was barely changed from Monday’s close and stood at 20,834.51, off by 2.93 points or a mere -0.01%. Watch this space.
News Article | February 28, 2017
Climate change “at a rate faster than at any time since the end of the ice age – change too fast perhaps for life to adapt, without severe dislocation”. That was the startling warning issued by the oil giant Shell more than a quarter of a century ago. The company’s farsighted 1991 film, titled Climate of Concern, set out with crystal clarity how the world was warming and that serious consequences could well result. “Tropical islands barely afloat even now, first made inhabitable, and then obliterated beneath the waves … coastal lowlands everywhere suffering pollution of precious groundwater, on which so much farming and so many cities depend,” says the film’s narrator, over disturbing images of people affected by natural disasters and famine. “In a crowded world subject to such adverse shifts of climate, who would take care of such greenhouse refugees?” The film acknowledged the uncertainties in the computer model predictions at the time, but noted the various scenarios had “each prompted the same serious warning, a warning endorsed by a uniquely broad consensus of scientists in their report to the United Nations at the end of 1990”. “What they foresee is not a steady and even warming overall, but alterations to the familiar patterns of climate, and the increasing frequency of abnormal weather,” it cautioned. “It is thought that warmer seas could make destructive [storm] surges more frequent and even more ferocious.” “Whether or not the threat of global warming proves as grave as the scientists predict, is it too much to hope as it might act as the stimulus – the catalyst – to a new era of technical and economic cooperation?” the film concludes. “Our numbers are many, and infinitely diverse. But the problems and dilemmas of climatic change concern us all.” The film was made for public viewing, particularly in schools and universities, but is believed to have been unseen for many years. It was remarkably prescient, according to Prof Tom Wigley, who was head of the Climate Research Unit at the University of East Anglia when it helped Shell with the 1991 film. “It is amazing it is 25 years ago. Incredible,” he said. “It was quite comprehensive on what might happen, what the consequences are, and what we can do about it. I mean, there’s not much more.” He said the predictions for temperature and sea level rises in the 1991 film were “pretty good compared with current understanding”. “What is really striking is nothing has happened [since] to make you doubt the science as it was stated then,” said Tom Burke, at the green thinktank E3G and a former member of Shell’s external review committee. But Shell’s actions on global warming since 1991, such as major investments in highly polluting tar sands and lobbying against climate action, have been heavily criticised. In 2015, it was accused of behaving like a “psychopath” by the UK’s former climate change envoy and of being engaged in a cynical attempt to block action on global warming. Even its own former group managing director, Sir Mark Moody-Stuart, said in 2015 it was “distressing” that “remarkably little progress” had been made on climate change by Shell and other oil companies. The revelation of the film, obtained by the Correspondent, a Dutch online journalism platform, and shared with the Guardian, has renewed the criticism. “The film shows that Shell understood that the threat was dire, potentially existential for civilisation, more than a quarter of a century ago,” said Jeremy Leggett, a solar power entrepreneur and former geologist who had earlier researched shale deposits with Shell and BP funding. “I see to this day how they doggedly argue for rising gas use, decades into the future, despite the clear evidence that fossil fuels have to be phased out completely,” he said. “I honestly feel that this company is guilty of a modern form of crime against humanity. They will point out that they have behaved no differently than their peers, BP, Exxon and Chevron. For people like me, of which there are many, that is no defence.” Paul Spedding, HSBC’s former global head of oil and gas and now at the thinktank Carbon Tracker, said about half of Shell’s reserve base is natural gas, the least carbon intensive of the fossil fuels. “However, its oil portfolio could be a ticking tar-sands time bomb. Tar sands, which make up nearly 30% of group oil reserves, are significantly more carbon intensive than conventional oil. As things stand, Shell’s oil production is destined to become heavier, higher cost, and higher carbon, hardly a profile that fits the outlook described in Shell’s video.” Shell had, in fact, known of the risks of climate change even earlier. A “confidential” company report written in 1986, also seen by the Guardian, noted the significant uncertainties in climate science at the time but warned of the possibility of “fast and dramatic” changes that “would impact on the human environment, future living standards and food supplies, and could have major social, economic, and political consequences”. In 1989, Shell had already taken the effects of climate change into account in the construction of an oil rig. But in the same year, the so-called Global Climate Coalition (GCC) was formed by the major oil companies, including Shell’s US operation Shell Oil. It lobbied hard to cast doubt on climate science and oppose government action, and in 1998 Shell withdrew, citing “irreconcilable” differences. However, Shell remained a member of another business lobby group that campaigned against climate action, the American Legislative Exchange Council, until 2015 and remains a member of the Business Roundtable and American Petroleum Institute, which both fought against Barack Obama’s Clean Power Plan. The company has said it has remained a member of groups that hold different views on climate action to “influence” them. But Thomas O’Neill, from the group Influence Map, which tracks lobbying, said: “The trade associations and industry groups are there to say things the company cannot or does not want to say. It’s deliberately that way.” Shell has also lobbied directly to undermine European renewable energy targets, a sector it has invested in although at a much lower level than oil and gas. In 2016, Shell launched its New Energies division, with annual spending less than 1% of the total $30bn Shell pumps into oil and gas. Despite the company’s public support since the 1990s for carbon taxes to drive cuts in emissions, in 2015 it lobbied for exemptions for the electricity it produces and uses, particularly for its offshore oil and gas platforms. Some of Shell’s investments today are also criticised for being incompatible with the 2C warming target agreed by the world’s nations. A 2015 Carbon Tracker report concluded the company was planning to invest more than $75bn in such projects over the following decade, part of a “carbon bubble” in which reserves are being developed that cannot be burned if climate change is to be halted – a concern shared by the Bank of England and World Bank. Another Carbon Tracker report in 2016 cited a 1998 Shell document showing the company was aware of this risk. “Shell knew about, but did not act on, the risks of a carbon bubble,” the report said. “Looking back over the last 20 years, it seems like Shell has gone backwards in terms of transparency, and is still recycling the same old green initiatives, and attempting to deflect responsibility in the face of an existential threat to its business.” Shell was one of the first major oil companies to acknowledge the need to act on climate change and has long argued that providing affordable energy was vital for the world and its development. The 1991 film anticipated the problem: “How could [developing] countries continue to advance but leapfrog the energy-intensive face of development, by which other nations prospered before its adverse consequences came to light?” But in 2015 its own external review committee concluded Shell’s sustainability report did not “adequately convey the urgency of this [low-carbon energy] transition”. Earlier in February, Shell’s CEO Ben van Beurden said: “We believe that climate change is real and we believe that action will be needed.” Moody-Stuart, who was also chairman of Shell from 1998-2002, told the Guardian the broad criticism of the company was unfair. “I don’t think enough has been done, but I wouldn’t single out the oil industry. Governments and others have some responsibility and Shell and others have called for a price on carbon since the 1990s.” “It hasn’t got very far at all but that is not Shell’s fault,” he said. “It is pretty unique for an industry to be actually asking for something which will increase the price of their product, but they are asking for it because that is what is needed to drive the industry in the right direction.” Burke, a former head of Friends of the Earth, agreed there is a wider problem. “It is too easy to blame it all on Shell for getting it wrong”, he said, as there has been “a broader societal failure”. Shell’s 1986 report said the climate change problem was one that “ultimately only governments can tackle”. But it also noted, over three decades ago, that the energy industry “has very strong interests at stake and much expertise to contribute. It also has its own reputation to consider, there being much potential for public anxiety and pressure group activity.”
News Article | March 3, 2017
DALLAS--(BUSINESS WIRE)--For decades, the oil and gas industry had been led almost entirely by a male workforce. The Dallas Petroleum Club approved its first female resident voting member in 1989, which wasn’t too long ago. Since that time, the face of the industry has begun to slowly evolve into a more diverse workforce. With the advent of the U.S. Shale Plays and a retiring workforce looming on the horizon, women’s roles in the industry have become increasingly critical for companies to keep up with the demands of projected industry growth. Research conducted by Peterson Institute for International Economics and EY shows that having more female leaders in business can increase company profits. However, according to a 2016 American Petroleum Institute report, women in the industry are projected to account for only 290,000 of the job opportunities,16% of the total through 2035. Thanks to diversity initiatives, STEM programs and individual mentorship programs, the female talent pool is growing. Women are becoming aware of the career prospects in the industry and their leadership numbers should continue to increase. These top women in their fields in the North Texas Oil & Gas Industry have set an example of leadership, blazing the way for other women to become a successful part of the industry. The following WEN co-founders and members are honorees in the Nancy and Jake L. Hamon Oil and Gas Resource Center Exhibit: Jamie Bryan, Alissa Eason, Diana S. Frazier, Christina Kitchens, Kimberly Lacher, Bradleigh LeBlanc, Jill McMillan, Peggy Tibbetts, Virginia Urban, Debra Villarreal, Giuliana M. Vural, Cathy Willenborg, Tracey K. Henderson and Grace K. Weisberg. The exhibit will run during March in conjunction with Women’s History Month at The Nancy and Jake L. Hamon Oil and Gas Resource Center located on the 5th floor of the Dallas Public Library. Garage parking is behind the Library on the corner of Wood & Akard. The exhibit is sponsored by Petro Harvester and co-sponsored by WEN North Texas. If you are interested in becoming a member of WEN-NT for $100 a year, or renewing your existing membership, please visit www.wennorthtexas.org. The first networking luncheon of 2017 in Fort Worth will be held March 9, 2017 at the Fort Worth Petroleum Club starting at Noon. Networking is a powerful tool for today’s professional women. Networking allows women to enrich their professional lives while learning to live a happier, more balanced life. WEN North Texas looks forward to assisting you in continuing the important conversations that support you in improving your life. Diana Frazier will be presenting "Guard Them or Lose Them - An Introduction to Mineral Management" on March 21, 2017 at the Dallas Petroleum Club starting at Noon. A question-and-answer session will follow this timely presentation. The cost for WEN North Texas members to attend is $35. For prospective members, the price is $50. Please register online at http://www.womensenergynetwork.org. Payment can be made by credit card through the online registration portal or the day of the event by cash or check payable to Women’s Energy Network North Texas. For more information about the above events, contact Jamie Lavergne Bryan, Winstead PC, at email@example.com. For more information about the Women’s Energy Network – North Texas Chapter, visit www.wennorthtexas.org and click on WEN North Texas. Interested parties can join the North Texas Chapter by clicking on Join Today! on the North Texas Chapter’s home page. The Women’s Energy Network is a nonprofit association of women professionals in the energy industry that provides networking and community outreach opportunities and fosters career and leadership development. Founded in 1994, the organization has more than 2,000 members nationwide. For more information, please visit the WEN North Texas Chapter website at www.wennorthtexas.org. Thank you to our generous 2017 WEN North Texas Sponsors:
News Article | March 3, 2017
The Environmental Protection Agency Thursday announced it was withdrawing a request that operators of existing oil and gas wells provide the agency with extensive information about their equipment and its emissions of methane, undermining a last-ditch Obama administration climate change initiative. The EPA announcement was a first step towards reversing an Obama administration effort – which only got underway two days after Donald Trump’s election – to gather information about methane, a short-lived but extremely powerful climate pollutant which is responsible for about a quarter of global warming to date. The agency cited a letter sent by the attorneys general of several conservative and oil-producing states complaining that the information request “furthers the previous administration’s climate agenda and supports … the imposition of burdensome climate rules on existing sites, the cost and expense of which will be enormous.” Scott Pruitt, the EPA administrator, said the agency took those complaints seriously. “Today’s action will reduce burdens on businesses while we take a closer look at the need for additional information from this industry,” he said in a statement. Environmental advocates saw the move as something else entirely. “With this action, Administrator Pruitt is effectively telling oil and gas companies to go ahead and withhold vital pollution data from the American public,” Mark Brownstein, vice president climate and energy at the Environmental Defense Fund, said in an interview. “This was a good faith effort on the part of the agency to collect additional information on oil and gas industry operations and the pollution that comes from them. [Now], it’s a complete lack of transparency.” The EPA announcement further advances efforts by the White House and Republicans in Congress to undo the Obama administration’s efforts to regulate emissions from oil and gas production. Congress, through the Congressional Review Act, is already moving to dismantle an Interior Department regulation, finished very late in the Obama administration, that would have restricted methane emissions from wells drilled on public lands in particular. The EPA did not issue its request for information from companies until November 10, two days after Donald Trump was elected president. “The exercise imposed significant costs on companies to produce additional paperwork and added unnecessary burdens on producers’ technical teams to prepare and submit rushed comments under enormous time constraints,” said Lee Fuller, executive vice president of the Independent Petroleum Association of America, in a statement. But the EPA announcement could result in the United States emitting more greenhouse gases to the atmosphere in coming years. At the very least, it means that the United States will not be tracking those emissions as closely. Not everyone, however, thinks that withdrawing an information request is the same as an intention not to regulate. “The withdraw doesn’t necessarily means that the Trump folks are not planning to regulate methane from existing oil and gas operations,” said Jeffrey Holmstead, a former EPA deputy administrator and a lawyer with Bracewell LLP, which has clients in the energy industry. “They may well come out with a less-burdensome request at some point, but they needed to withdraw the Obama request right away to ensure that the industry wouldn’t be forced to spend a lot of money to produce information that may not be necessary.” The Obama administration’s efforts to tackle methane emissions got going in May last year when the EPA announced new regulations to restrict methane emissions from new or modified oil and gas operations. Simultaneously, the agency sent out an information request to existing facilities — by far a bigger source of methane — asking for them to provide extensive information about their emissions and how they were seeking to control them. This was widely considered as a first step towards an eventual regulation of these facilities, as well. The request for information was a way of “really launching our work to address methane emissions from existing sources,” EPA administrator Gina McCarthy said at the time. But after Trump’s inauguration, the EPA began to give companies more time to supply that information. Many of those companies assumed that the request itself would ultimately be undone. Now, it has. “This step will reduce the significant uncertainties and burdens on the oil and gas industry,” Howard Feldman, senior director for regulatory and scientific affairs at the American Petroleum Institute, said in a statement. “The United States is leading the world in the production and refining of oil and natural gas and in the reduction of carbon emissions, and we look forward to working with the administration on lawful, common sense regulations that create jobs and benefit American consumers.” But Vera Pardee, a senior attorney with the Center for Biological Diversity’s Climate Law Institute, said the “appalling decision” demonstrates how Pruitt is turning the EPA into an oil industry vending machine.” “Just one day after oil-friendly state governments complain about efforts to collect methane pollution data, out pops this cancellation,” she said in a statement. “The Trump administration doesn’t want this data because it doesn’t want to rein in oil companies’ massive emissions of this dangerous greenhouse gas.”
News Article | February 22, 2017
Stories about gas storage rarely make headlines, but the fact is there are hundreds of underground natural gas storage facilities peppered across the country, and when something goes wrong, the impacts can be devastating. For example, in 2015 a leak at the Aliso Canyon storage facility in Southern California ended up displacing thousands from their homes and was considered one of the biggest environmental disasters in modern U.S. history. Historically, state agencies have been responsible for regulating these facilities – resulting in a patchwork of protections. But after Aliso Canyon, the federal government stepped in to provide uniform safety standards applicable across the country. The Pipeline and Hazardous Material Safety Administration recently issued rules are designed to prevent similar disasters from happening elsewhere. The rules are welcome in that they provide a regulatory floor for the more than 400 storage facilities across the country. However, in the current political climate, it’s unclear whether PHMSA will be fully resourced to properly enforce and continuously develop these new safety standards. EDF submitted comments on the new rules, providing ideas for improving the rule and the way it is implemented. In many respects, the states can provide models and material assistance to PHMSA to enhance regulation of this critical piece of our energy infrastructure. Here are four ways PHMSA should look to state expertise to help make gas storage safer. Let state rules apply when they are stronger than federal rules While PHMSA’s rules apply a national regulatory baseline for all gas storage facilities, they may at the same time weaken existing state policies for some facilities. Where state rules are stronger than PHMSA policies, the agency should let those policies set the standard for all the wells in those states, instead of creating a two-tiered system with some wells governed by lower federal standards and others by higher state standards as is currently envisioned. PHMSA’s rules should work as a floor and not a ceiling, and states that wish to go beyond federal standards should be able to do so fully. One of the biggest problems with PHMSA’s gas storage rule is that it essentially copies guidelines originally written by the American Petroleum Institute, guidelines that were never actually meant to serve as regulations. In fact, the language is so vague as to render compliance trivial to achieve in many cases. For example, the policy requires operators to reduce facility risk, but there is no guidance as to how much risk needs to be reduced – so as written, any amount of risk reduction would be sufficient. To help address this ambiguity, the Interstate Oil and Gas Compact Commission (IOGCC) and the Groundwater Protection Council (GWPC) – two prominent oil and gas regulator associations — presented PHMSA with line-by-line comments detailing where provisions were either missing or too vague to be implemented. These groups represent expertise from dozens of state regulatory agencies across the country, and their suggestions could go a long way to bring clarity to national policies, ensuring they are both effective and protective. State policies show what works, what doesn’t The Aliso Canyon gas leak taught us a lot about what does and doesn’t work when it comes to effectively managing our gas storage facilities, and California has since been updating its policies accordingly. One key improvement California regulators are proposing is in the area of risk management and rule variances. There, operators have to submit customized risk management and alternative compliance that regulators must approve prior to their implementation. This helps operators better understand what they are accountable for if something goes wrong. PHMSA’s policies don’t currently follow this model. But they should. Currently, risk management plans and rule variances submitted to PHMSA will only be reviewed after they have already been implemented. This creates a situation where operators can essentially pick and choose what rules to follow, and is problematic for the public because, as we learned from Aliso Canyon, certain operational shortcuts can lead to a disaster. It’s also problematic for the industry because it puts the operators at risk of penalty and lost revenue if the agency rejects those choices. Operators can respond to nearly any regulatory condition except for regulatory uncertainty – which is why California is moving in this direction. By following California’s lead, PHMSA can increase regulatory certainty for operators and public oversight at the same time. In a world of limited resources, states can plug federal holes When it comes to natural gas, PHMSA’s experience has primarily been focused on preventing pipeline leaks and explosions. But storage facilities are a different animal, requiring different expertise. Unfortunately with the federal hiring freeze, the agency is unlikely to get those resources any time soon. Again, states that have been effectively regulating gas storage for decades can offer help. States have engineering and field staff with the precise expertise and the local knowledge that PHMSA lacks, and are among the best resources to which PHMSA has access. Data systems are good example of state resources available to PHMSA. These systems allow regulators to optimize their programs and prioritize risks, and also provide the public with access to critical information. Many states have developed a data system that covers gas storage called the Risk-Based Data Management System (which was jointly developed and is currently used by the majority of oil and gas states). If PHMSA adopts this inexpensive state-developed software, the agency can cost-effectively increase its capacity to properly oversee these policies. Work it out together PHMSA officials have indicated they plan to improve the gas storage regulatory framework over time. The agency has its own homework and legwork to do, but learning from and coordinating with the states will help make the process faster and smoother. These are essential steps toward ensuring a safer, more secure future for our natural gas infrastructure.
News Article | February 28, 2017
The oil giant Shell issued a stark warning of the catastrophic risks of climate change more than a quarter of century ago in a prescient 1991 film that has been rediscovered. However, since then the company has invested heavily in highly polluting oil reserves and helped lobby against climate action, leading to accusations that Shell knew the grave risks of global warming but did not act accordingly. Shell’s 28-minute film, called Climate of Concern, was made for public viewing, particularly in schools and universities. It warned of extreme weather, floods, famines and climate refugees as fossil fuel burning warmed the world. The serious warning was “endorsed by a uniquely broad consensus of scientists in their report to the United Nations at the end of 1990”, the film noted. “If the weather machine were to be wound up to such new levels of energy, no country would remain unaffected,” it says. “Global warming is not yet certain, but many think that to wait for final proof would be irresponsible. Action now is seen as the only safe insurance.” A separate 1986 report, marked “confidential” and also seen by the Guardian, notes the large uncertainties in climate science at the time but nonetheless states: “The changes may be the greatest in recorded history.” The predictions in the 1991 film for temperature and sea level rises and their impacts were remarkably accurate, according to scientists, and Shell was one of the first major oil companies to accept the reality and dangers of climate change. But, despite this early and clear-eyed view of the risks of global warming, Shell invested many billions of dollars in highly polluting tar sand operations and on exploration in the Arctic. It also cited fracking as a “future opportunity” in 2016, despite its own 1998 data showing exploitation of unconventional oil and gas was incompatible with climate goals. The film was obtained by the Correspondent, a Dutch online journalism platform, and shared with the Guardian, and lauds commercial-scale solar and wind power that already existed in 1991. Shell has recently lobbied successfully to undermine European renewable energy targets and is estimated to have spent $22m in 2015 lobbying against climate policies. The company’s investments in low-carbon energy have been minimal compared to its fossil fuel investments. Shell has also been a member of industry lobby groups that have fought climate action, including the so-called Global Climate Coalition until 1998; the far-right American Legislative Exchange Council (Alec) until 2015; and remains a member of the Business Roundtable and the American Petroleum Institute today. Another oil giant, Exxon Mobil, is under investigation by the US Securities and Exchange Commission and state attorney generals for allegedly misleading investors about the risks climate change posed to its business. The company said they are confident they are compliant. In early 2016, a group of congressmen asked the Department of Justice to also “investigate whether Shell’s actions around climate change violated federal law”. “They knew. Shell told the public the truth about climate change in 1991 and they clearly never got round to telling their own board of directors,” said Tom Burke at the green thinktank E3G, who was a member of Shell’s external review committee from 2012-14 and has also advised BP and the mining giant Rio Tinto. “Shell’s behaviour now is risky for the climate but it is also risky for their shareholders. It is very difficult to explain why they are continuing to explore and develop high-cost reserves.” Bill McKibben, a leading US environmentalist, said: “The fact that Shell understood all this in 1991, and that a quarter-century later it was trying to open up the Arctic to oil-drilling, tells you all you’ll ever need to know about the corporate ethic of the fossil fuel industry. Shell made a big difference in the world – a difference for the worse.” Prof Tom Wigley, the climate scientist who was head of the Climate Research Unit at the University of East Anglia when it helped Shell with the 1991 film, said: “It’s one of the best little films that I have seen on climate change ever. One could show this today and almost all would still be relevant.” He said Shell’s actions since 1991 had “absolutely not” been consistent with the film’s warning. A Shell spokeswoman said: “Our position on climate change is well known; recognising the climate challenge and the role energy has in enabling a decent quality of life. Shell continues to call for effective policy to support lower carbon business and consumer choices and opportunities such as government lead carbon pricing/trading schemes. “Today, Shell applies a $40 per tonne of CO2 internal project screening value to project decision-making and has developed leadership positions in natural gas and sugarcane ethanol; the lowest carbon hydrocarbon and biofuel respectively,” she said. Patricia Espinosa, the UN’s climate change chief, said change by the big oil companies was vital to tackling global warming. “They are a big part of the global economy, so if we do not get them on board, we will not be able to achieve this transformation of the economy we need,” she said. The investments the oil majors are making in clean energy are, Espinosa said, “very small, the activities in which they are engaging are still small and do not have the impact that we really need.” Espinosa, who visited Shell’s headquarters in the Hague in December, said: “They are clear that this [climate change] agenda has to do with the future of their company and that business as usual, not doing anything, will lead to crisis and losses in their business.”
News Article | February 28, 2017
This story was originally published by the Guardian and is reproduced here as part of the Climate Desk collaboration. The oil giant Shell issued a stark warning of the catastrophic risks of climate change more than a quarter of century ago in a prescient 1991 film that has been rediscovered. However, since then, the company has invested heavily in highly polluting oil reserves and helped lobby against climate action, leading to accusations that Shell knew the grave risks of global warming, but did not act accordingly. Shell’s 28-minute film, called Climate of Concern, was made for public viewing, particularly in schools and universities. It warned of extreme weather, floods, famines, and climate refugees as fossil fuel burning warmed the world. The serious warning was “endorsed by a uniquely broad consensus of scientists in their report to the United Nations at the end of 1990,” the film noted. “If the weather machine were to be wound up to such new levels of energy, no country would remain unaffected,” it says. “Global warming is not yet certain, but many think that to wait for final proof would be irresponsible. Action now is seen as the only safe insurance.” A separate 1986 report, marked “confidential” and also seen by the Guardian, notes the large uncertainties in climate science at the time but nonetheless states: “The changes may be the greatest in recorded history.” The predictions in the 1991 film for temperature and sea-level rises and their impacts were remarkably accurate, according to scientists, and Shell was one of the first major oil companies to accept the reality and dangers of climate change. But, despite this early and clear-eyed view of the risks of global warming, Shell invested many billions of dollars in highly polluting tar-sands operations and on exploration in the Arctic. It also cited fracking as a “future opportunity” in 2016, despite its own 1998 data showing exploitation of unconventional oil and gas was incompatible with climate goals. The film was obtained by the Correspondent, a Dutch online journalism platform, and shared with the Guardian, and lauds commercial-scale solar and wind power that already existed in 1991. Shell has recently lobbied successfully to undermine European renewable energy targets and is estimated to have spent $22 million in 2015 lobbying against climate policies. The company’s investments in low-carbon energy have been minimal compared to its fossil fuel investments. Shell has also been a member of industry lobby groups that have fought climate action, including the so-called Global Climate Coalition until 1998; the far-right American Legislative Exchange Council (ALEC) until 2015; and remains a member of the Business Roundtable and the American Petroleum Institute today. Another oil giant, ExxonMobil, is under investigation by the U.S. Securities and Exchange Commission and state attorney generals for allegedly misleading investors about the risks climate change posed to its business. The company said it is confident it is compliant. In early 2016, a group of congressmen asked the Department of Justice to also “investigate whether Shell’s actions around climate change violated federal law.” “They knew. Shell told the public the truth about climate change in 1991 and they clearly never got round to telling their own board of directors,” said Tom Burke at the green think tank E3G, who was a member of Shell’s external review committee from 2012–2014 and has also advised BP and the mining giant Rio Tinto. “Shell’s behavior now is risky for the climate but it is also risky for their shareholders. It is very difficult to explain why they are continuing to explore and develop high-cost reserves.” Bill McKibben, a leading U.S. environmentalist, said: “The fact that Shell understood all this in 1991, and that a quarter-century later it was trying to open up the Arctic to oil-drilling, tells you all you’ll ever need to know about the corporate ethic of the fossil fuel industry. Shell made a big difference in the world — a difference for the worse.” Tom Wigley, the climate scientist who was head of the Climate Research Unit at the University of East Anglia when it helped Shell with the 1991 film, said: “It’s one of the best little films that I have seen on climate change ever. One could show this today and almost all would still be relevant.” He said Shell’s actions since 1991 had “absolutely not” been consistent with the film’s warning. A Shell spokesperson said: “Our position on climate change is well known; recognizing the climate challenge and the role energy has in enabling a decent quality of life. Shell continues to call for effective policy to support lower carbon business and consumer choices and opportunities such as government lead carbon pricing/trading schemes. “Today, Shell applies a $40 per tonne of CO2 internal project screening value to project decision-making and has developed leadership positions in natural gas and sugarcane ethanol; the lowest carbon hydrocarbon and biofuel respectively,” she said. Patricia Espinosa, the U.N.’s climate change chief, said change by the big oil companies was vital to tackling global warming. “They are a big part of the global economy, so if we do not get them on board, we will not be able to achieve this transformation of the economy we need,” she said. The investments the oil majors are making in clean energy are, Espinosa said, “very small, the activities in which they are engaging are still small and do not have the impact that we really need.” Espinosa, who visited Shell’s headquarters in the Hague in December, said: “They are clear that this [climate change] agenda has to do with the future of their company and that business as usual, not doing anything, will lead to crisis and losses in their business.”
News Article | February 15, 2017
FILE PHOTO - The logo of Exxon Mobil Corporation is shown on a monitor above the floor of the New York Stock Exchange in New York, New York, U.S. December 30, 2015. REUTERS/Lucas Jackson/File Photo WASHINGTON (Reuters) - U.S. Republicans on Friday repealed a securities disclosure rule aimed at curbing corruption at energy and mining companies and voted to ax emissions limits on drilling operations, part of a push to remove Obama-era regulations on extractive industries. In a 52-47 vote, the Republican-controlled Senate approved a resolution to eradicate a rule requiring companies such as Exxon Mobil and Chevron Corp to publicly state taxes and other fees paid to foreign governments like Russia. The House of Representatives already passed the measure. President Donald Trump is expected to sign it within days. On Thursday, the Senate repealed a rule that would have limited coal companies from dumping waste into streams. After a number of legal battles, the U.S. Securities and Exchange Commission in June 2016 completed the regulation, which supporters said could help expose questionable financial ties U.S. companies may have with foreign governments. Senate Democrats raised concerns that Exxon's chief executive during those legal fights was Rex Tillerson, who was recently confirmed as U.S. secretary of state and has worked extensively in Russia. "It should be lost on no one that in less than 48 hours, the Republican-controlled Senate has confirmed the former head of ExxonMobil to serve as our secretary of state, and repealed a key anti-corruption rule that Exxon Mobil and the American Petroleum Institute have erroneously fought for years," Senator Ben Cardin of Maryland said, referring to the oil industry's trade group. Exxon and other major energy corporations fought for years to block the rule, required by the 2010 Dodd-Frank Wall Street reform law. Cardin, the senior Democrat on the foreign relations committee, wrote the Dodd-Frank section on the payments to foreign governments with Richard Lugar, a former Republican senator. Critics of the rule said it duplicated existing regulations, was too costly and burdensome for companies to implement and that it put U.S. companies at a competitive disadvantage with state-owned companies in other countries that do not have to divulge such information. The change could give American companies an edge over Canadian and European companies that face some of the toughest transparency rules in the world. Republicans have taken advantage of a seldom-used law known as the Congressional Review Act to overturn recently enacted rules with simple majorities in both chambers, denying senators the opportunity to filibuster and stall a vote. Democrats said Republicans were using the review act to help companies not the public. "When it comes to giving public resources to private interests and gutting our nation's health, environmental and financial standards, the Republicans can’t seem to act fast enough," said Representative Raul Grijalva. "Whoever they’re doing this for, it isn't the American public." The Congressional Review Act also bars agencies from revisiting overturned rules, which could pose a legal conundrum for the SEC, which is required by law to enact a payments regulation. The Senate will next consider repealing a rule limiting venting and leaking of the powerful greenhouse gas methane by oil and gas drillers on federal and tribal lands, mostly in the U.S. West. The repeal was passed by the Republican-controlled House on Friday. The Interior Department finalized the methane rule in November. The oil industry has argued that it would add to costs for new and existing wells. Environmentalists have said the rule would protect human health and return more than $800 million in royalties to taxpayers over 10 years.
News Article | February 17, 2017
Work is underway in Congress to repeal the Dodd-Frank Act, as Congress voted earlier this month to dismantle rules requiring oil companies working in foreign countries to disclose payments and other dealings with foreign governments. The rules, part of the broader financial regulations passed after the Great Recession, are aimed at the corruption that can keep a country’s citizens from sharing in the wealth generated by that country’s natural resources. The industry argues the regulations make it harder to compete. But after 30 years in the oil industry and another decade as an advisor to governments and national oil companies in Africa, that’s not what I have seen, either with Dodd-Frank or similar precursors. Oil companies and the developing nations in which they do business have both prospered when they are more open about the enormous sums of money involved in energy exploration and building a producing oilfield. Congress passed the Dodd-Frank Act in 2010, primarily focused on the financial industry and banking practices. Section 1504 required petroleum companies to disclose payments to foreign governments. The intent was to codify and expand voluntary industry efforts undertaken though the Energy Industry Transparency Initiative (EITI) to disclose payments to governments so that citizens and civil society could better understand what has been received by their governments and independently evaluate whether the amounts are in line with contracts and whether the government has spent the amounts wisely and legally. But the U.S. petroleum industry resisted the regulations and even sued to have them suspended. Congress recently voted to overturn implementation. The U.S. petroleum industry, through its trade group, the American Petroleum Institute, has argued that the Section 1504 disclosures were focused on foreign policy, not shareholder protection, and that the data would overload and confuse investors, create an administrative burden, make it harder for U.S. companies to compete and violate confidentiality requirements of agreements in the countries in which they operate.
News Article | February 15, 2017
While US President Donald J. Trump’s executive orders dealing with proposed crude-oil pipelines clearly were favorable, they also will require companies in the oil and gas industry to make new contacts with departments and agencies that were not required previously, an American Petroleum Institute official suggested.