Following the House of Commons Environmental Audit Committee’s report, Protecting the Arctic , Ben Ayliffe of Greenpeace argues that oil exploration in the Arctic is not worth reputational damage. For an alternative view, the International Association of Oil and Gas Producers directed us to their website .
In 1966 the Haitian dictator and head of the infamous gun toting Tonton Macoute, Francois ‘Papa Doc’ Duvalier, sued the author Graham Greene for defamation in a Paris court following Greene’s portrayal of him in his classic novel, The Comedians. The French court ruled that Greene had indeed defamed the reputation of Dr. Duvalier and calculated the worth of the damage to his reputation to be just one Franc.
The court of international public opinion might regard such a sum as overly generous for the reputation of the oil industry. Though it unquestionably provides a significant societal benefit, the industry remains responsible for some of the most appalling environmental, human and economic tragedies we have witnessed.
However, it is equally clear that for almost every oil company around, the brand is everything. Just look at the money they throw at getting their logos on Formula 1 cars or at the opening of the latest critically-acclaimed art exhibition. Brand is central to oil companies, as it provides a social licence for them to operate and do all the frankly pretty nasty things that go hand in hand with oil extraction.
And so in this respect oil companies like Shell, Statoil, Exxon-Mobil and the rest of them should certainly see drilling in the pristine, remote and extreme Arctic as a massive risk. Perhaps even the biggest one they currently face.
The Arctic is one of the most remote and vulnerable environments left on the planet. It is hard to imagine a more challenging operating environment for the industry. The polar north is a biodiversity treasure trove, home to unique species like the narwhal and polar bear and communities that have lived there for millennia. All of this could be wrecked by an Arctic spill.
This is because, remarkably, oil companies still have no way of properly responding to an accident in freezing waters or cleaning up oil spilled in ice.
Old favourites likes mops and buckets tend to feature quite heavily in oil spill response plans for Alaska and Greenland, and I for one would not like to be manning the phones in the Shell press office the day a Deepwater Horizon-style oil spill happened in the far north just as the Arctic winter started to bite.
Delivering the sort of response we saw from BP in the Gulf of Mexico, with tens of thousands of staff, thousands of support vessels and a final bill approaching $40bn (about £26 billion) would simply not be possible in the far north. The technical challenges remain insuperable. A major accident in somewhere like the Russian offshore fields would be immeasurably more difficult to deal with, cost far more and result in an unprecedented ecological catastrophe.
Ignoring, for the moment, the all too obvious flaw in the logic that proposes drilling for more of the fossil fuels that are causing the global climate to over-heat and the Arctic ice to melt at seemingly ever-increasing rates, opening up new wells in the ever more northerly latitudes that oil industry players are clamouring for is perhaps one of the most risky and ill-advised gambles any company could take with their reputation.
From Shell’s repeated and all-too-public failures to drill off Alaska, to Cairn Energy’s wasting of over $1bn (about £650 million) off Greenland, to Gazprom’s almost total inability to start up a decrepit oil platform in the remote Pechora Sea, the environmental, economic and reputational risk of drilling in the Arctic couldn’t be any clearer. One big spill and neither ice nor ocean nor brand is ever likely to look quite so sparklingly pristine again.